The COVID-19 pandemic is being fought around the world while the economy is currently in a palliative care unit. It is hard to determine when we can return to normal, but it largely depends on steps we are taking now to warrant such a return. We need a plan that can be communicated clearly to the public. So, can we open the economy? Here is how to START IT UP in 8 steps.
Social distancing must continue to keep the basic reproductive rate of the virus below 1 until a vaccine/medicine is found. Face coverings should be made mandatory, but a few lines of cloth are sufficient enough for the public. The concern over further shortage of NHS personal protective equipment is a valid one. Therefore, the sale of masks needed for the NHS could be banned nationwide and made illegal for the time of the pandemic.
Test, test, test. This is arguably the most challenging part, yet efforts need to be made to carry it out on a wide scale. The lockdown should be used to organise tests, scale-up testing facilities, employ and train enough workforce for this operation. The government’s target is to carry out 100,000 tests by the end of April. This will not only create new jobs but will also help to re-open the whole regions of the country. It is important, therefore, that testing in the community is carried out strategically not at random.
Automation is the future so we may well go ahead and increase our efforts right away. Imagine that all the manufacturing and most of the economy was automated. We could quarantine ourselves without killing the economy. Grants, not loans, should be offered to companies which already have the technology and wants to roll it out. Further grants and loans should be made available for research and development.
Remote work is here to stay. Micromanagement is counterproductive in the long run and kills development, productivity, and progress. As a result, micromanaged businesses waste money on unproductive workers and pointless micromanagers. Any such business will be far better of in the medium to long term by replacing such employees with a self-driven individual while preventing its cash-flow in the short term.
People are responsible adults at home. Why do we suddenly transform them into adolescents with no freedom when they reach the workplace?
Ricardo Semler ‘Maverick!‘
Track the spread. There is a lot of arguments in favour of contact-tracing. Economically speaking this is the number two priority. To control the pandemic purely on physical testing is largely unrealistic. To really keep the rains at the spread of the disease the same people would need to ideally be tested weekly. In a country like the UK, that would mean tens of million tests a week. Even Germany, the European leader in testing, tries to scale their abilities to 4.5 million tests a week. That is roughly 5% of its population. This only could work on its own under heavy and very restrictive lockdown. It still would require 12 weeks to test 60% of the population and then people should be re-tested to rule out the possibility for a second peak. If the virus would re-emerge in the winter, without an app, the whole exercise would have to be repeated all over again. Digital passports are further logical extension to tracking and tracing as it will allow opening these parts of the economy where social distancing is impossible, such as hospitality, public transport, and air travel. With a properly working app restraining new COVID-19 cases will be relatively easy and such chain of infection can be traced and broken down with a simple notification. Manual data surveying will have to be carried out as well which will further expand job vacancies.
Information Technology is already advanced enough to enable the population to work and shop remotely. There are a lot of businesses that could easily move into virtual reality and benefit from it. Many businesses have simply stopped and depend largely on handouts from the government in a hope this will get them through until everything returns to normal. The economy, however, is expected to contract significantly and people will simply feel less obliged to pay for services that they have learned to live without during this lockdown. It takes about 21 days to break or form a habit. Even if new online service will generate far less revenue for now, it may help to retain customers in the future and generate additional profit when the economy is back on its feet.
Universal Basic Income solution is largely non-existent in the media. While some can see it as the future only when the world becomes fully automated, the poverty levels and the real wage are simply ignored. No doubt, this is an enormous fiscal strain on any government’s budget. Still, UBI would replace all available benefits there currently are. The whole administration behind the benefits system would no longer be needed. The overall cost of dealings with poverty would also fall. We would not need any minimum wage legislation as this would be established by the market itself. From a long-term perspective, people’ wellbeing and both physical and mental health would increase. Depression and anxiety have become social pandemics, yet no employers take them seriously enough to realise huge profit losses caused by lower productivity, creativity, ability to problem-solve or simply to care.
Productivity is the last piece of the puzzle. Globalisation and economies of scale became shortcuts to profit maximisation that lead to the creation of inflated bubbles, inequality and mass-produce of items simply to sell, not to last. Consumerism can only last with ever-growing and expanding economies which have been proven to be unrealistic by this pandemic. Therefore, productivity should not be defined by profit maximisation but by sustainability.
The return to normal as we know it will not be possible. We can, however, go back and try to rebuild our old imperfect economy. Alternatively, we can embrace this change and switch to post-pandemic sustainable economics which will bring greater benefits for us all and our environment. We have a choice.