Business after Corona

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I am delighted to share a brilliant article by Friend of the ILF, Designer, Thinker & Visionary Mario Gagliardi with you here which he posted on his website 16th March 2020. Thanks Mario for letting me place it here.

 

Fear and loathing

The media and politicians have done their best to create insecurity and fear in the general population, because it guarantees clicks and provides an excellent opportunity for politicians to show decisiveness and accrue credibility for the next elections. The most popular, because easiest to implement, measure is to decree restrictions on the movement of people. A new study published in Science (M. Chinazzi et al, The effect of travel restrictions on the spread of the 2019 novel coronavirus outbreak) shows that travel restrictions merely postpone an outbreak. This benefits politicians, as travel bans and curfews are felt as “something is being done”, but also damages the economy.

Corona, culture and knowledge

A better example is South Korea, which did not impose restrictions on the freedom of movement, but tested and tracked effectively to find clusters and contain infected patients. In the meanwhile, South Korea’s new infections dropped to its lowest level in 3 weeks, and business starts getting back to normal.

Interestingly, both the negative effects – the spread of the virus – and the positive effects – the effective response to the virus – stem from two sides of the same coin. In a society where collective action is valued, measures depending on the cooperation of people can be established quickly and effectively. On the flipside, this also makes it possible that obsecure sects establish their own rules, and indeed they largely contributed to spread the virus in Korea.

Knowledge is the deciding factor. If every single infected person is known, they can be isolated and treated before they infect others, and the epidemic is over in a matter of weeks. As long as we only have fractional knowledge of who is infected, social distancing reduces the chance of the virus to spread. China combined a lockdown with testing and is getting back to business after 6 weeks.

Also in Singapore, the winning strategy is to test and track. Testing kits were rapidly developed and deployed to ports of entry. Within three hours, the test shows an infection. Within a day, the chain of transmission can be tracked.

Corona Superstar: The media virus

The nearly exlusive attention to the Corona virus in the media gives people the impression that it is the largest and only current threat to their lives. But there are many more threats out there which get hardly any mention in the media. The regular flu, for instance, has already killed 80.000 people worldwide this year, while the Corona virus is so far responsible for a tenth of that number, 8.000 people. Air pollution kills one thousand times more people than Corona – about 8 million people die prematurely from polluted air every year. Corona will contribute to lower that number, as people stop travelling and greenhouse gas emissions are dropping.

Toilet paper, pasta and ammo

In societies based on overconsumption, people react to perceived threats through irrational overconsumption. After panic buying sprees in supermarkets across Europe, toilet paper and pasta was sold out. In the United States, the sales of firearms and ammunition is surging.

The future

The examples of China and South Korea show that the virus can be contained within one to two months. Business is again picking up there, but the experiences we have now – fear, panic buying, being locked into cruise ships or homes, being stranded in the middle of nowhere due to sudden border closures – should urge us to rethink behaviours and business models which became commonplace within the last 10 years.

In the example of China, people are back at their workplaces, but civil transportation is still at half the volume of the years before, indicating that also after Corona, people work more from home.

The end of mass tourism

Much of greenhouse gas is attributable to emissions from transport. Mass tourism, enabled by discount airlines and all-inclusive cruises, contributes to greenhouse gas. The business model of low cost airlines depends on crowded planes, and also cruise operators depend on full ships to be able to offer low prices. But the age of polluting mass tourism might be over. Currently, the stocks of cruise liners and airlines are down 50% and more.

After experiencing a lockdown, people will want to travel again, but with more awareness to quality. Tourism in the future will depend more on high-end offerings guaranteeing safety, hygiene, relaxation and comfort both in terms of transport and in terms of places to stay. Travelling less, but better will also be an important contribution to reduce climate change. Hotels already at the high end are best prepared for the time after Corona, while places in the middle ground should switch focus from high volume business for mass tourism to better services by providing stress-free, hygienic and safe environments.

The surge of online services

The negative effects of lockdowns hit a select group of businesses: Brick-and-mortar shops and restaurants are ordered to close, and the entertainment sector as theatre performances and concerts get postponed.

For entertainment and the performing arts, performances will increasingly be replaced by streaming live events. Retail will shift further to online shopping and delivery services. Currently, Amazon is hiring 100,000 extra staff to handle demand. Also online learning will see a sharply increased use – schools which had no e-learning program in place and are forced to close are now “learning their lesson”.

A new kind of workplace

Businesses will increasingly switch to teleworking also after Corona. This has several benefits including reduced emissions from commutes to offices, reduced costs for office rentals, and the opportunity to create more flexible working hours. The experiences made now will make remote working a more established practice than before.

Time to think

Through lockdowns and quarantines, many people in China had, and in the West now have, more time on their hands. Instead of reinforcing their primal fears through the news, they could also slow down, enjoy the new silence on the streets, and perhaps consider what really is necessary.

Instead of every country closing its borders to every other country, should we instead switch to cooperation and transparency? Are cheap, fast vacations through crowded airports, on crowded planes, to crowded sightseeing spots really such a good idea, or should we, in the future, better consider our health, the health of others and the health of our environment?

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