If history has taught us anything, it’s taught us a very simple lesson: tough times always end. Every time the world felt a pandemic, a booming effect follows. Look at the industrial revolution that was followed by the cholera pandemic in 1830s. In the 1920s, the Spanish Flu was followed by an increase in household spending and employment. So what does this mean for us?
COVID is rather similar. Socially, they are all global health crises impacting lives and livelihoods. They also change the way people behave for life, work, and play. Economically they lead to a financial crunch, declining growth or GDP. Politically, they challenge the way the government responds and cooperation between countries in pursuit of a global goal.
In some areas, the economic decline came on suddenly and hit rather hard. In all areas, it gained momentum as people and businesses realised that it was more than just a speed bump. Today, many people are still feeling the effects of losing jobs and economic prospects. In the US alone, 10 million people are still unemployed. On the flip side, many companies are starting to resume business activities and have innovated in how they approach the market. So this means that the speed of the recovery could be equal to the speed of the decline according to Goldman Sachs. “Whether it’s a boom or not, I do think it’s a V-shaped recovery,” said Jan Hatzius, Goldman’s chief economist.
Being stuck at home for those who are gainfully employed has reduced spending options while creating more time for online shopping. Global e-commerce has jumped to 26.7 trillion USD in May 2021. In the absence of dining out, socialising, and travelling, some people are seeing a substantial increase in savings or discretionary spending. Once restrictions have eased, we’re seeing that consumers are excited to rejoin the world and spend in traditional fashions with renewed enthusiasm. This will ensure the spending spree and re-investment back into the economy stays steady.
Major disruption always leads to innovation. When faced with finding new ways to do everything from professional to personal lives, the world must respond with innovation. The pandemic has accelerated our technological innovation in so many ways. For example, telemedicine and remote diagnosis are becoming common practice. The treatment and preventative medicine can now start with a quick remote assessment to ensure a performant care and foster safety in the community. Digital health solutions can now be conducted without national or global travel. If remote culture was already infused in the business world, it has now entered the medical world too.
“Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next,” wrote Arundhati Roy in her novel The Pandemic Is a Portal. This is pivotal moment in time where we are saying goodbye to our old ways of doing things. It can be a bit uncomfortable and filled with uncertainty, but we are opening the door to a new and better way of life.
The world has changed forever and is still in the midst of COVID-driven change. We haven’t written the future yet and the next chapter is shaping up nicely. As we embrace a different way of life, there will be unexpected economic benefits, professional benefits, and personal benefits. And through it all, we’ve discovered a level of resilience that puts us in a stronger position to face whatever challenge comes next. Soon this pandemic will become just another lesson from the past.