If you want to know how to stimulate (or stifle) an economy, there’s no better time to learn.
The coronavirus pandemic has swept the globe, ripping through modern economies and forcing governments in countries of all shapes and sizes to take unprecedented economic actions in its wake.
What’s emerging, slowly and while we’re all in a state of shock, is a new economic premise. A real living wage (£2500 seems to be the going rate in the UK), the concept of a universal basic income, a business landscape without the cash-flow sucking spectre of taxation and cancelled taxation initiatives that now, on the face of it, look trite and ever so bonkers.
Every worker, or at least ever worker they could quickly come up with a scenario for, is being promised a basic income to keep the economy moving. Every business is being offered generous taxation deferrals and grants to keep the cash flowing. Not to mention access to bank funding without the threat of having to risk your home to get hold of it, tied up neatly with a positively generous 80% underwriting ribbon, all courtesy of the British Government.
And this, we are led to believe, is only the start of it all.
In “normal” times, however, the exact contrary of these initiatives is what we are told drives an economy. Universal incomes are ideas castigated as left-wing madness. Bank lending with a government safety net is a lender of last resort. Don’t even get me started on the tourism tax. I’d like to think that craziness is now universally assigned to the rubbish heap, where it firmly belonged in the first place.
Businesses are going to have to gear up again when we come out of the other end of this pandemic. And the economic landscape will have forever changed. The market economy we have learned to live within has pivoted on a knife edge, sharply and painfully for some.
The shift into the fourth industrial revolution has arrived, sooner than expected and dressed up in a tsunami of viral infection called COVID-19. But, make no mistake about it, as we rebuild those building blocks of our society, and the economies that will flourish within it, things will be different. Better, one might hope.
Taxation policies that strangle small businesses’ cash flow will need to be rethought. Grants that facilitate business growth will be liberally applied. Universal incomes may become the norm, underpinning this new economy we will seek to develop. Tourism will flourish again, but travel may be closer to home. Long haul flights that take us to far flung undiscovered corners of the globe will be a thing of the past. Airports a dim and thankfully a distant memory. We don’t need teleportation if we have Zoom.
China, the so-called engine room of the world, will see its air polluting, price gouging industries wind down gradually as economies around the world look to support indigenous suppliers to fulfil their needs, creating local jobs and local wealth in the process.
The planet will breathe a deep sigh of relief as we downsize our cars or adopt new car sharing services. Disposable coffee cups will be cast to one side as we reprioritise our daily habits. It takes 28 days to create a new habit, they say. But it can also take just 28 days to lose an old one.
Market disruption, like we’ve never seen before is happening right now, before our eyes.
What an extraordinary time to be alive.
Tricia Fox is the founder of Volpa and a Fellow of the Chartered Institute of Marketing.
Read her full biography here.