How COVID-19 changed the world

It’s always an interesting thought exercise for anybody wondering about the scale of change and reaction across the world to the COVID-19 pandemic, to simply cast their minds back one month and try and remember what life was like.

Even better than that, just think back 2 weeks ago, or a week. What were you doing? What was the outlook? How were you feeling?

One whole month ago the world was starting to wake up to the potential threat of Coronavirus, and were discussing the potential for containing the virus, for keeping things running normally or even for just a small inconvenience in our otherwise busy lives.

Two weeks ago? People were still discussing the growing numbers of confirmed cases as though this gave us any indication of when we’d tip over into full blown pandemic. Looking back today it seems another world, another time even.

Einstein's theory of special relativity says that time slows down or speeds up depending on how fast you move relative to something else. For anybody who’s been keeping up with the rapidly developing crisis it seems particularly relevant to a year that is not even 25% completed and yet feels as though it could well have been half a decade.

Perhaps the most concerning part, however, is that we are still pretty early on into this crisis and despite the world working at breakneck speed to find a solution, a cure or a vaccine, we may still be up to two years away from returning to total normality.

Hopefully that’s an absolute worst-case scenario, but regardless of the timescale it’s likely that there will be long term ramifications both socially and economically, so what could they look like?

Economic

One pressing question is whether, in the long term, we’ll ever truly return to office-based working again.

The reality is that many people cannot work from home but as this virus has demonstrated, there are a significant amount who can, and could have done all along. With that in mind, will more people now look to ask their employers for flexible home working where it’s possible?

The second aspect to this is that when the schools shut down and employers show their maximum flexibility with working hours it may become more obvious to some sections of the workforce how much flexibility is available.

Secondly, there are serious questions about the sustainability of globalisation. If the response to this virus is anything to go by, the globalised nature of our economies and societies could be under serious threat. Contrast the nationalised and isolated responses to this crisis with the coordinated and international response to the financial crisis of 2008 and the differences are stark.

Back in 2008 the newly elected President Obama and British Prime Minister Gordon Brown led a global response to the crisis with international co-operation and purpose. In 2020 we are seeing just how fragile these alliances were, with arguably populist leaders in almost all of the leading Western economies apart from Germany, Spain and France.

With the global food chain and supply chain now under strain thanks to panic buying, could there be a sustained and powerful campaign to return to industrialised and nationalist economies like those of the 1970’s and earlier? It’s certainly a possibility.

One thing that I imagine will live long in the memory of most will be just how quickly certain supply chains were strained once China entered lockdown. There is quite a distinct possibility that, given the issues this caused, there may be quite loud calls for industry to return to Europe.

In investment terms, it’s hard to imagine that once the government have a grip on the crisis that investment behaviour will simply or quickly return to normal. The reality is probably going to look a lot more like investors moving slowly back into riskier markets.

For the foreseeable future, expect the money to move and stay in businesses that are well equipped to weather this storm. Think banks, engineering, home entertainment, delivery and other such businesses. Aside from that is the obvious trend for property and bond investment to continue increasing and staying fairly robust over the coming years.

Social

Economically, it’s hard to say whether the aftershock will be felt for years or longer, but eventually things will return to normal as they always have done. Critically this isn’t the same as the 2008 crash as it isn’t a systemic financial problem, it’s a global shock. The smart money is on the markets returning to their pre-pandemic levels, unless there has also been a slight correction, which there may well have been.

The social and psychological impact will probably be felt for much longer. Is it fair to imagine that a society that had grown so far apart, so isolated and so divided may have needed something like this to bring it back together and take stock?

This isn’t like World War 2 in that we are not under immediate and indiscriminate threat by warfare. War and bombs didn’t have an age relative mortality rate, and it was in an age where communities relied on each other anyway, when technology barely existed as it does now.

Where it is like the war, however, is that this requires a national effort to overcome. It requires people to come together to look after the vulnerable, to place their trust in experts, and to listen to the government of the day.

In a country that has been psychologically ravaged by suspicion and political divisions over Brexit, we must very quickly (and the signs are positive) come back together regardless of political persuasion to protect each other.

Separately, this reminds us of just how lucky we are to live in a liberal democracy where we are free to do, say and feel however we want. Our movements and daily lives are relatively unimpeded by government intervention aside from safety measures.

We are able to leave our homes, go to bars, socialise and write and say what we want. This crisis has reminded a population whose memory of war are fading, that liberty is not a given and that sometimes it must be sacrificed for the greater good.

Finally, there is nothing quite as sobering for anybody as a timely reminder of your own mortality and the fragility of our very existence. Nothing is important when it comes to the continuing existence of the human race. Petty squabbles, racism and even war pale into insignificance when we see the entire world battling a potentially existential threat.

What are the long-term effects of this crisis likely to be? It really is quite difficult to say, but I say with hope and expectation that we may overcome it with a renewed sense of togetherness, purpose and respect for our environment and fellow humans.