William Wheaton, MIT, CBRE | March 2020
Before the onslaught of coronavirus, most developed economies were moving along a secular trend with an increasing share of “virtual” transactions and “virtual” economic relationships. The share of consumer purchases made online through E-commerce has been growing steadily. The contract between employees and their firms was also evolving towards greater flexibility with remote or home-based work. Lending, mortgage origination, and even home buying were experimenting with web-based platforms.
Now all of a sudden these sorts of changes are being thrust upon populations that here to fore may have been reticent to adopt them. Medical Experts suggest coronavirus contamination is far less with package delivery than with a visit to the mall. Firms are being asked to allow all kinds of employees to try working at home – in order to support population sequestering. In the end many jobs, tasks and transactions which were not yet “ready” or “suitable” for conversion to a virtual format are being forced to convert – at least on a temporary basis.
So what will all this mean for the longer term trend in “virtualization”? It’s impossible to know for sure, but educated speculation is certainly possible. I see two possibilities:
1). Those activities or individuals forced to convert by the coronavirus in fact turn out to be not appropriate or not yet ready for this evolution. In this case, once the virus is tamed and conquered – which it will be – society will return to the spot it was in prior to the virus. We will all be delighted to reconnect with colleagues, places, stores, activities – in person.
2). An alternative is that as activities and people are forced to convert they will innovate in order to maintain themselves. Through this “experiment” they will learn and discover new “virtual” techniques, strategies, or preferences that were overlooked or not tried before. In this situation the long term growth curve of web-based activity will experience a sudden positive jump which may turn out to be permanent. Possibly even its time-based trend will increase as well.
Taking these two options together suggests that the long run movement towards a more virtual society is only likely to increase as a result of the coronavirus “shock”. A very unpleasant “Necessity” has once again become the mother of Invention and Evolution.