We can imagine four different near futures. Steve Wells – global futurist, keynote speaker, and COO of Fast Future
What is the mechanism of the pandemic crisis? What are the options for reducing losses?
I think there are two issues here:
- At the macro level, many countries initially handled the pandemic as a health crisis. It quickly become an economic crisis as lockdowns depressed economic activity and governments were forced into rapidly developing social and enterprise support programs. Finally, governments realised it was a societal crisis where tough decisions needed to be made to balance health, economic, and social concerns.
- It remains to be seen how any losses accrued during the crisis will be off-set by future growth. The timing associated with reopening of economies will be critical in that process and many businesses may not be able to survive given a drastically lower cash flow, of course.
Which sectors of the economy are most affected and which are still to experience the crisis in the future?
Initially, the economic burden has fallen on those parts of the economy that rely on people coming together either socially (bars, restaurants), to use personal services (hairdressers), or travel and leisure (airlines, hotels). While some areas of retail (grocery for example) have been able to pivot their business toward home delivery and click and collect services, others have been either slower to do so or unable. In the UK there was already strong trend towards on-line retail but the pandemic has driven even more business through digital channels. That business looks likely to remain digital. Other businesses will have to invest in the switch too. So much economic activity will rely on the success or otherwise of vaccination programs given that throughout 2020, the only effective way to manage the spread of the virus has been social distancing measures.
What is the effectiveness of the anti-crisis packages implemented by individual states?
I can’t really comment on the success or otherwise in other countries. In the UK, it depends which side of the political divide one sits. While the Government promotes the UK worker furlough schemes and business support grants and loans as among the most generous schemes in the world, the opposition Labour party (socialist) would like to see more public money spent. The question remains, how will the economic impact packages ultimately be funded? Austerity? Public borrowing? Taxation rises? Post Brexit economic growth? All of the above?
Which parts of the world are most affected? Which countries, considering their debt, will face bankruptcy?
I can’t really comment on that other than to say that arguably, poorer countries will suffer for longer with more fragile economies, an inability to access vaccines and a lack of infrastructure to administer them, with the possibility of some of them being “left behind” as the world moves on. Could these countries become “abandoned” by the rest of the world and suffer a break down in civil order?
Will the crisis caused by the epidemic accelerate the transition of the global economy towards a more innovative model?
There’s a saying in English that “necessity is the mother of invention” and what we have started to witness through the pandemic is the acceleration of a number of trends that were already visible; things like accelerating growth of on line retail, increasing home and remote working, the growth of digital communication and collaboration platforms, growth of automation technologies like robotics, AI and Machine Learning. But the pandemic also challenged international supply chains which may result in increasing reliance on local sourcing either within country states or within trade blocks. A global resolution to current varying travel restrictions around the world will also be crucial in re-energising globalization.
Having said all that, the critical elements of moving into a reimagined future is mindset and new leadership norms. It was Einstein who said, “Insanity is doing the same thing over and over again and expecting different results,” which I frame as, “If you always do what you always did, you’ll always only get what you always got, except the world moves on.” So an innovation mindset that challenges the status quo will be increasingly important. In leadership, it is critical that we focus on digital literacy, foresight and scenario thinking, use facilitate cycles of experimentation and learning, entrepreneurship, building a tolerance to uncertainty and complexity, engaging and communicating with clarity.
Is it possible to assess the state of the economy in the world today? Can we construct plausible scenarios for 2021?
Scenarios are a wonderful way for us to consider different plausible and potential futures. For example, we can imagine four different near futures:
- The VIP Economy – where the pandemic is poorly contained pandemic, but there is a vibrant economic rebound.
- Inclusive Abundance – where we see the eradication of the pandemic, and a vibrant economic rebound.
- The Long Goodbye – where the pandemic is poorly contained, and we experience a deep and prolonged downturn.
- Safe but Hungry – where we see the eradication of the pandemic, but a deep and prolonged downturn.
Exploring the underlying assumptions to these four equally plausible but different futures allows us to consider different strategies and policies. But even more importantly, it encourages us to develop resilience and flexibility so we can react effectively to uncertain situations and disruptive shifts.
Some industries, despite facing the pandemic, continue to flourish. Will this be a new beginning for those sectors or is this just a temporary state?
The provisions put in place by governemtns to protect people from the Covid 19 virus have been in place long enough to enable the development of new habits. I think these habitual behavious changes will be very relevant to new business models that have appreaed over the course of the pandemic. If we use foresight to explore the potnetial of existing and emerging technologies, then we see significant opportunity for new busibesses in the future.
During the epidemic firms started to adapt to the new conditions. How is this going to affect business strategies, what is going to change?
Many of the changes we have seen through the pandemic have been „on trend.” But, things like remote and home working could lead to many firms closing or reducing their office spaces. In addition, chaging retail habits in combination with new technologies (partiocfularly AI, augmented and virtual relaity) are likely to see a reduction in floor space requirement across the retail sector which could ultimate change how our city centres look and feel in the future.
What are the prognosis for the British economy for 2021, taking into consideration Brexit, the large burden on public finances, and the effects of the pandemic?
Somehow I knew this would come up! Not being an economist I hesitate to make forecasts. But at the macro level, the UK – like many countries – will contribute to rebuild it’s economy in 2021 starting with domestic consumption following the pandemic. The cliff-edge nature of a post-Brexit world as some people have suggested has only partial truth to it. The UK will not stop trading with the EU under a “no deal” scenario. Yes, there will be tariffs and process changes but the UK’s EU trade doesn’t just stop. In additional the UK has seen some success in both transferring the terms of EU negotiated trade deals to the UK and striking new trade deals. None of this guarantees a return to pre-Covid levels of economic activity, but given borrowing is relatively cheap at the moment, I would anticipate a mix of austerity, public borrowing, some taxation rises, and policy to support growth will mitigate at least some of the post-Covid, Post Brexit costs.
Last Updated on January 12, 2021 by Łukasz