Big changes are coming to the American economy and Michigan business in the wake of the coronavirus pandemic, according to the faculty of Lawrence Technological University.
Bahman Mirshab, dean of the College of Business and Information Technology, said recent reports from the United Nations show that the automotive and tourist sectors would be among those most affected by the economic downturn brought on by the pandemic—and those are Michigan’s two largest economic sectors.
Mirshab said the downturn also reflects the risks inherent in complicated global supply chains and the just-in-time delivery of raw materials that is a key part of lean manufacturing.
“Because of lean manufacturing, organizations don’t keep a lot of inventory, so once something happens in China, it has a global impact,” Mirshab said. “Now we have recognized that while globalization may help consumers, because we pay lower prices, we can become too dependent on other countries. So maybe some industries should rely more on domestic production.”
Mirshab said China has become not only a major exporter of consumer products, but of the “intermediate inputs”—everything from electronics to metal parts to fabrics—used by American companies whose products undergo final assembly in the United States. China’s share of such goods in the global economy has grown from 4 percent in 2002 to 20 percent today, Mirshab said.
Mirshab also cautioned against calls to reopen the economy quickly once the current peak of virus infections passes. “Without universal testing, it may just come back,” he said.
Ahad Ali, associate professor in the LTU College of Engineering and director of LTU’s bachelor’s and master’s degree programs in industrial engineering, said that when factories do reopen, they’re likely to conduct temperature checks of employees entering plants and send those with a fever home. He said factories will also observe social distancing, and that the pandemic may lead to more use of automation in handling manufacturing tasks.
LTU business professor Jacqueline Stavros, an expert in leadership, strategic planning, and organization development, predicts that once travel and gathering bans are lifted, people will remain skeptical, and “organizations will have to assure their employees and customers that they are continuing to operate under safe and sanitized policies… It will take time for people to get comfortable being out again.”
Stavros also said she thinks the trend to more telework is here to stay. In the pandemic, she said, “hundreds of millions of us had to embrace technology as a way of connecting in a matter of days. We are connecting virtually via learning management systems and meeting platforms to learn and get work done.”
The numbers tell the story, she said: Microsoft Teams software went from 20 million daily users in November to 44 million by late March, she said, and in the week of March 14-21, there were 62 million downloads of various virtual meeting technologies.
“At Lawrence Technological University, we were fortunate that we made the investment late in 2019 to start using the Zoom platform,” Stavros said. “Given the COVID-19 pandemic, this was a smart investment, because we went virtual in a matter of days, taking everything we could online from classroom teaching to virtual meetings, student gatherings, and just connecting with colleagues, family, and friends.”
Stavros predicted a “new normal” of more work flexibility and virtual collaboration thanks to the pandemic.
Mirshab said a full recovery from the panedemic might take two years. But he also observed, in a quote attributed to everyone from physicist Niels Bohr to movie mogul Sam Goldwyn to baseball’s Casey Stengel, “It’s difficult to make predictions, especially about the future.”