Relaciones Internacionales – Comunicación Internacional

The end of life as we know it? Get real (By Steven Pearlstein, W Post)

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May 28, 2020 at 12:00 p.m. GMT+2

Hardly a day goes by that some otherwise sober and well-grounded observer offers a sweeping prediction that the coronavirus will change just about everything.

The first casualty is said to be globalization, and the anticipated unwinding of global supply chains, the dismantling of the global trading regime and the dramatically reduced flow of goods, people and capital across borders.

Because of our newfound fear of dangerous microbes, we are meant to believe that people will now think twice about boarding an airplane, checking into a hotel, attending a concert or taking their kids to Disney World.

And having discovered that they can work just as well from home, the betting is that white-collar workers will no longer be willing to make those daily commutes to downtown office buildings, forever changing the nature of work and triggering a mass exodus from New York, Seattle, San Francisco and other expensive and densely populated cities.

The sudden shift to online shopping will bring on the demise of the department store while wiping out the majority of independent retailers and restaurants.

Meanwhile, hundreds of colleges and universities will be forced to close their doors, while those that survive will finally embrace the pedagogical and economic logic of teaching most of their courses online.

More ominously, inequality of income and wealth will accelerate, racial disparities will widen and government at all levels will be constrained by crippling levels of debt. In a particularly breathless bit of front-page hysteria, the New York Times warned that those now graduating from high school and college will be consigned to a lifetime of economic disappointment.

There is, of course, a germ of truth and a measure of logic behind many of these prognostications, alongside the rampant myopia and overreach. But if history is any guide, once a vaccine has been found and the economic storm has passed, life will return pretty much to the way it was before.

People will once again flock to bars and restaurants, cram into rock concerts, board airplanes and cruise ships, and browse the latest fashions in stylish boutiques.

If anything, students will have developed an even greater appreciation of the pleasures of campus life and the value of face-to-face interactions with teachers and classmates.

Most white-collar workers will resume working and collaborating in downtown offices, doing business over lunch at downtown restaurants, and attending conferences and conventions in crowded, energized and innovative cities.

And rather than abandoning global supply chains, companies will find ways to make them more robust by maintaining deeper inventory and arranging for greater diversity of suppliers.

That said, the pandemic will certainly accelerate some structural changes in the economy that were already underway.

The department store, for example, has long been on a glide path to extinction. Having over-consolidated and over-expanded during the 1990s, the only way big chains could make their sales targets was to constantly mark down their merchandise, eroding profits and forcing cutbacks in customer service and store modernization, which wore down their market share even further. Falling share prices invited takeovers by hedge funds and private equity firms, which were ruthless in cutting costs, closing stores and taking on debt to pay themselves dividends, but even more clueless about delivering value and excitement to customers. The pandemic has finally exposed the bankruptcy of their business model.

The demise of the department store, in turn, will probably prove to be the final nail in the coffin of the shopping malls that were developed around them. The mall’s demise will hasten the shift not only to online sellers, but to those independent local retailers and regional chains that offer unique merchandise, creative formats and knowledgeable salespeople operating from storefronts located in town centers and walkable urban commercial districts. The most successful retail developers will be those who create the right combinations of distinctive retail offerings and learn to partner with tenants rather than squeeze them for every last dollar of guaranteed rent.



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