Welcome to Your COVID Economy
A Proposition for Our Innovators
Our world is completely changed forever. But changed to what? We assert that we are now well into the rising of a new COVID Economy, and there is a way forward.
People and organizations have adapted to new ways of doing things like tele-work, Zooming, life online and making enormous investment in health services and much more. The challenges are also with us – unemployment, debt, disorientation and the mental health fallout of such an immediate disruptive change that has shaken people’s lives.
To ensure we move forward and not default to a broken past we need our innovators to stand up and take action to deliver their very best.
We hope these words are a sign of a way forward and others will join us on this journey.
When COVID-19 hit in March 2020, there was a mixed response to the immediate health threat. However, in doing so they inadvertently triggered a deep and complex disruptive change that impacted the short and long-term performance of every organization, economy and society in the world.
Many organizations were quick to adapt. But this could only ever be a short-term fix for a much longer-term issue.
Lockdowns were immediate forcing ‘work from home’ for knowledge and digital service workers and leaving many unemployed. Universities quickly shifted to online learning, and students were left to learn, without a business as usual, institutional education. Offices in central business districts became vacant. Businesses that depended on worker foot traffic were forced to close through the lockdown and the lack of trade. Investment in health services skyrocketed as governments worked to stem the flow of deaths.
And so as the social-economic virus spread, the world became a very different place to that of January 2020.
Not only was this a health, safety and business disruption, it was also an immediate tectonic shift in consumer behaviour, channels to market, supply chains, profit models, business processes and working arrangements – and those that were able to quickly adapt have survived and are now in a position to assist all to recover to this ‘new normal’.
And so the COVID Economy was born.
Covid and other emerging viruses are not going away and will continue to be part of our work/life environment for years to come. Hence, the social-economic conditions driven by a virus – either endemic, epidemic or pandemic – must be factored into all organizational operations and individual job creation, globally.
We either live with it, learn from it, and leverage it … or be the victims of circumstance and wait to fall foul of its consequences.
We at Resilient Futures strongly argue that, there is a way forward.
It has been tough for many, but there is a way forward if we choose to really look ahead and discover the many new pathways that are emerging every day in the COVID Economy.
In doing so, it is understandable to want to go back to the past, but that is not possible. The things that matter were not in great shape in 2019. That’s a fact. Sure, we can take what will work from our past, but only if it is valued in our future.
Remember… what was our starting point for this pandemic? Were we a global, social-economic paradise? Were our financial systems working for the majority of people? Were our political leaders illustrating the behaviour required to effectively deal with the issues of geopolitical conflict, exponentially changing work, economic migration and the impact of globalization? No, we were in an advanced state of MAD. Managed Adaptive Decline whereby we were adapting to a declining set of conditions, at an exponentially changing rate, taking us into an irretrievable situation, but promoted and politicized as occurring in a very well-managed manner. MADness at its best.
Now times are different. With pain and challenges in many ways we have a blank canvas from which to work by asking, what is MY way forward?
When a rapid and highly disruptive event occurs, performance is lost and the information and knowledge that was relied on to produce that performance is also severely degraded. Last week my business was performing at this level, and I and my team knew how that worked and we had a plan to maintain it. This week, that is all in the past and in such a state of induced ignorance, everything in the future appears broken, complex and problematic. And while this state of affairs is the new reality, the expectation to perform is still demanded.
Without the past to guide our future, what is the one thing that can be a stabilising presence to guide you forward? The values that you hold to be immutable and are non-negotiable irrespective of what disruption brings.
So, this is our time to dig deep and ask ourselves – what do I really value?
What do we really need and want? What is the overall cost? What will the unintended consequences be if we get it? How will it impact my kids, my grandkids and the people they value? These questions have been put many times before. But this time as hard as it is the time to re-value ours and other’s lives to establish our real values and motives in moving forward within the COVID Economy.
Paul McCartney once sang: ‘the love you take, is equal to the love, you make’. While he is so right, I would add: ‘the life you live, is equal to the legacy you leave’.
In re-valuing our lives and world we must also the begin the process of developing new mindsets, skill-sets and strategies to create a future of our choosing. One that will generate sustainable value within the COVID Economy, and beyond.
What is it to be ‘PanSafe’? To be free to be at work, at home or out and about and feel safe in a new world of pandemics? What are the health service opportunities for a market of 7.8 billion people?
Who will service the millions of people working from home or out of office that won’t be returning? Estimates in knowledge-based economies put this number for full and part-time workers that could work remotely at between 35 to 45%. The Telework Industry is a massive new market that all employers need to have serviced. New standards and services consistent with worker health, safety and support are in demand now, and there for start-ups and existing services to leverage.
How will local communities take advantage of their new-found wealth of people not traveling to work but being and buying local? The uplift in local economies has shown to be massive when people live and work in community.
The digital transformation that was set to take years, is now upon us. Don’t you smile when someone says ‘Haven’t seen you for ages, yes, love to catch. I’ll Zoom you!' Who doesn’t have a video or audio streaming account? But much more importantly we have tele-medicine. General practice and mental health have been quick to adapt, and painful as it may have been, it works for many of the health issues we have. These are only a start in delivering better health outcomes, cheaper and more accessible for everyone, world-wide.
New manufacturing facilities make local production available to every city, town and village. MicroManufacturing in clean environments can create new and more robust supply chains and design, develop and distribute in small batches to meet local needs. And not only ‘dumb goods’, but ‘smart products’ with new digital business models that open up new global markets. MicroManufacturing offers a whole new world for anyone with an innovative idea to service distributed populations.
And yes, global trade must continue. But with value networks that drive deep into local micro-production systems and provide an array of opportunity for small to medium business and start-ups, and fair wages for all.
These are but a few of the opportunities available if we look and move our way forward.
There are questions to be asked, and new answers found. Like …
What do we do with all of the square metres of space we can’t use and in many cases don’t need to run business, healthy societies and our economies? We have grown businesses and economies in the ‘square-metre economy’ of densely populated cities for the past fifty years. Now, that has changed. So think about how we refurbish our cities to make them more hospitable as homes and places to visit and less densely packed with day workers.
What about the unemployed and under-employed? This is a tragedy of epic proportion. We must have both very short and long-term assistance and job creation that limit the suffering of people who have already worked hard to gain a place in a just society and deserve the respect of a good job.
Too many times we place the onus on government to supply these answers. Sure, they must lead and where appropriate fund new job and business opportunity. But in many cases the wheels they turn take too long to rapidly generate innovation at the speed of mitigating the social and economic damage of disruptive change. This is up to enterprise and socially minded commercial interests to take on the mantle of innovators for the common good – after all, these are our people, our clients, customers and community. Without them, what do we have?
But there is one job that all governments federal, state and local must do, and that is – ‘defuse the debt bomb!’.
Government must rapidly take action to reset household debt. The debt of 2019 was already too big for too many to bear. The debt within the COVID Economy is now massive. And without intervention from those who are there to represent their people, their people will make alternative arrangements either individually as a whole that will not be as well-organised or as ‘pretty’ as that of a responsible government.
Business debt also requires a complete overhaul.
The Interest Rate in Australia averaged 4.20% from 1990 until 2020, reaching an all-time high of 17.50% in January 1990 and a record low of 0.25% in March of 2020. Then why in March 2020 – ahead of the pandemic – were lenders charging rates like 15% to 50% plus? Does that behaviour foster a strong small to medium business (SMB) sector – the growth engine of any nation? What will SMB lending look like in the COVID Economy?
Maybe for large and corporate business borrowing rates may also be too high? Who knows, as many deals are done quietly face to face and not in a situation where a bank algorithm advises the owners of a small business – ‘computer says no’. And let’s not forget, corporates world-wide need SMBs, and vice versa. In a whole-system economy all nodes must be healthy and valued for value to grow and be generated and sustained.
Government must also move quickly to unchain wealth that is locked up and not being enabled to directly flow into the economy through wages. Retirement funds tend to be national, big and bond and equities focused. Professional and part-time investors tend to also focus on equites alongside property. The retirement savings of baby-boomers accumulating over the past sixty years has meant an enormous ‘weight of money’ ripe for investment. Such $trillions is managed by corporate fund managers and given that the equites market tends to be corporate by nature we have an interesting situation. Most average workers don’t get to have their life’s savings utilized and leveraged by the businesses in which they work. Does that make sense – especially in a COVID Economy?
Then we have the professional investor (we’ll not include retirees because for most they are saving for life after work). Sometimes called ‘equity-eaters’ as the practice of making money from money through gambling on the ups and downs of mainly delusional stockmarkets isn’t focused on the equity of a listed company, but more on the equity made in buying and selling shares. This is also carried out with very exotic ‘card games’ that even players don’t understand. And where a Wolf of Wall Street and others in the game were allowed to go rogue and generate Global Financial Crisis.
When those who make money from money with little real value-adding that drives the wheels of small to medium business, household need and homemaking and keeping; when they are richer than the whole, we have a congested and constrained economic system.
The leaders of our financial services industry must temper their reliance on extraordinary salaries and move their values to really care for what their clients need and want. They must put people back into the process of decision-making. The algorithms that drive a decision as to whether a person or business can be trusted may produce some artificial information, but is the knowledge of people that must make the decision. People placed in a ‘bag of investments’ and sold into a gamble of win some, lose some, is not sustainable and has already damaged too many lives and futures to the point many ask – what is the point?
The CDOs of 2006 to 2008 are an example of a financial services industry gone MAD. The CDO (Collateralized Debt Obligation) has mostly died. But the act of bundling the good with the bad debt and selling them as AAA securities hasn’t. The MADness of the CDO has become the idiocy of the CLO – Collateralized Loan Obligation. The CLO is a gamble on bundling loans to stressed businesses and selling them as AAA securities. The reason that they are supposedly AAA is that the loans are bundled together to contain diverse industry sectors, and no one would believe that all industry sectors would ever be impacted at the same time. Hence, they guarantee a safe return. WRONG! A pandemic has bought that theory undone and now we have around $1.25 TRILLION (2018) circulating in the global economy just waiting for their CDO moment (note the loan market in 2018 was around $750 Billion).
Their bundling and selling is criminal and only excused in the CDO crisis because the behemoth that the financial services industry has become is now ‘too big to fail’. The damage this thinking causes is like saying the Coronavirus is too big to deal with. But we did. And in the COVID Economy we must deal with our reliance on ‘money making money’ and get back to valuing the work of people and making profit through productivity.
Money must be liberated to flow to and through all people so that the majority can gain and keep their self-respect and self-sustenance above the on-going financial accumulation of the few. If this doesn’t happen, we risk the angry voices and actions of the anxiety laden debt holders of 2019 that will only grow and become a roar of revolution that no-one wants, or will benefit.
All the above is a 10-minute read or listen on whatever platform you’re on.
It’s around 2,000 words battling with the trillion published in the last 24 hours, and worth nothing unless this thinking has engaged, aligned and committed you to act.
The COVID Economy is real. There is no going back to the past. That is fact.
Equally, there is a way forward that only you can find, with the support of others. Yes, we are all in this together, and collaboration is critical.
Your way forward starts with the question: what do you value? This question is personal and best held as a mirror as you make every decision from here on. Values are like beauty. Many times you can’t explain why something is beautiful for you, but you know when you feel it and reveal it. So, maybe the answer isn’t as important as this question - held up as THE filter for every decision you make?
The COVID Economy opens a pandora’s box of possibility. It only takes a small step out of disorientation to reorient to the opportunities. We have named a few. But imagine what else is possible when you and others ask the question: What is my and our way forward in the COVID Economy?
We believe that immediate action by our innovators is critical. Seeking quick-wins now and keeping a sustainable future in sight is important to achieving breakthroughs and gathering momentum into the later months of 2020.
To assist, we suggest a COVID Economy Action Plan:
- Form a team that will work together to develop a COVID Economy Action Plan.
- Identify and align with your team how your organization is placed within the COVID Economy.
- In the above context, identify the opportunities you can actively pursue and risks that must be mitigated.
- Use this information to immediately implement strategy to gain quick-wins and provide direction for your long-term future.
This action plan is not just about the actions you took in the early stages of COVID and will never be a one-time strategy. As the COVID Economy opens, the conditions of its existence will change and your strategy must be agile enough to morph to leverage disruption to generate sustainable value in an on-going manner.
The downside? As previously laid out, there will be challenges, risks, problems, complexity, pain, lack of confidence, greed, hunger and the occasional ‘barbarian backlash’. Much of that will combine and endeavour to thwart early action, push-back to the past, and resent the loss of power; power now passed to others better equipped to create the future.
The human condition disturbed can open up a multifarious array of the good, the bad and the ugly. That and the issues we face must be understood and dealt with, but never able to stop those intent on finding their way forward.
So, what will you do? By when? To find your way forward in the COVID Economy and beyond…