How to fix the post-COVID economy

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Introduction

The COVID-19 pandemic has significantly wounded the global economy and inflicted serious economic consequences with grave impacts on societies and individuals. The International Monetary Fund (IMF) estimates that the global median GDP was the worst since the Great Depression as it reduced by 3.9% in the period 2019 to 2020 (IMF, 2020). The mitigation measures that were put in place to avert the spread of the virus led to significant reductions in income levels, increase in the rates of unemployment, and disruption in the normal working of economically critical industries such as transport and manufacturing. According to Bakar & Rosbi (2020), the pandemic has had significant negative impact on the industries that depended on the movement of people and little or no impact on those that depend on the movement of information. Although the global economy was estimated to grow following the reopening of countries and the availability of vaccines, some industries, such as hospitality and tourism that were severely ravaged by the pandemic require appropriately redesigned improvement efforts fit for post pandemic business environment to fix them.

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Improved Workforce Skills

Employees should be adequately equipped with proper educational knowledge and skills essential for improved performance in the increasingly dynamic post-COVID work environments. According to Pestonjee & Pastakia (2022), post pandemic workplace is highly dynamic and requires evolved skills that can withstand the prevailing changes, especially the revival of the most affected industries. For instance, in the US, members of the workforce that lack a college degree and have reduced training levels on the job have experienced stagnation in their earnings and occasionally interrupted their life earnings by leaving their jobs prematurely (Baily, 2020). Such challenges would be highly detrimental in revamping industries that have been adversely affected by COVID-19. Consequently, to improve the labor market after the pandemic and restoring as well as making the heavily affected companies more profitable, increased investment in better skills training program is paramount. Although the benefits of this strategy can only be experienced in long-term, creating more skilled workforce, if implemented, will be essential in fixing the most destroyed companies through enhancing stronger productivity and ensuring a highly inclusive growth. The training programs are supposed to be appropriately developed to curb challenges that have undermined such endeavors in the past. For instance, such previous programs in the US in the past were designed and run in collaboration with unions and employers, meaning that they could be skewed in favor of the employers to the detriment of employees, losing the fairness aspect (Baily, 2020). In some cases, some parents opposed the training programs due to the fear that they drive their children to second class careers. Regardless, properly designed training programs have worked well, especially for those that are designed to provide training through the community colleges since they are closely linked with the needs on the local employers (Baily, 2020). Therefore, the most destroyed companies can benefit from training through improved skills, aligning the skills to the local labor conditions, and getting access to trained workers at a fairly low cost.

Improved Access to Adequate Funding

The most destroyed companies are suffering from inadequate funding and reduced access to capital. This is such a detrimental challenge to companies that are in the brink of collapse since more resources/funding are fundamental in the restoration and improved productivity of these industries. For instance, hospitality and tourism industries were adversely affected by COVID-19 to the extent where some countries experienced complete shut-down in activity and bookings (Crawford, 2020). Funding and capital resources should be generated through engagement and communication with investors or other interested parties with the potential to infuse capital as well as the intervention of government. The improved resources can help the adversely affected industries to curb the effects of the global disruption to business and supply chains through validating the business plans to include the response to crisis and preservation of business, formulate a customer-based response, and conduct all-round supply chain risks assessments. Furthermore, it would be essential to channel funds for the actualization of disruption-driven change involving undertaking enterprise transformation strategy, implementing intelligent space solutions, and automating enterprise services.

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Deregulation

Countries should focus on deregulation to promote the growth of most affected industries. According to Fox & Signe (2021), the entrance and growth of large firms enhances the resilient economic transformation of a country and are adaptable to the economic changes. In essence, policy makers are supposed to prioritize on the policies that promote the thriving of such firms through domestic deregulation and motivating foreign direct investment (FDI). Notably, regulation can negatively affect innovation, creation of jobs, firm resilience and productivity since a firm is not able to adapt to the world economy that is constantly changing. Therefore, deregulation has the potential to enhance investment through assisting the most affected industries to receive equal and impartial treatment from the government that is necessary for growth and creating more jobs.

Conclusion

COVID-19 inflicted severe economic and financial costs on regional and global economies. Mitigating and containing the virus from spread in multiple locations has been extremely difficult due to the high transportation connectivity, economic connectedness, and globalization. The most destroyed industries are the ones that rely on the movement of people such as hospitality and tourism and construction. Reviving such industries and making them highly productive in the highly dynamic post-COVID business environment requires the application of various improvement strategies designed to cater for the prevailing needs. They include improved workforce skills, improved access to adequate funding, and the deregulation to promote the growth of the most affected industries. Consequently, proactive international actions are necessary to save lives and sustain economic prosperity since disease outbreaks are likely to keep recurring.

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  1. Baily, M.N. (2020). How to boost long-run growth after COVID-19.  Brookings. Retrieved 24
  2. July 2022, from https://www.brookings.edu/research/how-to-boost-long-run-growth-after-covid-19/
  3. Bakar, N. A., & Rosbi, S. (2020). Effect of Coronavirus disease (COVID-19) to tourism
  4. industry. International Journal of Advanced Engineering Research and Science (ijaers), 7, 189-193.
  5. Crawford, S. (2020). How can your industry respond at the speed of COVID-19’s impact?
  6. Retrieved 28 July 2022, from https://www.ey.com/en_gl/covid-19/how-can-your-industry-respond-at-the-speed-of-covid-19s-impact
  7. Fox, L., & Signe, L. (2021). Key strategies to accelerate Africa’s post-COVID recovery.
  8. Retrieved 25 July, 2022 from https://www.brookings.edu/blog/africa-in-focus/2021/10/26/key-strategies-to-accelerate-africas-post-covid-recovery/
  9. International Monetary Fund (IMF), (2020). Annual report 2020: A crisis like no other.
  10. Retrieved 28 July 2022, from https://www.imf.org/external/pubs/ft/ar/2020/eng/spotlight/covid-19/
  11. Pestonjee, D. M., & Pastakia, T. A. (2022). The Post-Pandemic Workplace: Challenges and
    1. Prospects. In K. Dhiman, Satinder (Eds), Leadership after COVID-19: Working Together Toward a Sustainable Future, (361-375). Cham: Springer International Publishing.
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