We need to redefine what “normal” is. In the economy, in business, in the labor market.
Last week I had a great conversation with the leaders of the Sustainability Club at Eada Business School Barcelona. In this series of interviews, contributors explore how the role of business in society is shifting and adjusting to these unpredictable and complex times with COVID-19, covering topics such as digital data technology, emotional intelligence, and global governance. As a result of the conversation we had, they wrote this excellent article about how the economy is going to transition towards a New Normal, so I’d like to give you some of the highlights.
The economy will recover
All the numbers show that the economy has taken a hit this year. This is no surprise when you consider 75% of economic activity has been forced to a halt. However, unlike the 2008 Financial Crisis, this specific dip is not a result of a dysfunctional economy, as Piqué explains; on the contrary, “there was nothing wrong with the economy”. Pre-coronavirus, we enjoyed a healthy balance of supply and demand, economic growth and job prospects. Unfortunately, as we flattened the curve, we simultaneously shut down factories, closed stores, and ordered consumers to stay home. Although countless lives have been saved through social distancing initiatives, many fear a recession is looming. It is difficult to determine how our markets will recover, but Piqué believes that we will not see a V-shaped recovery, explaining that “just like in the stock market, you can go down 10% in one day, but it will take you more than one day to build it back up”. He predicts a “swoosh-shaped recovery”. This will take time — most likely many months to a year. Although our economic recovery will be incremental, Piqué reminds us that it will recover.
Welcome to the “New Normal”
As we work towards this state of “normalcy”, we need to redefine what normal is. Piqué began the discussion by urging us to “forget about 2020 and forget about going back to normal”. New consumer habits will develop, labour markets will change, certain industries will come out more robust, government interventions will shift, and businesses will start adapting to a low-touch economy. All this considered, we need to accept that the “normal” we once knew will cease to exist. Piqué believes we should all be adapting to this “new normal” and start seeing the new opportunities it will bring. But remember, changes happen quickly, so the time to start adapting is now.
Global crisis calls for global coordination
Although globalisation has created many opportunities for the global economy, COVID-19 has uncovered the many risks and challenges associated with it. COVID-19 has starkly brought to light how our world is rapidly growing with virtually no universal or international restrictions. It begs the question: How can we live in a globalised world without cohesive globalised action? In light of this crisis, the coordination between countries, states and even continents has been nothing short of appalling.
A COVID-19 lockdown experience is different in every country. The restrictions we face in Barcelona are extraordinarily different than in Canada, Sweden, Nigeria or Argentina. Not even Europe has a uniform approach to tackle this crisis. These blurry restrictions will hurt our societies and economies, but one of the greatest tragedies in this pandemic is that developing countries will suffer far more than developed nations. So, where is the global coordination? Throughout this crisis, organisations such as WHO and the UN have acted solely as key information centres instead of guiding policymakers and governing bodies. As we move towards the exit strategy and recovery phase, we must consider tackling the crisis from a global perspective. Piqué emphasises that we have the capability and institutions to achieve this, we just need to empower them.
Is sustainability on the table?
Before COVID-19, “sustainability” was a common buzz word lingering in the corporate world. Now, as COVID-19 consumes our society, some fear that the momentum to get sustainability on the agenda is fleeting. Piqué discusses a different mindset, noting that we are witnessing the easing of environmental degradation. In a matter of months, we have significantly reduced emissions, releasing 1 million tons of carbon dioxide less than the previous year. COVID-19 is holding a mirror up to our society, confirming that our actions directly affect our climate. This rapid reversal is perhaps the wakeup call we were waiting for, but stakeholders need to act. It is unclear how governments and businesses will view the climate crisis and if they will be focused solely on economic recovery. However, Piqué urges us to keep up the momentum to bring sustainability to the forefront.
Forget about “normal”
Piqué’s advice is simple: Do not think about going back to “normal”. Embrace the “new normal” and act now by drawing your own conclusions about this situation and applying them. Don’t hide from COVID-19, instead collect memories, take photos and write about this time as much as possible. This will be a defining moment in our lifetime.