What Changed Before and After COVID-19

The public inconvenience caused by regulations in areas such as distribution is growing

Institutional reforms tailored to changing conditions, including greater labor flexibility, are needed

An online delivery service I often use arrived as much as four hours later than promised. Under normal circumstances, the items would have arrived around the time I got off work, and I would have been able to make dinner with fresh ingredients. Instead, they did not arrive until nearly 11:30 p.m. The delivery worker, who showed up in the middle of the night drenched in sweat, repeatedly apologized, saying that deliveries were already heavy because of COVID-19, and that because it was the day after mandatory closure, order volume had risen to more than 10 times the usual level, making it impossible to arrive on time.

As the novel coronavirus crisis drags on, major changes are taking place in the way we live. With the entire population maintaining a state of semi-voluntary, semi-compulsory isolation, demand for daily necessities and food ingredients through online shopping and delivery has surged. Companies have expanded remote work, and offline university classes are being replaced by online lectures. Hospitals, too, have begun offering telemedicine on a temporary basis. In a courtroom in Daegu, remote video trials have even appeared.

As lifestyles change, systems that create inconvenience in our society are beginning to emerge one by one. Regulations in the distribution sector, which is directly tied to daily life, are especially conspicuous. Since large discount stores close at 10 p.m. and are subject to mandatory Sunday closures, the waiting and inconvenience fall entirely on consumers. One cannot help but note that if drones had been used for delivery services, there would have been no risk of infection and delivery costs would have been lower, yet even proper research has not been conducted because of various regulations.

The problems with rigid labor policies have also been laid bare. Health and sanitation products such as masks and hand sanitizers have even run into shortages, yet factories have been unable to increase supply in line with demand because they must comply with the high minimum wage and the 52-hour workweek. The government hastily relaxed regulations only for mask factories, but it could not calm the anger and anxiety of citizens who were unable to obtain masks. Since companies had already adjusted their facilities and staffing to comply with the minimum wage system and the 52-hour workweek, it is not easy for them to respond quickly to a surge in demand.

It has therefore become important to increase labor flexibility so that companies can appropriately adapt to a market environment that changes constantly. Applications for loans from self-employed business owners facing management crises due to the economic downturn are increasing, but the pace of document screening is not keeping up with their urgent needs. This is because of the 52-hour workweek for bank employees. Just as the 52-hour workweek cannot be applied to medical personnel treating coronavirus patients, standardizing wages and working hours by law produces major side effects. Only when each company can make decisions according to its own circumstances can it respond flexibly in a crisis.

In many other areas as well, demands are growing for institutional reform suited to a changed environment. Because of COVID-19, the government has temporarily allowed telemedicine at hospitals. Patients can now receive treatment by phone from home, and once the prescription is sent to a pharmacy, they can consult with the pharmacist and receive the medicine by courier. Patients who have experienced telemedicine may well wonder why the government had been blocking such a convenient system.

Institutional improvement related to sanitation is also needed. Because of infection concerns, the government has relaxed regulations on the use of disposable cups inside stores. Disposable cups are cleaner and more hygienic than reusable ones. Even apart from the coronavirus, hygiene is an important issue directly tied to health, so recognition has once again grown that it is reasonable to allow consumers to choose.

As we experience COVID-19, many changes will take place in our economy going forward. For now, those changes may feel burdensome, but market participants will have the opportunity in the process of change to discover what consumers truly need and which methods are more efficient. In that process, flexibility needs to be increased so that standardized systems do not obstruct change. As we overcome COVID-19, I hope our economy will take another step forward.

Eun-kyung Kwak, Director of the Corporate Culture Office, Center for Free Enterprise (CFE)

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Original title: 코로나19 이전과 이후 달라진 것들

Author: Eun-kyung Kwak

Date: 2020-03-23

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=22&idx=22500