ISOLATION ECONOMY: THE GOOD, THE BAD, THE UGLY
The isolation economy, a concept which seems to be the new world order now that COVID-19 has changed everything..
By Josephine Edwards
The isolation economy, a concept which seems to be the new world order now that COVID-19 has changed everything, is quite a big change from the sharing economy, which had been the vogue for the last couple of decades. The sharing economy is based on the premise that you don’t necessarily have to own everything you use, thus ensuring less spending and more earnings. You can rent a needed item off someone else for the duration when you need it. You can also rent out your own property when you’re not using it. For instance, Airbnb, Uber and Socar were major players in the sharing economy, allowing others the use of homes and cars for a fee.
The isolation economy is not an entirely new concept. In fact, the global economy was already on the way towards this trend, and the journey was simply accelerated by lockdowns in many countries due to the coronavirus crisis. The isolation economy works based on the concept that you do not need to travel in order to get or do things. Work from home, online meetings, digital movie releases, food and grocery deliveries, online shopping, and so many more which we have already begun to experience are the features of the isolation economy.
The question now is, how does this major shift affect the lives of individuals, businesses, countries and the world at large? Because the isolation economy is based on limited travel, the need for office spaces will become very limited. For those who still choose to rent office spaces, they will most likely opt for smaller spaces. On the flip side, now that everyone might be at home more, living spaces in the new era may become bigger. Home offices, although already existent, might become a norm in every household. As for education and medicine, there would be a greater shift to the use of videoconferencing as a tool to facilitate classes and doctors’ visits than ever before. In-house gyms may become more commonplace as the isolation economy gains a hold in many countries. Food, grocery and goods deliveries will increase because of higher demand from people who now spend a lot of time at home.
All of these may sound great, but there are certain unpalatable parts of the new isolation economy. The isolation economy might encourage extreme social isolation, which in turn may lead to decline in the mental and psychological health of people. Also, social isolation may have an impact on creative thinking, especially with the absence of brainstorming sessions in schools and offices. Worse still, certain businesses which suffered during the COVID-19 crisis may never be able to get back on their feet, leading to unemployment for a lot of people. Service industries which relied on walk-in customers, like restaurants, bars, stakeholders in the beauty industry, movie theatres, etc may be forced to scale down and/or close down.
Will the world economy ever return to its former state before the coronavirus? The answer is a definite no. While certain aspects of the sharing economy will remain, their impact will be meagre due to the new trend which is set to take over our world. However, the question we should be asking is the extent to which the changes will affect our lives, both domestic and professional, and how we can prepare ourselves to thrive in the new system.