Surface Ripples

COVID-19: How We Got Here

COVID-19 has been the first truly global pandemic for 100 years.  Those who experienced the “Spanish ‘flu” of 1918 – 1920 will mostly have passed away.  Closely related was the 2009 “Swine Flu” pandemic, which was easy to spot as those who had it displayed symptoms immediately.  The current virus appears to spread from close physical proximity and, unlike the previous SARS virus of 2003, spreads easily, faster and those infected show no symptoms whilst at their most contagious.  

The virus is still with us and shows no signs of abating soon.  Governments have tried “lockdowns”, “circuit-breakers”, “self-isolation” and testing at all levels.  

This month, I’ve looked at  why change may not be as easy as we think and how we might need to change our ways.  This post is a review of how we got to where we are not, based on an excellent article that appeared in the Economist Magazine on 10 October 2020.

The first point is that the spread of COVID happened very quickly.   Thanks to cheap flights and the outbreak of the virus at Lunar New Year when thousands of Chinese traditionally return home to spend the holiday with their families, as well as the end of other seasonal holidays in the West, it was easy for it to move very quickly from its epicentre to the outside world.

The next point is that different countries are recovering at different rates.  China, the so-called epicentre of the virus, has experienced a “V-shaped” recovery thanks to locking down its cities (particularly Wuhan) and imposing Draconian movement control measures.  As at the date of this post, it is running at some 86,000 cases of infection (officially) and a mortality rate of just over 5%, compared to the USA with nearly 8.4 million infections and mortality rates of under 3%, or the UK with 722,000 infections and a 6% mortality rate.

Secondly, thanks to the different rates of recovery, we can expect to see significant differences between countries battling the virus – differences which could change the economic face of the world.  China is being described as the world’s leading trading nation.  Where does that leave the US and others with service-driven economies?  Factories operate more easily under social distancing conditions than do service businesses where face-to-face contact is common (restaurants and hotels, for example). China is “the world’s factory”, meaning its economy is manufacturing-focused vs (say) the UK with its heavy reliance on services.  Some countries with well-developed social “safety nets” have been able to react in different ways to (say) China or India, where people need to work (thereby increasing the risk of transmission), or else….

In my previous post, I commented on the importance of how governments respond in the face of the virus.  Financial stimuli have been one of the main weapons, with millions being spent on providing salary “lifelines”.  The bigger question is, what do they do about the economic changes caused by the destruction wrought by lockdowns?

So, the third point is that our economies have been geared to a different (“social”) way of doing things.  We can expect more of the work currently “offshored” to other countries to be “on shored” to preserve the ability to manufacture essential PPE or other commodities without relying on others.   Our previous reliance on “manual” processes may be replaced by more digital systems.  Online banking, payments and buying have seen huge increases.  

Countries with well-developed social “safety nets” have been able to react in different ways to those without.  This has resulted in people losing livelihoods and left with no means of support.  It also means that the free movement of people and ideas that sustained innovation and raised living standards may change.

Some countries rely on industries that may disappear thanks to the virus and its impact on social distancing.  Although some may be able to support the existing workforce with various “furlough” schemes, they may simply be propping up sectors that are no longer relevant but are seen as “national champions”.

In all, the structure of the global world economy has been just as complicit (albeit unwittingly) in the spread of the coronavirus as those who didn’t take it seriously.

I’ve spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My website  provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

Labels: Crisis Management, Leadership, Social, Strategy

posted by William Martin @ 13:36