MIKE WALDEN COLUMN: Could the post-pandemic economy be better?
It has become common to hear economists and others say the post-pandemic economy will be different from the economy prior to the pandemic. We’ve gone through a major recession, and usually economies change after recessions. But we’ve also endured a health catastrophe, unlike any in a century, and permanent changes are likely to result.
So, we shouldn’t be surprised a new economy is emerging. Perhaps the more important question is if the new post-pandemic economy will be better than the one it replaced.
Here I will examine five major components of the new economy that I and many others see coming. I’ll let you decide if they will lead to a better North Carolina.
The first is remote working. It was a minor, yet growing, part of our economy before COVID-19, but the lockdowns in 2020 caused it to explode. At the height of the pandemic, over 40 percent of workers were using cyber connections to their jobs.
As lockdowns ended, remote working has declined. Surveys show employees and employers are each divided on their preferences for remote work. Some like it, while others don’t. Still, there are enough who benefit from remote work that experts forecast between 20 percent and 30 percent of employees will spend at least some days each week working from home. This will be between two and three times higher than before the pandemic.
The second component is high-speed internet (HSI). HSI is necessary for most remote working as well as other remote activities discussed below. The country has been talking about making HSI universally available everywhere, and there’s a good chance this now will occur. The big question is whether public or private money will be used. Public funds from federal and state sources could be tapped for the $150 billion needed for universal national HSI availability. Of course, these funds would need to come either from taxes or borrowing.
But there’s a good chance the private sector could be the source for HSI. Several rich entrepreneurs, including Elon Musk and Jeff Bezos, are developing a new satellite system for providing universal HSI. I expect either of the two methods – public or private – to get us to universal HSI by the end of the decade.
The remote delivery of services is the third component of the post-pandemic economy that will become more common. Remote education and remote medicine – commonly known as tele-medicine – saw their usage expand during the pandemic. Each has had their fans as well as their detractors. Remote education at the college and university levels has been deployed for some time, so both faculty and students have had experience using it. But remote education at the K-12 level during the pandemic was new, and many teachers, students and parents had issues adjusting to the change. There was a similar response to using cyber-visits with doctors in place of face-to-face meetings.
Tech experts think accessing services like education and health care through your computer will significantly improve and expand in the future. In education, programs termed “computer assisted learning” could provide customized learning to students, thus allowing each pupil to advance at his or her pace. Tele-medicine will use regular medical information sent electronically to physicians to allow them to track and evaluate your medical condition. Personal visits will only be needed when the data indicate a situation requiring personal attention. Since travel and use of school and medical buildings will be reduced, remote delivery of these services should reduce their costs.
Cyber ordering of products and delivery of those products to consumers took a big, big jump during the pandemic. While, again, there will likely be some initial pullback as the economy returns to normal, this way of buying and receiving products is likely on a long-run growth path. In the future, look for some deliveries to be made by drones. Also, expect regular purchases, such as weekly groceries, to be automatically selected and delivered to your home – and maybe even be put on your shelves by a robot!
What ties each of these trends together is their effect on reducing the importance of location. If you can remotely work, have your children remotely educated, receive medical care remotely, cyber-shop, and then have products delivered to your doorstep, then you can live almost anywhere. Importantly, you don’t have to live in big metropolitan areas where real estate is expensive and congested driving takes much of your time. Instead, you can consider living in small towns and rural areas, where housing is more affordable and the pace of life is slower. Hence, the fifth trend we may see in the post-pandemic economy is a revival of remote living.
Everyone won’t view these five trends in the same way. Some will immediately jump on board, while others will take a pass. But the trends will offer new opportunities and options for those who want to try. Therefore, if these trends happen, will they mean an improvement in our economy? Will the post-pandemic economy be better? You decide.
Dr. Mike Walden is a William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University.