Alexandra Marsanu is a Ward Chair at Holborn and St Pancras Conservatives and Deputy Chair for London at Conservative Young Women. She works professionally as a strategy consultant.
There is no doubt that the unprecedented health crisis will have a massive impact for the months and years to come. From heart-breaking loss of life to more than nine million workers on furlough to increasing waves of layoffs and business closures. The numbers show a grim story unfolding, and the economic one has only just begun.
That doesn’t mean however, that we should become completely paralysed by the doom and gloom. Yes, difficult times lie ahead. And yes, a pessimist or cautious take tends to catch the public mind much more easily than an enthusiastic, potentially reckless cheerleader. But as history has shown time and time again, you can always bet on Britain’s strength to survive and turn each challenge into an opportunity. And given the looming economic shifts, a re-think of how businesses are run and what skills are needed for the post-covid economy should start sooner rather than later.
The effects of covid-19 have certainly started laying out the breadcrumbs for the next waves of innovation. ‘Just-in-time’ production and global supply chains have proven vulnerable to disruption. Empty high-streets show an already struggling retail industry in need of massive transformation. Working from home has been more successful than expected as many office workers are reluctant to get back to the Pret sandwich diet or stand on a crowded tube.
A need for change on how we do things is slowly but surely emerging. Take manufacturing and supply chains. Could the flimsy global supply chains experienced in the past few months signify a need for bringing it back home? The shift to the services industry led to manufacturing accounting for just 8.7 per cent of economic output this year, down from 15 per cent in the 1990s. And given the allure of high-paying professional services or finance jobs, this is not surprising.
But as Elon Musk put it best “someone needs to do the real work”. If we don’t produce anything we don’t have anything and empty supermarket shelves and the PPE crisis back in March certainly proved that. A domestic production of basic necessities such as food, medicine and PPE, is not a bad thing to have in times of crisis. A need to speed up decarbonisation can be catalysed by investing in new technologies in such as energy storage, cheaper electric vehicles or small modular nuclear reactors. Automation, artificial intelligence and 3D printing can make advanced manufacturing attractive and help tackle the reshoring headwinds.
The success of remote working is another interesting trend to explore. Ghostly streets in Bank or Canary Wharf flag that Tramsport for London, lunch spots and office rents are in deep trouble. Without workers or tourists roaming the streets some may need to shut down for good. But while some ways of working may come back once a vaccine is ready, technology has proven that many don’t need to. Could this offer interesting opportunities in revitalising the dying high streets in small towns with the same fitness or eat-out facilities you may find in Central London? Or could this finally incentivise many more companies to not concentrate their offices in one location and move to a hub/co-working approach? A hybrid work from home model may be the future.
But given the uncertainty of the economic recovery, how can we know for sure what will change and what will stick? Nassim Taleb offers an intriguing thought in his book on the so-called black swan events:
“The reason free markets work is that they allow people to be lucky, thanks to aggressive trial and error.”
And why not take this approach?
Your typical entrepreneur seems to use this best. A new idea is tried out. The mistakes are learnt from. It is adapted. That tends to lead to better results than massive costly projects. New policies could be tested through small experiments and local community feedback. As jobs become more dispersed, a small town could try out a restructuring of its high street to become a place for entertainment and public services. Local community feedback can easily be gathered. And if it works others will quickly adopt it.
Further Education colleges and work placements can be another quick way to try out a job change and re-skill for the new economy. Instead of having millions of people compete for jobs which may no longer exist, short online courses could be used to learn new things. Digital skills can be learned and tested over a matter of weeks. Or different career paths can be tested out through re-training and short placements for career changers similar to Sunak’s Kick Start Scheme aimed at 16-24-year-olds.
The uncertainty may look numbing, but opportunities will become apparent once the crisis settles and habits change. Now is the time to tinker as much as possible with new ideas. As researchers work day and night to find a vaccine and the furlough scheme puts the breaks on an economic crash, we need to make sure that we don’t emerge unprepared on the other side.