Crisis

The Health of Nations – Economy, Society and your Company in a (post-) Corona World

Around us is the most terrifying pandemic since the Spanish Flu a century ago. Ahead of us is the most massive economic downturn since the Great Depression 90 years ago. Economists debate about the best metaphor for today´s situation: Branko Milanovic opts for World War II, Frances Coppola for the Irish Famine of 1848. Phew. And still no end of the Corona Crisis in sight: Even if numbers start to shrink in Europe because of the harsh lockdown measures, the USA is still on an exponential trajectory. 

But at least on paper, the first exit strategies emerge. We here are especially enthusiastic about Thomas Pueyo´s The Hammer and The Dance – the best piece available about how life and society will turn out (übrigens auch auf Deutsch).

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The Hammer and the Dance

After a sharp and short lockdown period of 3 to 7 weeks (The Hammer), we could enter in a long and winding process of adjusting to a pandemic threat, The Dance: “Depending on how cases evolve, we will need to tighten up social distancing measures or we will be able to release them. That is a dance of measures between getting our lives back on track and spreading the disease, one of economy vs. healthcare.” Other than the Hammer, the Dance is long. Very long, and (perhaps) never-ending. Because: 

  1. Even in the most Corona-affected regions like Wuhan or Lombardy, there are still more than 99% of the population not counted as infected. And that means: most likely without immunity. Yes, someday a vaccine will help to make us immune. But, also yes, the virus will mutate to new forms that jump over the immunity barrier. So we might have to deal with this monster for a long time.
  2. Corona is not the only monster waiting out there. Pandemics may come from new viruses or antibiotic-resistant bacteria. They may be more or less deadly, and more or less contagious, but they have the potential to spread globally. And it should be our job to redesign our systems in a way that makes them less vulnerable and more resilient. 
  3. That´s equally true for our digital systems. The software around us and in our devices has done a great job to keep our companies and us afloat during the lockdown, and they will continue to do so. But the more our lives depend on digital systems, the more important it becomes to secure us against contagion and breakdown.

So we as society, we as humanity need to find a new balance. A balance between fighting contagion on the one side and living a life that is worth living on the other side. For US tech philosopher Venkatesh Rao it´s a great chance: “This is the generic resilience debate that’s long overdue, via a “case study” that’s somewhere between a fire drill and the real Shit-Hits-The-Fan thing. This is almost like the world itself is being administered a vaccine in the form of a partially deactivated crisis trigger.”

That’s what Thomas Pueyo calls “The Dance”. You (= the government) give more freedom, if it deems appropriate, and cut it back if it gets too risky. You (= the society) enjoy soccer this season and eSports the next season. And you (= the individuum) decide which risks you want to take for how much fun. These decisions are based a bit on your assessment, and a bit nudged or coerced by friends, family, and police.

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Corona Transmission Rate

How free our decisions will be and how pleasant our lives depends mainly on our R-value. R, as most of you may have learned by now, is the measure for the contagiousness of the virus: How many persons will get infected by one carrier of the virus? In our usual way of life, the R-value of the coronavirus is roundabout 2,5, and most of it happens before the first symptoms are felt: 10 carriers lead to 25 new infections, and they to 62, to 156, to 390 to 976, and so on exponentially.

With a lockdown in Wuhan style, the transmission rate can be brought down to about 0,3: 1000 carriers lead to 300 new infections, and they to 90, and they to 27 and they to 8 and they to 2 and over. 

That´s great to hammer down infections and deaths, but that´s not a society we want to live in. So to stay in balance, we have to adapt just enough to keep R below 1 – and to live the best possible life below that threshold. It´s not about minimizing R; it´s about optimizing R.

Now that´s precisely the point where you (= the economy) and you (= the industry) and you (= the company) and you (= dear CxO, dear Head of x, dear x Manager) get into the game. Because this will be part of your job. Your products, your processes, your technologies, your business models should participate in the task to optimize R.

The less risk of spreading a disease you produce, the more leeway the society has to find a New Normal worth living.

This is, admittedly, a new challenge. It´s a different game than maximizing profit or efficiency. It´s a game neither predicted by Adam Smith nor by Milton Friedman: You should strive for the best results for your coffers, the highest value for your shareholders. Hey, Adam Smith called it “The Wealth of Nations”, not “The Health of Nations”! 

Yes, that’s right. But if you insist on “Wealth, not Health” in the post-Corona environment, you´re out. Things change – we better get used to it.

How do you optimize R? How do you reduce contagion risk? There are some low-hanging fruits – like installing touch-free doors at the office. Or, why not?, developing a completely “touch-free built environment”, as Venkatesh Rao suggests?

And then there is the main challenge: How to R-design your value chain? When you are, say, a delivery service, how do you reduce the risk that your drivers get infected by your customers – and vice versa? When you are a manufacturer, can you track for all of your raw materials and components where they really come from – just in case something goes terribly wrong? Maybe you clean and filter the air on the factory floor – but what about the air in the changing rooms and the shower? Lots of questions to ask, lots of problems to solve.

We at Beam love problems – we wouldn’t exist without them. And we love to dive deep into them, check and re-check possible, impossible and viable solutions and turn them into strategies and start-ups – that’s our job. A similar deep-dive approach may be needed to bring your company into the post-Corona world. We recommend that you establish a task force for it; you could call it “The R team”. R like the transmission rate. R like resilience.

For this task, there are no role-models to rely on. No-one ever thought about retrofitting capitalism to reduce contagiousness. So there´s uncharted territory ahead of you. 

That´s the bad news. And now the good news: There is something ahead of you. A future.