Esko Aho: Digital Transformation Is Accelerating in COVID-19
Former Finnish Prime Minister Esko Aho warned that the economic shock coming from COVID-19 will be greater than Financial Crisis. However, Aho said in an email interview with World Knowledge Forum (WKF) media team that there will be a big opportunity thanks to acceleration of digital transformation in the post-COVID-19 era. Aho participated in the WKF seven times since 2008. He also served as co-chair of the WKF in 2019. Here are questions and answers.
Q: The coronavirus is more than just a health crisis. What are the impacts and consequences of the coronavirus pandemic on our lives and our societies ? What are the solutions we can find to prepare for the 'new normal' ?
A: It is too early to predict what kind of permanent changes the coronavirus will bring. However, it may have bigger negative impact in the global economy than the financial crisis. A critical question is how long time the health emergency will take.
For sure, this crisis like all previous ones, will have many losers but some clear winners as well. Digitalization will get a boost. We are going to witness a lot of new business opportunities in online services.
Q: What kind of measures would you propose to secure business, maintain jobs and education, and stabilize markets?
A: Governments need to have three simultaneous strategies. For the first, they have to design along-term plan how to limit the pandemic. Concerted global efforts are crucial in this.
Secondly, the pandemic is an economic emergency that requires extraordinary national and international efforts. Global collaboration is needed to limit the negative impact of lock downs in global supply chains and logistics.
The third challenge is to design a plan for the new normal. Governments were late in stopping the virus. Similar mistake must be avoided when bridgingthe economy over the crisis and planning a smooth recovery.
Q: What impact did coronavirus give on the global governance? How should the global governance be reorganized to properly react to coronavirus?
A: Global institutions as well as national governments reacted too late in potential risks of the coronavirus. The right time to make reforms is not now but they are urgently needed for the future.
Q: How will the world be different after coronavirus in terms of international relations?
A: We have two totally different options. There is a risk that this crisis will lead to setbacks in globalization and strengthen protectionist tendencies. If realised, this trend will hit the global growth.
There is a positive option too. Both the pandemic itself and its economic consequences stress the importance of global collaboration. Common and coordinated efforts will shorten the crisis and assist us to return back to anew normal.
Q: How do you evaluate each government's measures to coronavirus, especially Sweden chose a different strategy for coronavirus, called 'herd immunity'?
A: It is too early to make conclusions about efficiency of different national strategies. The Swedish model has short-term weaknesses but let's wait and see.
Q: Please explain how Finland could be well prepared for coronacvirus crisis?
A: There is evidence that well-organized government and high quality of healthcare services have been assets in limiting the impact of the pandemic. Finland meets these two criteria. However, our strategic reserves for the pandemic have not been sufficient. Lack of medical supplies is a huge problem in Finland like everywhere in the world.
Q: You are the founding member of the Silver Economy Forum. How do you expect the landscape of business and industry to change as the life cycle changes?
A: The global community takes sustainability challenges seriously in spite of the fact that do not know exactly how and when we are going to be hit. Aging of population can be quite exactly estimated but still we reject to take it seriously enough.
The Silver Economy initiative has two major targets. We want to create awareness of the challenge both for the public and private sectors. But even more important is to understand that "silver is the next green". Just like sustainability, longevity creates huge opportunities for societies and businesses.
Q: Healthy and active elderly generations are expected to have different needs for products and services than older generations.However, companies often misunderstand these Yong-Old needs and fail. Please advise companies on how to reduce trial and error.
A: We organized the first Global Silver Economy Forum in Helsinki last summer. The idea was to get governments and businesses to work together for the Silver Economy. Some of those prominent business leaders invited to join and speak replied by saying: "The idea is fantastic but we do not know what to say."Companies do not fully understand what kind of dramatic change will take place in consumer demand when population is aging. There is going to be a huge market for products and services designed for silver citizens.
Q: There is a common belief that if older people delay their retirement, younger people lose their jobs as a result. In Korea,discussions about the extension of retirement age showed signs of generational conflict. What do you think about this discussion? How can we reduce the conflicts between generations while expanding the employment of older people?
A: The critical question is to have a long term plan or strategy.Korea is an excellent example of a country facing a rapid change in age structure. Your dependency ratio is now one of the most favourable among the OECD countries. Because of the low birth rate, situation will be changed rapidly. It is time to start preparing for that.
Q: Companies are reluctant to expand the employment of elderly workers because they are concerned about the productivity of elderly workers. This is even truer because the company's production system is rapidly progressing due to the Fourth Industrial Revolution and the demand for manpower is decreasing due to factory automation. Is there an alternative policy that can ease the concern that the burden of social welfare spending on elderly workers is being passed on to companies?
A: There is new evidence that productivity does not decline with age. By providing elderly workers flexible alternatives to stay in the labour market we can reduce costs of welfare spending. Longer stay at work is not a burden if you are physically and mentally healthy.
WKF Media Team