From the standpoint of productivity, spacing, barriers and PPE will reduce the amount of production per any measure you care to use, square foot, employee, input, day/week, or any other denominator. Not only are there physical limitations to producing as much as before, the negative effects on employee morale and stamina, particularly from PPE use, are bound to affect their productive capacity. Over time, new methods and innovations will improve productivity in the new environment, but only after much trial and error. With lower productivity, pricing models will change, barriers to entry will increase, investment in expansion will be eyed more critically, economies of scale will be affected and various other economic drivers will shift in importance and pattern. Disruptions to the supply chain are already calling into question the assumptions behind limited inventory and “just-in-time” purchasing. While the efficiency benefits of such models preclude complete abandonment of the concepts, diversification of suppliers and increases in par stocking are likely, neither of which aid efficiency but both of which add robustness. In some industries, the new constraints could generate increased consolidation as capital and market access become even more important. However, the drive for more diversified and local production and the spreading of expertise and ingenuity that occurs when large layoffs and closures take place could easily lead to a new blossoming of smaller, more geographically diverse and more narrowly focused business ventures. From a customer standpoint, behaviors are being affected in a variety of ways, all of which point toward potential reductions in demand even when businesses are reopened. Concerns over personal health, even amongst those who are vocal about “getting back to normal,” will inevitably reduce the number of times customers engage in commerce outside of their homes and the manner in which they do it. While online ordering can make up a large portion of the lost in-person sales, it is unlikely to replace it completely and will only reach its full replacement value over time. Aside from health concerns, the quality of the customer experience will be permanently affected in the same way that the work environment for the employee will change. Personal service will change and generally be diminished. Travel convenience is likely to take a permanent hit. Leisure industry capacities will be reduced, affecting access, wait times and pricing. Changes already underway in the retail environment will be accelerated and shifted in different directions than pre-pandemic patterns would have suggested. Beyond customer experience and practical impacts, personal behavior is also going to be affected by the lingering psychological impacts of the twin health and economic crises. Increases in savings rates, insurance demand, and healthcare spending are likely. Retirement planning and particularly congregate care for the elderly are likely to experience profound long-term impacts. Questions of urban density, public transportation, large corporate employment and work-life balance will be reevaluated. At both the personal and professional level, the balance between online and in-person interaction can be expected to remain shifted even after it is no longer required. The cost- benefit of education and the most cost-effective means of accessing it will also be reevaluated.
∴ PROGNOSIS
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