In this episode of our New Ways: Leading in a Changed World Series, Pexip interviewed renowned Swedish economist and author, Kjell Nordström. His latest book, “Corona Express: An essay on time travel” explores how society has changed as a result of the pandemic.
Our world has advanced (but also regressed)
For Kjell Nordström, the COVID-19 pandemic has been like going for a whizz in a time machine. When it comes to conferencing, learning and sharing knowledge, changes expected to occur over many decades were adopted in many countries in a matter of days and weeks.
“It’s amazing how offices, schools and universities were able to use these technologies in such a short time period without any discussions or arguments. We just went about and did it,” he says. “The world went from 2020 and moved into 2030 very rapidly.”
The world also went backwards in other areas. Nordström points out European air travel has returned to the days of the late 1970s, an era when passenger numbers were lower.
“There is no reason to believe we’ll be back to pre-Corona numbers in half a year. That’s because the substitute to travel is now so powerful.”
Technology has cushioned the economic fallout
Despite some setbacks, digital technology has helped many countries weather the worst economic effects of the crisis.
Amid the first global wave in March and April of 2020, there were predictions of an economic catastrophe in Scandinavia where he’s based, with double-digit percentages losses in GDP. However, countries such as Sweden, Norway and Finland only had GDP declines of between 3 to 4%.
“Why? It’s because the technological infrastructure was there. We didn't fully understand how powerful it was and how fast you can shift over,” Nordström says.
“This will be analysed and discussed for many years to come.”
From globalism to urbanism
Nordström foresees nation-states gradually ceding their importance and economic heft. “We are entering the era of the urban world, where as much as 75-80% of the world’s population will live in 500 or 600 cities,” he says.
This new urbanism is being fuelled by technology transformation. Even before the pandemic, manufacturing was going through a prolonged phase of digitization, largely referred to as the Fourth Industrial Revolution, or Industry 4.0. Capabilities such as 3D-printing are reducing reliance on global trade and long supply chains.
Nordström notes that even fast-fashion giants like Uniqlo, H&M, and Zara are keeping their manufacturing arm within local markets while still keeping costs competitive.
“We can manufacture things locally today with the help of technology that basically substitutes manpower with sophisticated machines,” he explains. “Machines are producing faster with short lead times.”
So, if he was going back as a CEO today, which industry would he choose?
“Digital anything,” he says. “If you look at the stock market, it’s basically six companies – Facebook, Amazon, Netflix, Google, Apple plus Microsoft that account for 30% of the New York Stock Exchange today.”
“This will continue, driven by the fact we now go urban and regional. We give up certain dimensions of globalization, and we use substitute technologies.”
This episode was filmed with interviewer Ben Campbell in Adelaide, and Kjell Nordström in Stockholm, Sweden – using Pexip video to bring everyone together.
Discover more video interviews from our New Ways: Leading in a Changed World Series, where industry leaders share views on how to thrive in a changed world.