The Danish economy and the light at the end of the tunnel
Text: Narcis George Matache
Nothing stands the test of time, not even a pandemic. In fact, with the process of re-opening well underway, the epidemic is slowly becoming a distant memory, while the economy is all the buzz now. No one is going to be hitting the club or attending festivals anytime soon, the inevitable second wave will make sure of that. However, we need to replace fear with hope, for the sake of our minds, our bodies and our pockets.
An uncertain future
Denmark is an integrated part of the European Union Single Market, and it depends on the economic activity of all the other member states. It’s a consumer society, and our behaviour on the market affects the economy. We travel less (or not at all), we go out less (or not at all), and we consume less. We are on our way of becoming “a generation of supersavers”, wary of taking any financial risks. This means the travel, tourism, restaurant, bar, hotel, event industries are hit, needing government aid support to stay afloat. Other industries have been affected because it became difficult to produce, and even though we consume less, there are certain products we need more than before. Our current way of life means that our consumption has changed as well.
The recession is expected to be almost twice as costly as the 2009 financial crisis. This translates into a high unemployment rate, lower demand for products and services from the population as their supply of money is reduced.
A depletion of government reserves with far-reaching effects triggering a pension crisis and an increase in irrational behaviour, such as crime, suicide etc. I have been affected personally, and am now part of the statistics, and one of the tens of thousands that make up the recently unemployed. However, there is hope that the recovery period will be faster compared to the past financial recession, given the lower debt for average households and the more moderate growth in house prices in many European states.
We cannot expect to go back in time. The pandemic has made changes in the way we work and live our lives. It has put an end to the fast-paced lives forcing us to be more aware of our surroundings. Working from home is here to stay, travelling to a conference will become a rare event and vacations will be increasingly done locally. We cook more at home, garden more, have more time to read, write and be creative. Our digital presence has become more critical, that leads to us becoming more proficient digitally. This dark event, unfortunate as it might be, has the potential of bringing a beneficial change on a national and European level: the regionalisation of production and sourcing operations, to transfer them closer to the end-user. This would boost the domestic economy to the detriment of outsourcing to Asian countries – the usual tendency for most industries, until now.
"Working from home is here to stay, travelling to a conference will become a rare event and vacations will be increasingly done locally."
The European Green Deal After all, the pandemic is only a prelude to the real monster crisis, the climate change, and somehow, our behaviour during the epidemic has contributed to the fight against climate change. Any plans to restart the economy have to consider the larger looming threat. Luckily, there is a European plan in place called the European Green Deal, that will help us recover our economy back to the 2019 level by the end of 2021.
The transition to a green and digital society is the light at the end of the tunnel. A green and digital world translate into cleaner air and less destructive behaviour towards nature, giving it a chance to regenerate. The transition means investment, substantial investments that will create jobs (millions of them) and new professions. For example, the Danish government wants to spend 30 billion dkk on raising the energy efficiency level for our homes, so that we consume less energy. At the same time, the construction sector will get a serious boost too.
If you are recently unemployed, hope is your strongest ally. Think what role you would like to play in a green and digital society and act upon it. Before the pandemic hit, there was already a strong demand for digital skills. Now, this demand has been significantly accelerated, so this is the perfect time for reinventing and taking advantage of the copious amount of information, tutorials and courses to develop technology-centric skills that are going to be useful in every job you might have. The new world is digital and full of opportunities.