Asia has become well-versed in dealing with financial crises over the course of the last 50 years or so, from the oil crash of 1973 to the so-called ‘Asian Contagion’ of 1997.
The latter saw a sequence of currency devaluations and after the Thai government reversed the decisions to peg the local currency to the USD, which also triggered stock market declines and reduced import revenues.
This also sent real GDP growth tumbling to a little over 1% (1.3%)overall, which was considerably lower than during the aforementioned oil crash and the great recession of 2008 (against which Asia was relatively well-insulated).
But where will the fallout from Covid-19 rank against similar crises, and how has business been particularly impacted on the Philippines?
Comparing Crisis and the Wider Impact of Covid-19
The fallout from the Asian Contagion and stock market crash of 1997 was considerable, but the latest forecasts from the International Monetary Fund (IMF) suggests this years’ coronavirus-related decline will be even more damaging to the economy.
More specifically, growth in Asia as a whole is expected to stall at zero percent by the end of 2020, confirming the worst economic performance in nearly 60 years.
This will plunge growth levels well below the overall international average, creating an outlook that’s relatively bleak by both contemporary and historic comparisons.
That said, the forecasted slowdown in some Asian nations is slightly smaller than the expected contractions in the US and Europe, where the economies may ultimately shrink by 6% and 6.6% respectively.
Conversely, China’s growth is projected to decline by 4.9% in the year ending December 2020, tumbling from 6.1% in 2019 to just 1.2%. This is slightly better than some nations in the west, and it provides genuine hope that other nations in Asian can follow the trail blazed by China in terms of achieving better-than-expected economic performance.
Appraising the Impact on the Philippines
The Philippines entered a technical recession during Q2, after recording its worst economic growth since a major downturn in 1981.
According to the recent data released by the Philippine Statistics Authority, the nation’s GDP growth rate declined by a whopping 16.5% during the second quarter of 2020.
Overall, there’s even a risk that the Philippines could enter negative growth territory for 2020 as a whole, with minimal growth of just 3% recorded in Q1 and a further (albeit significantly smaller) contraction forecast for Q3. This contrasts starkly with the annualised performance over the course of the last five years, which has delivered average growth of around 6% during this period.
However, there’s some cause for optimism in the country, particularly after the island of Luzon (which accounts for 70% of the nation’s GDP) reopened for domestic travellers. Sure, this increases the risk of a second coronavirus spike, but it also reopens the national economy and improves the prospect for businesses and households alike.
This is also indicative of a deceptively robust economy, and one that has the potential to rebound quickly from coronavirus in the future.
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The coronavirus pandemic has pushed the global economy into recession. Economists across the world are predicting the worst economic recession in history, as countries struggle to contain the deadly virus. GDPs are plummeting, and unemployment rates are rising worldwide.
Businesses, from large corporations and MNCs to small companies and startups, are forced to make significant operational and structural changes. Many organizations have embraced the work-at-home model, as offices are the top contenders for spreading the virus. People are focused on avoiding activity or place that encourages social interaction.
It brings us to an important question: Can co-working spaces still survive when social distancing is mandatory?
It most certainly can. Even though co-working spaces are currently facing reductions in revenues and memberships, they have an enormous potential to benefit. Economists and experts observe that a recession and the work-at-home situation can open up new opportunities for co-working spaces. Currently, co-working spaces are empty, and many have shut down due to a lack of demand. But this situation is expected to reverse as people thrive in social settings and seek out co-working situations.
In this article, we will discuss the potential benefits co-working spaces can draw from the ongoing pandemic and recession.
Here, take a look at these points:
1. WORK FROM HOME CULTURE
In the wake of the pandemic, administrations and businesses are fighting uncertainty, which has given rise to the work-from-home model. It is an attractive and feasible solution to maintain operations and productivity in the immediate future. Twitter, amongst other corporations, is allowing its employees to work-from-home permanently.
Apple and Facebook have also extended their work-from-home operations until 2021. The demand for co-working spaces in Australia is also increasing as remote workers need a professional environment. Organizations and professionals are increasingly embracing teleworking, and co-working spaces play an instrumental role in this transition towards remote working.
They provide remote workers with an organized and systematized space where they can operate and network within the industry.
2. DE-DENSIFYING OFFICES
De-densification is instrumental in ensuring a smooth transition out of the crisis and towards recovery. Organizations are likely to explore practical solutions to de-densify their offices and operations to future disruptions and safeguard their employees. Major corporations and companies are already taking measures to relocate their employees and operations to co-working spaces.
As the economy moves towards recovery, the trend of de-densification and relocation to co-working spaces also expected to increase. Businesses are likely to position their employees across multiple co-working spaces to reduce their expenses and avoid over-densification. Corporations have realized the benefits and cost reductions of remote working, and this trend is likely to continue in the future.
Remote working and co-working spaces go hand-in-hand because professionals need a supportive and facilitative environment. Many small businesses and startups that forced to shut down can also rely on co-working spaces. They can position their operations temporarily to save money and recover from the recession.
Many professionals are just getting comfortable with remote work. They realize the comforts and flexibility associated with working at home. However, eventually, millions of work-at-home professionals will seek to escape their home environment and work from a different environment. They will be attracted to co-working spaces where they can practice social distancing without being confined to their home environment.
3. LIFELINE FOR SMALL BUSINESSES
Co-working spaces are not only crucial for freelancers and teleworkers. They are an essential lifeline for small businesses, startup entrepreneurs, and self-employed professionals. They serve as a supportive environment that offers structured discipline for coordination and allows greater affordability.
Countless entrepreneurs are unable to rent office spaces and rely on co-working environments to sustain operations and enhance productivity. Co-working spaces can play an instrumental role in coordinating resources and offering community support to small businesses. They can aid small business owners in exploring grants and governmental schemes.
Co-working spaces can also function as a bridge between local business networks and small businesses. They can provide them enhanced access to government schemes, grants, and local organizations dedicated to relief. Co-working spaces ideally positioned to coordinate the relief resources offered by various local funds and organizations.
They can utilize their peripheral connections and positioning to aid freelancers, remote workers, and small businesses.
4. COMMUNITY SUPPORT
Co-working spaces create a community where remote workers and small business owners can cultivate trust, grow, and build relationships. They are dynamic economic engines that fuel the financial stability and market presence of millions of professionals. Co-working spaces create employment opportunities; they allow businesses to save money and raise equity capital.
Once the COVID-19 crisis boils over, federal and local leaders will work towards creating jobs and restoring office spaces. Co-working spaces will play an instrumental role in recovering the corporate community. Community dimension is significant for allowing a smooth recovery, and co-working spaces will aid in restoring the balance.
The recession has hit hardest on small businesses and startups, and co-working spaces will facilitate restoration. They will help entrepreneurs and professionals regain their stability by offering social networks and industry connections.
It is essential to understand that return to normalcy after the lockdown won’t be easy. Many businesses won’t be able to reopen, and countless entrepreneurs will struggle to raise capital and cover losses. Community support and strength will be crucial in rebuilding networks, reconnecting with associates, and restoring the economy.
Co-working spaces are community hubs that offer support and create a facilitative environment. They will be instrumental in rebounding from the coronavirus pandemic and transitioning towards normalcy.
CONCLUSION
Presently, all businesses are navigating through uncertain times with depleted revenues and increasing losses. The global industry has embraced numerous adjustments and extensive restructuring to cope with the crisis. Co-working spaces are a vital ingredient in this restructuring as they will facilitate local economies and act as community hubs.
Co-working spaces are local economic engines that support remote professionals and entrepreneurs, and their significance is likely to increase. They will play an instrumental role in recovery and rebound, as businesses work towards restoration and growth.
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By 2050, the world population is estimated to grow from 7.6 billion to 9.6 billion. This growing population will boost consumer demand across all industries. From construction, to food & beverage, to life sciences, oil & gas, and many more industries. This growing demand means that we expect to see investments into production and manufacturing facilities, creation of many new jobs and a positive impact to the economy. Ultimately this positive impact will lead to hiring of many new front-line workers to support these operations.
These new opportunities create new sets of challenges in the COVID-19 Era. In this blog, I will highlight four challenges that business operations will face to keep their operations running.
Digital Natives – The New “Front-Line” Worker – While the above growth in population is the good news, the bad news is that many of these new front-line workers are born digital natives. They expect everything digital in their life and we expect to see a talent war with these new front-line workers having a choice in where they choose to work. The new front-line workers will be expected to perform highly complex jobs and processes with minimal human interactions in the COVID-19 Era. Big, fat binders, walkie-talkies and pages of work instructions will no longer even be an option. Availability of experts to hand-hold these front-line workers is also rapidly diminishing and with COVID-19, it even makes things harder to keep machines running and spare parts available at the right time and at the right place.
Disappearance of Tribal Knowledge – The tribal knowledge that exists with your expert front-line workers is expected to disappear in relatively short time. The average age of front-line workers is at 44.1 years and it’s estimated that these workers will soon start to leave the workplace, creating a huge skills gap and tribal knowledge disappearance. This aging workforce, coupled with a tight labor market, has resulted in critical skills and talent gaps impacting the ability of asset-intensive industries to recruit, train and retain a workforce with suitable competencies. The Manufacturing Institute estimates that because of the skills gap 2.4 million job openings in manufacturing will likely go unfilled through 2028, representing half of all open positions.
Shrinking Profit Margins – The growing pressure on profit margins and talent challenges is felt across all asset-intensive industries, such as CPG, Life Sciences, Oil & Gas, Utilities, Mining & Metals, Chemicals, and Industrial Manufacturing. This pressure doesn’t just stem from the rising cost of people; these industries are facing increasing demand from customers to deliver higher value for a lower cost.
Worker Safety – During the COVID-19 crisis, we have seen many business operations grind to a complete standstill, impacting production and revenue streams. New safety procedures, risk assessments and contact tracking will become an integral part of running an operation without interruption. Practicing “Social Distancing” requires context of worker health and their location within a plant or a site. The old ways of working and implementing standard operating procedures on paper will not work in the COVID-19 Era.
Recently Forbes wrote an article asking, “Is now the moment for the connected worker platform?” It’s very critical for companies to start thinking about a “Connected Worker” strategy in the COVID-19 era. Companies need to start thinking of how digital transformation can help them combat these macro trends and challenges. Simply delivering a mobile app for your front-line worker is not the right solution.
You need to be thinking of a connected worker strategy that puts your front-line worker at the center of all your disparate systems and they are converted into a “Connected Worker.” The definition of a “Connected Worker” is to converge different technology trends such as Cloud, mobile, web, chat, social, wearables, AI/ML, and more to change the entire working life of your front-line worker. As a simple example, it’s important that you not only think of enabling your front-line workers with important ERP operational data, but also empower them with step-by-step guided work instructions that help them get the job done faster, better, cheaper and safer.
You also need to be thinking about the growing population from 7.6B to 9.6B and the consumer demand. If you are not already thinking about bridging the skills gap between a new front-line worker and an experienced front-line worker, you may soon end up in an operational crisis that may impact your production and revenue streams.
Best-in-class Connected Worker Platforms will offer you the technology for experts to guide new front-line workers remotely. We expect to see a trend where more and more expert workers will be used to help four to five new front-line workers from the comfort of their homes. Remote guided assistance and over the shoulder coaching with smart glasses and a two-way video conferencing experience will not just be a “cool technology,” but will be a necessity in the next two to five years.
Connected Worker Platforms appeal to younger front-line workers, who are “digital natives” and comfortable with mobile technology. Such platforms also help industrial plants successfully solve shrinking profit margin challenges, skills gaps, tribal knowledge loss and worker safety issues. For these reasons, a Connected Worker Platform will soon be a necessity for manufacturing and industrial facilities.
About the Author
Sundeep Ravande is the CEO of Innovapptive Inc. and believes in a better way of running plant based operations. In most enterprises, operations are a set of tedious linear steps – slow, inaccurate and highly inefficient. Sundeep believes in a world where field work can be done faster, cheaper and safer. He envisions Innovapptive to be at the center of all plant-based conversations between humans, machines and workflows. By digitally and autonomously connecting humans, machines, and workflows in the 21st Century Economy, Sundeep aims to create a “Connected Workforce” experience for 11 million field workers across the globe. Prior to co-founding Innovapptive Inc, Sundeep worked with several Big 5 consulting firms, such as IBM & Accenture, serving several Fortune 500 clients such as Verizon, Shell, Mead Johnson Nutrition, Coca-Cola and FMC Corporation to help them re-invent and re-imagine their business operations with digital technologies.
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The COVID-19 novel coronavirus has changed life as we once knew it for virtually everyone across the planet. Billions of people globally have had their lives turned upside-down, with COVID-19 failing to spare individuals from any background, location, or class in society.
Businesses have also been hard-hit by COVID-19, with small independent and large multinational firms alike having to close their doors for good. But, some firms have escaped relatively unscathed from the devastation brought by this global pandemic.
If you’re looking to embrace the entrepreneurial spirit from within you, it’s likely you want to start a business that is most likely to survive such global pandemics like COVID-19. With that in mind, here are five examples of startup business sectors you need to consider:
1. Vehicle Maintenance
When countries impose strong lockdown curfews on their citizens, only businesses deemed “essential” are allowed to operate as normal. Vehicle maintenance garages are one such example and have seen no decline in trade despite the current COVID-19 pandemic.
Vehicles used by key workers and emergency services still need to function as intended. Those repair workshops are crucial at keeping a nation’s network of supplies and essential services working as it should.
2. IT Services
Technology is another necessity in today’s modern world. It has proven a welcome boon when coordinating COVID-19 care and support for communities across the globe. And it’s still going to be around long after the coronavirus pandemic becomes a distant memory.
IT consulting and support services companies offer a variety of solutions for residential and corporate users alike. They are one of the few sectors virtually unaffected by COVID-19. IT services encompass sectors ranging from cloud computing through to content streaming.
3. Delivery Services
Logistics play a vital role in the functioning and development of any nation’s infrastructure. Without delivery services in place, businesses wouldn’t have the resources they need to provide their products and services.
During the peak of COVID-19 in many countries, particular attention got focused on delivery services. Especially ones that could transport much-needed items such as medicine to healthcare centers, and groceries to individuals self-isolating due to COVID-19 symptoms.
4. Insurance
It might surprise you to learn that the insurance industry as a whole is least affected by the COVID-19 pandemic. Despite the economic chaos that the coronavirus has brought most nations, it’s still “business as usual” for insurers.
For a start, workers at insurance companies can mostly continue providing services remotely from home. That’s thanks, in part, to the digitization of insurance products. Another reason is due to the continued requirement for consumer and corporate protection against risks.
5. Pharmaceuticals
One sector to consider that is both unaffected by COVID-19 and economic recessions is the pharmaceutical industry. Irrespective of what’s going on in the world, people (and animals) still need medicine to treat illnesses and diseases.
When talking about the pharmaceutical industry, there’s not just the production of medicine. Related sectors such as research and development are also largely unaffected by the COVID-19 crisis.
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Handling change is always difficult. It can be tough to adjust to starting a brand new and complex job or needing to shift your business. COVID-19 has resulted in significant changes in all aspects of life. If you want to be able to get through major changes well, then there are various soft skills that can help though.
1. Flexibility
You should never be the kind of person who is “rigid.” You should strive to be as open as possible to things that seem foreign to you. Remember that familiarity isn’t always optimal especially when trying to learn and change.
2. Communication
The people who deal well with change tend to be the ones who have great communication skills. Succinct communication can go a long way, it’s productive and will help you in a time poor business environment where things need to get done quick! People gravitate to others who make things as transparent and hassle-free as possible.
3. Teamwork
Teamwork and solid communication skills basically go hand in hand. It’s in your best interests to team up with others who are around you well. Don’t ever forget that power exists in numbers. If you’re able to work well with others, you may be able to get through trying situations with ease, confidence and ample support.
4. An Upbeat Personality
It’s essential to have an upbeat attitude. It’s essential to be able to look at the bright side of life. It’s only natural that human beings are drawn to people who know how to keep things cheerful. A cheerful attitude is conducive to productivity that can pave the way for substantial and meaningful upgrades.
5. Being Able to Take on Problems Well
There’s no avoiding occasional problems. Occasional problems are natural. Your aim should actually be to figure out how to get through them like a bona fide champion. Learning how to think analytically and logically can take you far. If you’re able to remain composed, then you should be able to come up with solutions that can help all of your most pressing dilemmas become distant and irrelevant.
6. Leadership
The world could benefit from having leaders who are capable and confident. If you’re serious about the concept of being able to get through change in a healthy and productive way, then you should strive to hone your leadership abilities. It can be beneficial to know how to guide others.
7. Accountability
People who have the ability to get through change well are the ones who steer clear of being in denial. They are accountable. That’s because it can foster growth and personal enrichment. If you’re interested in being able to handle change in a healthy and beneficial manner, then you must admit when change needs to occur and there are issues. If you’re okay with change and all of the things that it may entail, then it can help you figure out how to take charge of it fully. Taking charge of change and all of its possibilities can give you a feeling of liberation and self-esteem.
Although there is a great deal of uncertainty especially in the current environment there are a range of soft skills we can improve and utilize. Be aware of the above soft skills in your workplace or personal life and try implementing the above advice.
About the Author
Simon Choi has a background in change management in consulting (including EY and KPMG) and financial services from Australia. In 2017, he started his own small business distributing lensball photography accessories.
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Asia has become well-versed in dealing with financial crises over the course of the last 50 years or so, from the oil crash of 1973 to the so-called ‘Asian Contagion’ of 1997.
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