We may be living in unprecedented times, at least in recent history. Since the start of the COVID-19 pandemic, we’ve seen stock prices around the world freefall. As of the beginning of April, the Dow is down 24% since January. The Nikkei average is down 22%.
Businesses across the globe are essentially frozen, either locked down, closed, or unable to sustain their workforce. Governments are hemorrhaging cash in an effort to stave off the worst effects of a looming recession. Death tolls as a result of the virus could be desperately high in the U.S. and other hard-hit countries. The level of uncertainty surrounding the virus, its spread, and its impact is devastating markets everywhere.
The ultimate cost will largely depend on how long industry and nations have to remain closed for business. Whether we’re heading into a recession isn’t in question. It’s likely already beginning. The question is how deep it will be, and how long it will take for economies to dig themselves out.
What’s certain is that a great number of small to mid-sized businesses won’t have the resources necessary to withstand an extended shutdown, and others will fold in the inevitable aftermath. This represents one of the largest tragedies in recent history. Now more than ever, businesses need to innovate in order to prosper and survive.
It’s difficult, but in order to speed recovery in the post-COVID-19 world that’s coming, we’ll be forced to let go of what was lost and focus on new business creation.
To some degree, this will happen naturally. Recessions and other financial calamities have a tendency to foster innovation. Consider it forced creative destruction. Dominant industries that might be standing in the way of new ideas are removed, clearing the path for new ways forward.
Changing circumstances also close some doors while opening others. After the U.S. financial crisis in 2008 thrift was the order of the day. Uber seized on the need for ride-sharing and created an entirely new industry.
In many ways, government programs intended to prop up existing industries may hamper this process. A metered response is in order. Programs ought to support critical industries that will help regrow the economy while leaving others to the natural course of death, rebirth, and renewal.
The current pandemic will end in time, but its social repercussions will likely echo years into the future.
Social distancing practices will ingrain themselves in a populace wary of potential new waves of infection. Remote work, once eschewed by all but the hippest, tech-savvy companies may become the new normal. This will require innovative software and hardware solutions to keep the full range of industries operating efficiently.
Businesses that bring customers into close proximity, like airlines, entertainment venues, and restaurants and bars may have to rethink the way they deliver their services. Forward-thinking companies will need to rise to help keep these businesses solvent.
We’ll also likely see major shifts in the healthcare industry, with doctors and hospitals dramatically ramping up the current shift to remotely-delivered medicine. How this may develop is hard to predict, but it will certainly be fertile ground for innovation.
In the post-corona world, new ideas will drive our recovery, pushed by social changes while also forcing change. If we get the mix right, this tragedy could create a global renaissance that will raise all boats and improve lives around the planet. Only time will tell.
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