Any major event with substantial economic impact and unprecedented shifts in market expectations naturally accelerates change—but a “major event” may be an understatement when history looks back on the global COVID-19 pandemic that has gripped the U.S. and the world since early 2020. Not only is the pandemic causing serious health issues and dramatic loss of life, but its economic impact has been devastating for so many.
However, despite lockdowns, business closures, job losses, supply shortages and other events that directly impacted companies of every shape and size, there also came opportunities that are almost certain to remain a lasting part of the way things operate as we start to recover from the pandemic. Remote interaction (RI), artificial intelligence (AI), big data, a dramatic increase in e-commerce, a rise in entrepreneurial intensity, the re-analyzation of workplace culture—and even drones delivering to the front door—are just some of the things that are likely to be permanent in the new normal.
To get a greater picture of what to really expect, we asked the experts—members of the faculty from each of the nine undergraduate business majors at the Whitman School— to share their insights into the future of the post-pandemic business landscape.
Online banking, electronic/mobile payment systems, robo-advisors, algorithmic trading, fintech and cybersecurity are just a few aspects of daily business that are here to stay, according to Professor of Finance Practice Tom Barkley, director of the M.S. in finance program. Some of these ways of doing business existed before the pandemic, but all of them have now become cemented into the realities of consumers’ daily lives and necessities in the business world.
This won’t be limited to consumer goods, like clothing or groceries. Banks, insurance companies, pension funds and investment managers will continue to rely more heavily on innovative financial instruments that became essential during the pandemic in order to meet the needs of customers. In the post-COVID-19 environment, the influence of big data and AI will be felt full force from governments and multinational corporations to Main Street, as technology helps almost every kind of business sector identify what clients and customers want and need.
Barkley notes several areas of change to be expected post-pandemic. Working remotely, while a necessity during the pandemic, is likely to continue, whether full time or in hybrid form. Companies have found that less travel and no commuting has increased employee productivity for the most part, which, in turn have positively impacted the bottom line.
Retail operations that survive the pandemic are expected to look different in the years ahead. There are likely to be fewer brick-and-mortar operations, which could result in shrinking company margins that could mean lower prices for consumers. Barkley uses banks as an example of brick-and-mortar operations that closed many branches during the pandemic and may encourage customers to do most of their transactions online in the future.
As big data and AI programs continue to offer manufacturers, wholesalers, retailers and other members of product supply chains ways to better identify the desires and needs of consumers, there will be a greater reliance on protecting all of this data. Government and businesses will need more robust firewalls to prevent unauthorized access to databases, confidential files and other strategic information. This should spur growth in new firms that provide various forms of cybersecurity services, as well as companies that offer cloud computing, database management services and biometric data analysis.
With so many people and services relying on the internet, social media and telecommunications, there will also be the need for greater bandwidth and improvements in the infrastructure that provides it. This will require government partnerships with the private sector to provide adequate services.
And, finally, “It’s not unthinkable that the near future might bring about a society where notes and coins disappear,” says Barkley, remarking that increased payments for goods and services have reduced the need for physical cash. “Cryptocurrencies might become the next major store of value, ready to use anywhere in the world.”
ADVISORY BOARD INSIGHT:
Kenneth Pontarelli Says There’s No Substitute for Personal Interaction
Kenneth Pontarelli ’92 (WHIT/A&S), a member of the Whitman Advisory Council, is a partner and managing director of Goldman Sachs Group Inc. He acknowledges that, despite the hardships of the pandemic, there have been some benefits, and he marvels at his team’s ability to raise investment vehicles with no face-to-face meetings with investors.
“This would have been unthinkable in the past,” he says. “This period [of working remotely] allowed us to reflect on what really needs to be done in person and eliminate unneeded waste.”
Pontarelli acknowledges, however, that there is no substitute for personal interaction, not only with clients but also with up-and-coming professionals. “The finance sector is one deeply steeped in apprenticeship. When young professionals are learning the industry, they need real-time access for training, as well as answers to their questions,” he explains. “This builds camaraderie and inculcates people into the culture of the firm. That is the glue and differentiation of an organization. On the client side, the first-hand connections are what build trust and a bond that creates long-term alignment.”
Pontarelli hopes that a post-COVID-19 business environment “harnesses the efficiency gains that we have garnered to double-down on time spent deepening relationships within our firms and client base.”
While the history books are not quite yet closed on the pandemic, there are many glimmers of hope and the certainty of change on the horizon. Those who intend to succeed in a post-COVID-19 business landscape will need to plan, adapt, accept and learn from both the painful and the productive lessons they’ve witnessed—all while being open to innovation, entrepreneurial intensity, data-driven decisions and the resiliency needed to continue to thrive.