Stock market winners signal shape of new economy
Several weeks into the global lockdown, many countries are grappling with strategies to exit. In the UK, where fatalities are now at more than 30,000, about 70% of Brits favour maintaining the lockdown, despite damage to the economy.
This is partly because when Brits look at how many other countries — such as New Zealand, Germany and South Korea — have managed to flatten the curve, their government’s leadership and handling of the coronavirus crisis seems shambolic by comparison. Most Brits fear the exit strategy will be similarly disastrous.
But it is not just in the UK where exit strategies top the agenda. Economists, scientists, health ministries and policymakers worldwide are grappling with the puzzle of how to get the global economy moving without accelerating infections and deaths or, worse, risking a second possibly more deadly wave.
Hopes are resting on a groundbreaking vaccine, possibly in conjunction with mass enrolment into immunity passport schemes and contact tracing apps.
But could it be that the routes out of lockdown — and there are several — are already plain to see if only we would look and seize the opportunity to reconfigure our world anew?
We certainly shouldn’t pretend the model we had before, of global warming, inequality, inefficiency, presenteeism and overconsumption, was an economy that worked for everyone.
This pandemic is largely a consequence of widespread discretionary travel alongside a disregard for nature, which has passed diseases from animals to humans because we continue to encroach on natural habitats and destroy biodiversity.
So what can be done, and how can we rebuild differently?
The stock market, volatile as it has been, gives us several clues. Warren Buffett has dumped aviation stocks. Oil majors have shown significant vulnerabilities. But tech, health care and essential retail — especially companies such as Amazon and Zoom — are thriving in a world of deliveries and webinars.
Further, many workers in formal employment have found lockdown beneficial to their mental and physical wellbeing.
If social distancing remains in place for the next 12 months, the willingness of workers who can do so to work from home, or stagger their work days and be productive while doing so, will be crucial or transport systems and workplaces will be unsafe.
In the UK, legislating the right to work from home is now being discussed for some of these reasons.
Employment figures could rebound if jobs were shared or more people worked fewer hours. Several companies experimented with four-day weeks before the pandemic, with impressive effects on productivity and wellbeing.
Next, the amount of fiscal stimulus unleashed by governments globally to support wages, as well as small and medium enterprises, has shown that the money taps can be turned on when needed. This has only strengthened arguments that a universal basic income is affordable and essential.
A universal wage scheme could top up the wages of an increased number of people in employment on lower wages, while providing a safety net for the unemployed.
Seeing our loved ones and enjoying life with travel and hospitality can also return, but it depends on decisions we make collectively now, as innovation professor Gary Pisano contends. As individuals, we should wash our hands, observe social distancing and wear masks fastidiously. Business leaders could dare to think differently about productivity and hygiene in the workplace.
These have been tough times, but with optimism and collaboration, an inclusive, sustainable, digital global economy is already within touching distance.
● Masie, a former senior editor of the Financial Mail, is chief strategist at IC Publications in London and a fellow of the Wits School of Governance.