Here’s a big statement: From a business and economic point of view, COVID-19 represents the most transformative shock of our lifetimes.
It is bigger than 9/11, bigger than the Great Recession and bigger than the 1987 stock market crash – in fact bigger than all three combined. It will change consumer behavior, and therefore the business world, forever.
Really? Yes, really. Consider these statistics:
- Goldman Sachs is predicting GDP contraction of over 30%(!) in Q2 this year.
- Global unemployment has gone from record lows, to the highest level for decades, arguably since the Great Depression of the 1930s.
- In the US alone, 17 million people registered for unemployment benefits in the past three weeks. There is talk of 30% unemployment in the US by summer.
- Even in China, unemployment is officially over 6%, the highest since records have been kept (and many think this number is hugely understated).
- One-third of the global population is on some kind of government-mandated lockdown or stay-at-home order.
- The seven-day moving average for commercial flights, as tracked by Flightradar24.com, has fallen 71% over the last 30 days from 100,000 to 29,000 flights per day.
So far, with strong mitigation measures and generally excellent civilian compliance, “only” 115,000 people are known to have died from COVID-19. Every death is an awful tragedy, but an Imperial College of London report says without the intense government interventions we have seen, COVID-19 could infect 7 billion people (90% of the world’s population) and could have killed 40 million just this year.
So, it seems until we have a vaccine (2021 at the earliest) or some serious herd immunity (definitely not happening in 2020), we only have two options:
- Disregard the death toll, and start re-opening the world’s economies in a big way.
- Keep at least some mitigation actions in place in order to save lives, and accept the tanking of the global economy.
There is no choice. Governments and society must, and will, choose the latter.
There is no quick recovery. Talk of re-opening in May with a V-shaped bounce seems far-fetched. Sure, there will be tentative steps, even significant steps, but as soon as the death toll creeps up, governments will rightly bolt the door shut.
Previous in series: POST-COVID1: Introducing our new “Post Covid” series
Next in series: POST-COVID3: The four categories of businesses affected by COVID-19
Click here for the full POST-COVID Series list of articles.
RelatedPosts
