CREATING A POST COVID ECONOMY

Coronavirus: The world after the pandemic | Financial Times

Having been in self-isolation for a week with flu symptoms before the recent announcement by the UK Government to stay indoors, it was easy to become over-reliant on news feeds and social media to find out what is happening in the World. 

Fortunately, my view is that much of it has been positive and the most uplifting element has been the tales of kindness from all over the UK ranging from restaurants sending free food to NHS staff to local shops making deliveries to the most vulnerable in our society. 

In addition, innovative firms have been working around the clock to create technical solutions to some of the problems raised by the pandemic, whisky and gin distillers have changed their operations to produce hand sanitizers, and supermarkets have ensured that their suppliers are paid promptly.

Despite everything, it has been a time when the nation has largely come together, put aside petty differences and focused its collective effort on ensuring that we come out the other side. 

Of course there are exceptions to this including major businesses that have treated their employees and suppliers badly at a time when they needed all the support they can get. 

When this is over, I hope that consumers will not forget how businesses such as Sports Direct and JD Wetherspoons, as well as so-called celebrity businessmen such as Gordon Ramsay and Rick Stein, have dealt with the current situation and, more importantly, the wellbeing of those working in their premises.

There are also those who continue to spout their bile on social media and hiding behind the “we have got to hold government to account” mantra as a convenient excuse. You would expect those with some iota of intelligence to behave better when the world is in this mess and especially when it doesn’t take much effort to be kinder at these difficult times.

But what about the future and will we be facing recession or boom when we emerge out of the current situation? Of course it is totally unprecedented for any government to commit hundreds of billions of pounds to essentially put the entire economy on pause for three months and this action does not necessarily mean that everything will be the same when we eventually emerge out of this situation. 

And whilst the UK Government is now supporting the salaries of both the employed and self-employed over this period, this will not stop a recession which some estimate will be as deep as a 15 per cent drop in economic output during the next quarter. 

The real question, as I discussed last week, is whether there will be an immediate bounce back in the economy that will lead to higher levels of growth as the economy gets back to normal quickly? 

Alternatively, will the recession, as some economic commentators have noted, leave lasting scars that could lead to further austerity measures and higher taxes which would stifle any recovery.

In this respect, it is critical that policymakers start thinking immediately of the interventions that may need to be made to ensure that economies at a national, regional and local level not only recover but also create a resilience for the future. In particular, issues such as productivity and growth will be more important than ever for businesses in every part of the UK.

There are also wider questions about the sort of business community we want to live in the future and whether, because of the changed working practices we have all had to undertake during this crisis, we will want to return to the previous normal? 

For example, will the future of retail, which was already a declining sector, be shaped by the demand created through online stores and will local high streets be changed forever by the forced closure of many small shops and the power of larger firms over the digital world? 

Will we all expect everything to be delivered to our homes or will we still go out shopping and eating? On the other hand, with people living off takeaways for three months, will those restaurants that have survived this pandemic see a massive boom in demand once everyone is no longer social distancing?

Will we need to continue to build large office developments in major urban areas when employees will have seen the benefit of remote working or within shared spaces closer to their homes? Will there need to be so much business travel when technology has demonstrated that conversations across continents can be done just as easily online and without the hassle? 

Some believe that this shock will transform the way we all work forever as there is a shift away from bricks and mortar businesses to digital delivery. Indeed, having terrible mobile phone reception and less than adequate broadband speeds (which many of use living across Wales have had to put up with for years) will no longer be acceptable to both individuals and businesses as we move towards greater use of online working.

But in these unprecedented times, nothing is certain and even highly successful digital businesses such as Uber, Expedia and AirBnB that now have no income coming in may not survive the current lockdown.

Certainly, the next six months will be the most important period in recent economic history and whilst I have opinions, like others, about what could happen, we are walking into the unknown with no real idea of what the future will actually look like. 

I can only hope, as I always do, that the brave new world we are entering soon will be better than some may expect it to be.


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