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April 14, 2020 | 5-minute read (963 words)
As businesses continue to struggle during the coronavirus emergency, many entrepreneurs are wondering just when — and how — they may be able to get back to some degree of normalcy. To find an answer to that, we pored over three recent TED Talks to get a feel for how some thought leaders are expecting the pandemic to impact businesses and the economy.
Zakaria: Restarting Economy Will Require Several Factors
Today’s economy is being impacted by more of a paralysis than a classic recession, journalist Fareed Zakaria noted during his TED Talk, “How the World Could Change after the Coronavirus Pandemic.” For the first time in history, we’re facing “a literal standstill of large parts of the major economies of the world,” he said.
The paralysis may be much deeper in the short-term than even the Great Depression was, Zakaria said. “If it’s short, you could see a return to some degree of normalcy, but I think it’ll be very hard to just restart the economy. Because what you realize is that modern economies are like riding a bicycle on steroids – you have to keep moving forward. When you stop, it’s not like you can just pick up where you were.”
For instance, a restaurant starting back up after the pandemic ends may not have its same customers around, the public’s attitudes will have changed, and its supply chain may have been disrupted. “I think if it’s a short shock, we might get back to some degree of normalcy, although there may be some industries like travel, restaurants and theaters, maybe sports, that will have a much longer timeframe." However, he added, if a vaccine is approved, that could change the course of this impact.
Although Zakaria said it’s important to stress how negatively the pandemic is impacting people all over the world, he also pointed to some possible positives that could come out of it. For instance, he said, people are finding ways to be able to do things digitally where they previously weren’t, productivity tools are becoming more ubiquitous, and some businesses are realizing they can do more remotely that requires employees to travel less, which could have benefits beyond business, such as for the environment and for family life.
Allen: The Economy Is a Public Health Concern
One of the most damaging things about coronavirus is that it has prompted multiple problems to take place at the same time, said Harvard professor Danielle Allen, an expert on the intersection of ethics and democracy, during her TED Talk, “An Ethical Plan for Ending the Pandemic and Restarting the Economy.”
“We’ve actually faced two existential threats simultaneously,” she said. If we’d allowed the virus to continue spreading in an unimpeded way, it would have paralyzed our public health system. But by mitigating that situation via shutdowns, we’ve devastated the economy. “We really need an integrated strategy, one that recognizes both of these existential threats and finds a way to control the disease at the same time we can keep the economy open,” she said. Her team is using the term “pandemic resilience” to represent that intersection.
Although we think of the virus as being the sole public health issue we’re facing, that’s not exactly true, Allen said. “The economy is a public health concern in the same way that the virus is a public health concern.”
The alternative to social distancing, she says, would be massive scale testing combined with individual quarantines for those who are positive for the virus. The only way an individual quarantine can work is to do a huge amount of testing, so we’d need to make the tests universally available. Tens of millions of tests a day would have to be combined with quarantine for those who test positive.
She created an alternate proposal for efficient, widespread “smart testing,” which allows the public health system to identify people who are positive, and then use contact tracing to test anyone who was exposed to those people over the previous two weeks and test just those people. By testing the higher probability people, tests can be reserved for only those who are more likely to have the disease. She suggests that this strategy could open the economy while also ensuring that people stay safe.
Dalio: This is Bigger Than 2008 Recession
Today’s economy is in period of stress, but many of these situations have happened throughout history — the key is how we get out of it, said Ray Dalio, founder of portfolio management and hedge fund firm Bridgewater Associates, during the TED Talk “What Coronavirus Means for the Global Economy.”
Dalio expects it to take about three years to get out of this financial depression, and then rebuilding will take place -- and rebuilding comes from creativity, he said. “The greatest force through time is human inventiveness, adaptability.” These factors will help the restructurings take place. “It will pass, the world will be very different, but it will pass,” he noted.
When the economy rebuilds, it will be a different landscape, Dalio said. “This is bigger than what happened in 2008,” because the crisis is more broad, and interest rates are already at their limits, he noted.
He says there are two main industries with the best chances of thriving after this crisis ends. “There are those that are stable, meat-and-potatoes companies that aren’t too leveraged, things we’re always going to need … and then there are the innovators,” he said. “That new innovation, those who can adapt well and innovate well and have strong balance sheets will be great winners. There are always new inventions, new creativity, that’s the adaptivity that becomes a company and an entrepreneur, and those will do great.”