The Changed and Changing Economy

A need for flexibility, now and in the future.

EMBRACING CHANGE: Tom Smythe says the pandemic requires businesses and employees to adapt to a new economic reality.

 

The pandemic of 2020 is arguably the most significant event in modern times. It is leading to radical change in so many areas of our lives: health, social, cultural, political, economic and more. When we look back, we may have fundamentally altered how we develop new drugs and address health crises. Will we ever shake hands or hug again as a greeting? Will museums, cinemas and theaters ever return to the forefront of our cultural lives? Have we entered a new era of closed national borders, and will supply chains be as diverse and offices be as commonplace in the future? No single event of the last 150 years is likely to compare in total with the change that the pandemic has brought.

From an economic perspective, let’s be abundantly clear: The pandemic has brought economic turmoil that is as bad as, if not worse than, the Great Depression. But while the magnitude of the current economic situation is equal to or greater than the Depression, we also have many more tools at our disposal to fight against this upheaval. We now have central banks that understand the significance of well-functioning markets. Unlike the Depression, our banking system is in a much better position to handle the current crisis, in part because of what we experienced in 2008. And, with the development of technology over the last 25 years, we could still subsist without ever stepping foot in a retail store again – tragic as that would be.

As we begin to cope with and hopefully eliminate the health effects of COVID-19, we also need to embrace the transition that the economy is currently experiencing and will continue to experience in the near future. We will not return to the “business as usual” that we knew before March 2020. Many of the changes that have come as a result of the pandemic are here to stay. As humans, we generally resist change—it is messy. What the pandemic has required us to do to survive is to embrace change, and if you don’t, you will be left behind.

The need to embrace change is particularly important for two groups in our economy. The first is small business. In larger companies, there are executives who specifically help promote and lead change within organizations, although the people in those roles likely never imagined the magnitude of change they would currently be managing. With small businesses, owners and entrepreneurs are generally so focused on what’s in front of them that they haven’t had the bandwidth to respond to change, much less embrace it and develop ways to incorporate it into their businesses. Going forward, small businesses will be required not only to respond to change, but to anticipate it. It will be imperative to “seek” change to compete and survive. That means owners must encourage idea generation from employees, at all levels, and be willing to fail and learn from it.

The second group that must embrace change are the 99% of us who are not small-business owners. We work for someone in a job. The nature of every job in the world is going to change. There will likely be much more focus on technology. My job is no different; I have gone from never having taught in an online environment to being mostly virtual. To make that switch has required the willingness to learn new things and to challenge my old ways of doing things.

We also will likely see companies want employees who are able to do multiple jobs, whether that be in a new set of job responsibilities or as “backup” for the next “event.” Of course, there are also jobs that are gone forever. People in those types of jobs, or if they think their job could become one of the “victims” of the future, actively need to seek ways to upgrade their skills through formal and informal means. For example, Florida Gulf Coast University is close to launching professional credentialing that is very targeted, skill-based education modules for community members to remain relevant in current jobs or prepare for a future change. Other programs, ranging from job shadowing to formal degree and certificate programs, should be sought out on a regular basis.

The pandemic has led to tremendous change. Equally important, it has sped up the process of change. As for small-business owners and employees, we must embrace and anticipate change. If we don’t, the changes will leave us behind.

Tom Smythe, Ph.D., is a professor of finance in the Lutgert College of Business at Florida Gulf Coast University.

Photo courtesy Florida Gulf Coast University