By Yiannis Seitanidis

The ‘new world’, as it emerges after the coronavirus pandemic, will be more complex than anyone could have imagined, according to Nobel prizewinner Christoforos Pissarides.

During a public lecture at the University of Cyprus, entitled ‘The World and Cyprus Economy after Coronavirus: Where Are We and Where Are We Going?, the Regius Professor at the London School of Economics and Professor of European Studies at the University of Cyprus discussed the changes that the epidemic has brought to the economy.

These are changes that need to be properly addressed by companies, the public and the authorities, he said. Small countries such as Israel and Denmark have taken measures to prepare them for “the new normal”, but in the case of Cyprus (and Greece) there was still a lot of work to be done, he said.

“The changes that the coronavirus has brought to the economy, science and society in the two years of its existence are far greater and more complex than anyone could have imagined,” said Pissarides.

One of Pissarides’ most interesting conclusions is that the changes that coronavirus has brought to the world of work allow for an extension of working lives. Demography is putting pressure on economies, but extending working life, a necessary measure, is not easy to implement, he said, or at least it wasn’t until the pandemic changed the way people work.

“The irony of Covid is that during its lifetime it hit the elderly far harder than the young, but as it goes it leaves a legacy that is far more friendly to the elderly than the young. Working from home, travelling less, attending meetings online, getting medical advice online, etc. are exactly the things that older people like!”, Pissarides said.

He identifies wider changes in the labour market with the pandemic accelerating changes and the transition to automation.

In the next 15 years around 10-20 per cent of jobs can be automated (according to Oecd and McKinsey Global Institute) with manufacturing, retail and food being the main sectors.

Before the pandemic, the job-creating sectors were:

– Health and care

– Education and training

– Leisure, tourism

– Household helpers

– Personal assistants

The pandemic accelerated automation to reduce reliance on human hands, and social industries were badly hit because they rely on social interaction.

“This closed more jobs and opened fewer,” Pissarides said.

Businesses reacted to the pandemic by introducing new ways of working to minimise social interaction including remote working, online consultations such as those in the health sector, less commuting, and webinars instead of seminars

Pissarides predicts that many of these new ways of working will remain, creating a “new normal”.

Automation will not be reversed and as a result, job closures will accelerate by perhaps 5-10 per cent on top of the 10-20 per cent peedicted. New job openings will slow down and public health will be a new factor affecting working conditions.

It is estimated that about 20 per cent of work will remain remote and the online retail market (platform economy) will grow even more.

‘Virtual rooms’ for work meetings will also grow.

Regarding Cyprus, Pissarides describes Cyprus’ digital infrastructure as excellent, but despite the progress that has been made in the provision of government services, e.g. tax returns and traffic permits, much remains to be done.

“Digitalisation gives us a unique opportunity to simplify bureaucracy, which we are unfortunately resisting,” he says.

At the same time, he stressed that the changes taking place in labour markets required greater flexibility by businesses

“Cyprus is dominated by small self-employed units, which find it more difficult to adapt to the new conditions of flexible working. The government can facilitate developments here with its tax policy and service provision, as we outlined in our plan for the Greek economy,” he concluded