It is crucial to understand the economic damage the Corona Virus has caused and to comprehend its effect on both the businesses and the affected people to reimagine a future after the pandemic.
Statistics show that people who have already been economically vulnerable, such as low-income families, less-educated workers, and people of color, are most impacted by the economic change and are likely not going to withstand the disruption.
In addition to that, especially small, middle-sized, and young businesses are at highest risk of failing however, those are also the companies that expedite the employment growth the most. By implication an economic failure of those businesses would result in an even higher unemployment rate and therefore an even higher economic downfall.
Additionally, fundings for start-ups and innovations are put on line, as during the last economic crisis in 2008/2009 venture-capital companies were less likely to raise new funds, in a matter of fact, the vc raised declined by nearly 60 percent.
Food services and accommodation, manufacturing, and retail are again – similar to the last five recessions – the sectors of the US economy that experience the greatest economic impact. In particular states in which those are the predominating sectors suffer from high unemployment rates, whereas states with a lower concentration in vulnerable sectors don’t see a notably change in such. This emphasizes the importance of reconceptualizing the economy after the pandemic in a way that won’t engender states to fall into an economic crisis once a sector is more affected by change than others.
Another hard challenge for everyone during the lockdown was the digital infrastructure. The access to reliable internet varies strongly across counties even in the same state and especially rural areas are affected by an enormous lack of internet access which causes big problems for everyone who is sent into home office.
The crisis has aggravated the prevalent divides, underlining even more the prevailing inequality, the growing discrepancy between poor and rich, and its effects on the people.
In order to reimagine the future, state and local leaders will have to consider new ways of addressing supply, expanding productive capacity, and adopting change in work and organization.
The first step could be to shift activities to online channels because it’s very likely that economies that expedite those trends will outperform those that cling to traditional sectors instead.
Leaders can incentivize the technology and skill investments needed for businesses and workers to adjust to automation and digitalization.
It is also very likely that in the near future, new health products and systems will play a more important role in the way businesses are conducted. For instance, hotels and airports are investing in contactless technology due to the physical-distance requirements and companies as well, will have to craft policies in order to meet the new health demands.
Investing in innovation ecosystems will also be mandatory to build a strong post pandemic economy and to have a global share of the innovation economy.
In an effort to expand the productive capacity, leaders are well advised to invest in inclusive growth. According to research, equity-enhancing measurements can boost economic growth. Long term solutions will have to target investments made to ensure equity in wealth and income across all demographic groups.
In particular the divide in digital knowledge would have to be closed and to ensure that it is useful to strengthen education on problem solving, technology, and mathematics on all levels, and to support low-income groups in gaining digital and knowledge-based skills.
Investing in public digital infrastructure projects can create jobs and attract business investment.
Nevertheless, to come out of the pandemic stronger, the organization within the government will have to change as well. A broad-based group within the government will have to be convened that works on issues such as economic development, education, energy, and transportation together. In addition to that, involving minorities in the process making can be useful as well. Studies show that a political engagement can help the communities to identify with, advocate for, and lead the work to bring in more sustained long-term investment.
Introducing better success metrics can also be good way of focusing on a great outcome. Implementing new strategies requires a maintenance in focus, discipline, and energy throughout a multiyear period, and each initiative needs metrics, targets, milestones, and owners. It’s important to identify those metrics and targets both long-term and short-term, for instance, in productivity and GDP long-term wise, and job placement short-term wise.
Ultimately, it’s crucial to execute with accountability, sustainability, and agility since implementation is where governments and multi sector task forces most often fall short.
The COVID-19 crisis has been unique but devastating yet the individual resilience of businesses and workers has been truly astonishing. The crisis should be viewed as an opportunity for leaders in government and across sectors to reimagine not only the economy of tomorrow but new ways of collaboration and cooperation.