The IT industry chrysalis

“We believe that 25% of employees in our offices, spending only 25% of their time at location, can make 100% of the people productive,” N. Ganapathy Subramaniam, chief operating officer of Tata Consultancy Services, said last week. 
 
A mere 24 words that—if followed up on by TCS and its peers in the Indian IT industry—could transform the ecosystem created around a sector that employs 4.36 million. What if working from home is the new normal for 75% of them? Or 60%? Or even 40%? 
 
Tech offices are real estate hoarders, typically clustered in massive IT parks in pockets of a city. Electronic City in Bengaluru is one; another is HITEC city in Hyderabad. What happens to commercial real estate developers like Embassy, RMZ or DLF when fewer people are needed per office? Already, overall (not just IT) office leasing this year is expected to be lower than 2019.
 
What happens to the PG (paying guest) accommodations, hostels, co-living and other residential real estate projects that have mushroomed around IT parks? Co-living firms like Zolostays and Stanza are already realigning their business models as occupancy rates halve.
 
What happens to the food ecosystem? To caterers supplying meals to these campuses. To the restaurants—McDonalds, Starbucks, etc.—that have sprung up in these campuses. To the migrant workers who run the roadside tea stalls, must they re-migrate?
 
With fewer employees commuting, organised and unorganised corporate shuttle services will start to feel the pinch. Like EV cab company Lithium, or self-driven car pool aggregator QuickRide. Ola’s and Uber’s pool services, already under a cloud due to social distancing fears, could end up being buried. Public transport in these pockets of the city will be affected. And even interstate transport services, if there are no takers for that weekend getaway. 
 
Moreover, employees don’t even have to stay in the same city to work from home. What does that do to urbanisation? Another reverse migration? What happens to civic and infrastructure planning?
 
Speaking of infrastructure, can telecom companies cope with the spike in demand from a new work-from-home economy? Seems not, given networks are more robust in commercial areas. Networks started teetering just two weeks into India’s lockdown as people started working from home. On the other hand, Reliance’s broadband internet product, JioFiber, could get a boost.
Graphic: Prajakta Patil/The Ken
Cyber security risks are on the rise during the lockdown, which pose a threat to the companies who deal with sensitive data, like bank transactions or health records. No offshore client will stand for that, and some jobs are already being “reshored.”
 
It’s not just a new work-from-home normal. The pandemic-induced lockdown has turned out to be the perfect trigger to speed up automation, as we wrote earlier this week. What happens when 25% work from the office and automation takes over more and more?
 
“It’s about time. Our current operating model is currently a 20-year-old legacy. In some ways, this crisis actually leapfrogs us into a new model,” said TCS CEO Rajesh Gopitnathan.
 
There’s this simple yet powerful concept in systems thinking called emergence.
 
It means that sometimes when things come together, something new and unexpected happens. Something that wasn’t evident from its individual elements. It’s biological as much as social. Like a caterpillar becoming a butterfly.
 
I wonder if that’s what will happen with the IT industry ecosystem.
 
These are changes the industry will see even if, say, a vaccine for Coronavirus is developed. Something India’s largest vaccine maker is currently grappling with.    
Vaccines are the answer. But are they also a problem?   Rohin

Dozens of teams across countries have been working round the clock for the last few months to develop a vaccine to protect human beings against Covid-19. In India, Serum Institute, the world’s largest vaccine maker, is starting trials on a variation of the BCG vaccine that was first invented in 1919.
 
Serum Institute’s current BCG vaccine, which it sells in over 100 countries, is largely administered to newborn babies. But if its tests on high-risk adults in India turn out favourably, it expects to increase vaccine production. By 300-400 million doses.

But as vaccine makers rush to protect us against Covid-19, who do we turn to for protection against measles, mumps, rubella, diptheria, whooping cough, and tetanus?

If lockdowns were a second order fallout of Covid-19, a potential rise in vaccine-preventable diseases is a third order consequence. Lockdowns have caused a significant drop in child immunisation rates around the world, which in turn could lead to a rise in these diseases for society at large as our herd immunity falls.
Using the week of February 16 as a pre-coronavirus baseline, PCC found that during the week of April 5,  the administration of measles, mumps and rubella shots dropped by 50 percent; diphtheria and whooping cough shots by 42 percent; and HPV vaccines by 73 percent.

[…]

The problem is global. National immunization programs in more than two dozen countries have been suspended, which could also leave more than 100 million children vulnerable, a consortium of international organizations, including UNICEF and the World Health Organization, recently reported.

“Internationally, measles and diphtheria will pop up around the world. Even with limited travel, they can make it into the United States,” Dr. O’Leary, an immunization expert at Children’s Hospital in Denver, said.

[…]

One concern is that if booster shots are missed — for diseases like measles, mumps and rubella for 4- and 5-year-olds, and tetanus and whooping cough, for 11-year-olds — immunity will begin to wane.

At 11, children should also receive their first meningitis vaccine. Preteens are recommended to get the HPV vaccine series, which protects against certain types of cancer. Vaccine Rates Drop Dangerously as Parents Avoid Doctor’s Visits, The New York Times
Covid concerns are overshadowing everything. To the extent that they’re driving a deeper wedge between federal and state.
Federalism under threat   Rohin

In both the US and India, Covid-19 is creating more fissures in already cracked relations between the federal and state governments. The scale of Covid-19’s impact on state economies, and thus the scale of their economic response, is something that defies all prior norms around federal-state fiscal relations.

Normally, states can neither print money nor directly borrow from international markets, as that is the job of the central bank and federal government. So, they must ask the federal government for additional aid and resources. 

This tension is amplified when there is a different political party at the state and centre. Like, say the Democrats in New York and Republicans at the centre in the US. Or, the Communists in Kerala and the BJP-led NDA coalition at the centre in India.

“The Centre is pushing the states in deep debt by levying exorbitant interest rates. This policy will demolish the basic financial structure of the states. This should be rectified,” said Kerala’s Finance Minister.

In the US, meanwhile, the Republican leader of its Senate suggested the (once) unthinkable—that states file for bankruptcy.
“I would certainly be in favor of allowing states to use the bankruptcy route,” he said. “It saves some cities. And there’s no good reason for it not to be available.”

[…]

The remarks drew a caustic reaction from Gov. Andrew M. Cuomo of New York, who called the bankruptcy suggestion “one of the saddest, really dumb comments of all time.”

“OK, let’s have all the states declare bankruptcy — that’s the way to bring the national economy back,” he said.   McConnell Says States Should Consider Bankruptcy, Rebuffing Calls for Aid, The New York Times
Praying for a solution? Well, you just have to do it indoors.
Keeping the (hi-tech) faith   Kay

For the first time ever, Malaysian Muslims will break their day-long fast without a visit to the lively Ramadan bazaars. All thanks to Covid-19. While street vendors support the ban of physical bazaars, they’re not giving in to the pandemic. For the first time ever, these mom-and-pop traders will bring their businesses online.

In Indonesia, ride-hailing companies Gojek and Grab are offering “ready-to-cook” features on their respective apps, allowing consumers to get frozen meal-kits delivered to their homes in order to break their fast. 
 
In the past few weeks, the world is witnessing a series of changes not just in businesses, but also in how we live, including how people worship. Masses or sermons are being carried out online. In India, Hindu temples are striving to keep up with its devotees by kitting priests out with body cameras as they perform rituals. 
But not all religious institutions accept such changes gracefully. After centuries of rituals and customs which require one to be physically present in places of worship, the lack of a physical presence has disturbed many. That’s possibly why there’s been huge resistance to closing churches in the US. 
It does make one wonder if technology could fully substitute religious rituals. Or is it a mere stopgap measure? Can you find God or togetherness on a Zoom call? Forms are different, but the substance remains the same—spread love and care to your brothers and sisters.  From praying to grooming, a lot of high-touch activities are going to move indoors. Just ask the local barber.
Grooming in a black swan moment   Olina
I’d long been planning a haircut. It’s an annual ritual for me because:   Haircuts for women are expensive I’m quite lazy
  With summer round the corner, I thought it would be the perfect time for this. Then Covid hit and all my grooming plans have been on an indefinite hiatus. Now, I haven’t been as bold as some of my colleagues, or the folks on Twitter who have given themselves or their loved ones haircuts. 
Nor am I planning to do so, like the 80,000 online shoppers who’ve added grooming tools like “hair trimmer, epilator, beauty products, and waxing strips” to their post-lockdown shopping cart.
Source: Google Trends
After all, who’s looking at me?
But jokes and bad haircuts apart, the grooming industry, across countries, is probably taking a long, hard look in the mirror. The local barber shop and beauty salon, the grooming equivalent of the kirana, is one neighbourhood business that will suffer inordinately. They’re facing a Catch-22: earn a livelihood? Or save lives from infection?
  It’s a difficult choice. The Malaysian government, for instance, revoked its permissions for barber shops and beauty salons to open up in green zones, after widespread fears of transmission. Same with Kerala, the Indian state that flattened the curve, which allowed barber shops to open briefly, before the central government came down hard.
Times are hard for all high-touch, close contact businesses. Especially for a neighbourhood grooming shop, just the wipe-down after each customer is going to be insane. Already, these small and mostly informal businesses are asking the government to provide PPE-like gear to keep their operations running, when they do open up to the public. Or face near-extinction.
The chances are, people who can afford it, will stay away. Companies like Urban Company, which aggregate beauty services among others, will fill the gap. They’ve even made beauty services a focus, as of last year. It will be a trade-off between price and safety. But all of this will require a huge shift in behaviour. Style is an innately personal thing. The local barber or salon attendant, the one you’ve been going to for ages, knows what you like. 
Can apps build for that behaviour? 
Till they do, I’m happy watching other people, as they attempt to self-groom and post results on Twitter.
Pandemic market fit
  Nadine
Source: Publika.co.id
Strange times bring forth strange products. The Indonesian Ministry of Agriculture launched a “Rice ATM.” The machine dispenses 1.5kg of rice per person, for free. Making rice available to those in need is essential, but it’s not immediately clear how setting up and maintaining these machines is more effective than distributing packaged rice the conventional way. Vietnam has rice ATMs too–but there they were installed by a private donor
From 0 to -100
  Savio
You remember this chart from a few days back?

It could soon get a lot worse.
“Will we hit -$100/bbl next month? Quite possibly,” said Paul Sankey, who in mid-March predicted that prices could slip to sub-zero levels. Sankey is a managing director at Mizuho Securities.
 
[…]
 
“If you had a stinking barrel of oil in your backyard, would you pay someone $100/bbl to take it away? Yes, and you would probably be relieved you were not charged $300/bbl,” Sankey said in a note. Oil may sink to -$100 a barrel next month, says analyst who saw the big crude crash coming, Moneycontrol
Sankey’s prediction of sub-zero prices was on 18 March, when US crude was trading at about $24 per barrel. The current price is about $16.40 per barrel. What if Sankey gets it right again?

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