And rightly so. COVID-19 has already spurred companies to embrace their future far quicker than they would have organically – from agile working and digitalization, to automation and investment in renewables. If you know where you are going, actions to respond to the crisis today can set you up for the years ahead.
Of course, answering ‘what’s next’ for your business means knowing what’s next for the world; what may have been right for your business BC (Before-COVID) may not be right in the ‘new reality’ that we will soon face. Crystal-balling a post COVID-19 world requires divination of two key questions: when will it happen; and what will it look like?
Now, I won’t attempt to tackle both in a mere 500 words, but I will try to provide some initial direction on how the (macro) path to this ‘new reality’ will play out. ‘What’s next’ will always be uncertain, but I think there are some universal factors which will point the way to the speed and direction of recovery for any given market.
Firstly, the spread (impact) of COVID-19. I’m not an epidemiologist (my standard opening line at the moment), and the data we have is flawed, but there are a couple of facts we know to be true.
It is a singular virus, but its impact varies. It varies for two reasons: actual differences in the spread and fatality of the virus; and data inconsistencies.
Location-specific factors that influence the actual spread and fatality of the virus will, in turn influence the comparative likelihood and extent of second ‘waves’ of outbreaks pre-vaccine – which inform the political response (and subsequent economic recovery). The top five worth watching:
Secondly, there are the data inconsistencies. As we all know by now, the case fatality rate can be significantly overinflated by a lack of testing. My personal crystal ball is that more accurate information on the basics of the virus (infectious dose, viral load, transmissibility, infection fatality rate etc.) will similarly speed up the lifting of restrictions as it better contextualizes the impact of the virus. For example, Iceland has done the most testing on a per capita basis in the world; a recent study which screened 6 percent of their population5 suggested that around 50 percent of cases are asymptomatic (i.e. would not be included in the official caseload of most developed countries or territories). Better information influences the equation for the political response.
I call this out separately to the spread of the virus, as it is related but may not necessarily be reflective, and is individually worth watching. Three things to think through:
Of course, this is only part of the puzzle: the resultant economic outlook will be influenced by, but also inform, the above factors. Together with Eurasia Group, we have compiled three in-depth political and economic scenarios (benign, serious and severe) that can help test your own thinking.
As for the end destination, we are thinking through what the ‘new reality’ looks like for sectors and markets – whether it be the changing nature of work, consumer behavior and demand, or deglobalization of supply chains. Get in touch for more information.
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