This week, we look at how Asia’s diversified businesses have shown they can pivot quickly in a crisis. Plus, an AI-powered online marketplace is helping US workers find jobs. |
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We all know that the coronavirus pandemic is going to reshape the global economy, whether in the short term or for the long haul. Even as the United States and Europe contend with what the IMF says will be the largest economic decline since the Great Depression, Asia faces unprecedented risk. |
Yet the Asian region may also provide early signals about how the globe can emerge from crisis. In “Could the next normal emerge from Asia?,” we look at how its nations and companies will likely play a leading role in defining what normal looks like on the other side of this crisis. |
The most vulnerable. Sixty percent of the world’s population lives in Asia, and according to World Bank data, it’s home to around 35 percent of the world’s poorest people—those likely to be hardest hit by the coronavirus. |
At the same time, it boasts some of the globe’s most resilient economies and biggest companies. Asia accounted for all seven of the economies that achieved or exceeded 3.5 percent real annual per capita GDP growth for the entire 50-year period covered in a 2018 study on developing global economies by the McKinsey Global Institute. |
Rebounding. Even the countries hit by the 1997 Asian financial crisis returned to health and were girded for the 2008 global crisis. Likewise, Asian companies are among the globe’s high performers, with 43 percent of the world’s largest companies by revenue headquartered there. These companies have to be resilient because they face the same digital disruption and quickly evolving consumer demands familiar to companies across the globe, but in fast-growing markets. |
Asia was already a hotbed of trends that were helping to define the future of work and consumption, and the pandemic has hastened them—a shift to contactless commerce, adopting remote learning and workplace tools, and an embrace of e-commerce. The region’s well-diversified, horizontally integrated conglomerates have already shown they can pivot quickly in times of crisis, and the pandemic will call for it. |
Some signs of optimism. While China’s consumers clamped down on some areas of discretionary spending during the height of the COVID-19 crisis, by late March, 49 percent of the 2,500 Chinese respondents we surveyed believed their economy would rebound in two or three months and be as strong—or stronger—than before the coronavirus outbreak. |
The pandemic has shown how vulnerable companies and government can be to weak links in the supply chain. We could see production and sourcing potentially moving closer to end users, and companies localizing or regionalizing their supply chains. The dynamic could be especially prominent in Asia, where a growing middle class creates its own demand. Going forward, companies may accelerate their supply-chain transition from China to other parts of Asia. |
The future of Asia is now. We said that back in 2019, and we still anticipate a strong long-term growth trajectory in the region. By 2040, Asia is expected to represent 52 percent of global GDP. We may look back on this pandemic as the tipping point when the Asian Century truly began. |
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OFF THE CHARTS |
To restart nationally, go local |
Governments that want to restart their economies first must have public-health systems that are strong enough to detect and respond to coronavirus cases. Leaders should recognize that regions may differ significantly in their readiness; a local response matrix can help them understand the COVID-19 outbreak in regions more precisely. |
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MORE ON MCKINSEY.COM |
Food retailers: A critical role | Here are six actions food retailers should take to help their communities, their employees, and their businesses during the pandemic. |
How payments can help the world adjust | So far in this crisis, payment systems have proved resilient and reliable, as they have in earlier periods of turbulence. That’s welcome, because the financial-services industry’s stability will play an invaluable role in rebooting the global economy. |
Wanted: A clearer picture of the economic impact of COVID-19 in Africa | Many African countries are still in the early stages of organizing their responses to the coronavirus into focused, prioritized efforts that make the most of the limited time and resources available. |
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WHAT WE’RE DOING |
Helping displaced workers through AI |
The coronavirus has turned the US job market on its head. While businesses across the travel and hospitality sectors have been hit hard, big retailers and delivery companies are expanding, reportedly trying to hire some 500,000 or more people in the coming weeks. |
The Food Industry Association and Eightfold.ai have teamed up to create an online marketplace to help people who have lost their jobs during the coronavirus crisis find work. The Eightfold.ai-powered platform, Talent Exchange, launched on April 6. |
The platform’s promise, according to Eightfold.ai CEO Ashutosh Garg, is to help business leaders take care of their people. “If your company is going through tough times, you can place your workers into roles at other companies that need their help,” he said in a press release. “Doing so will fill critical shortages and create goodwill with your workers, in hopes that they will rejoin you when business conditions improve.” |
In a single dashboard, Talent Exchange helps employers understand how their workforce has been affected. Employers can send a link to employees that lets them create profiles that hiring companies can see. Candidates are matched with available roles using artificial intelligence. |
McKinsey is supporting the effort with research on the rapidly evolving US job market and insights gleaned from discussions across a breadth of sectors. “There is a huge labor mismatch, and individuals are being affected very differently—from retailers furloughing tens of thousands of workers to other organizations needing to hire more than 100,000 workers quickly. We’re excited to help bring a scalable offering to the market,” said McKinsey partner Andrew Davis. |
Talent Exchange, available in 15 languages now, is expanding to other affected geographies and sectors that have a growing imbalance of jobs and available talent. Employers who would like to use Talent Exchange should visit the Talent Exchange website or email talentexchange@eightfold.ai. |
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BACKTALK |
Have feedback or other ideas? We’d love to hear from you. |
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Copyright © 2020 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007
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