Greg Brown, executive director of the Kenan Institute of Private Enterprise, details the conclusions of a new report, developed in conjunction with the North Carolina CEO Leadership Forum, about current transformative economic trends.
The seven underlying forces identified by the report’s authors are approached from two perspectives: their immediate impact in the midst of the coronavirus pandemic, and their long-term effects once it subsides. “There’s probably not going to be a bright line between them,” Brown says. “Some things will go back to normal, and some will be permanently changed.”
Many changes in work, travel and migration patterns are likely to stick in the post-pandemic era, at least for a while. Brown describes a new feeling of separation in how people perceive where they live and work. Knowledge workers tend to have the flexibility to work remotely, freeing them up to move to places with a lower cost of living, and in some cases out of urban settings altogether. The latter decision is likely to be made by older residents with families, while younger people will move into the urban spaces that they vacate.
With a large percentage of their workforces staying remote, businesses could end up saving substantially on commercial real estate expense. On the other hand, Brown says, it remains an open question as to whether a distributed workforce will erode the benefits of everyday physical proximity. “It will probably vary by business and industry,” he adds.
The report also identifies a trend toward the onshoring and diversification of global supply chains, with American manufacturers in some cases opting to shift production from China back to the U.S. Brown says North Carolina has experienced “tremendous interest” from businesses looking to relocate manufacturing and logistics facilities, although domestic operations are likely to be more automated than before.
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