2nd Order Consequences of COVID-19

The Great Interruption of 2020 will lead to the Great Disruption of 2021. And this will be a disruption unique since World War II - one which took everyone by surprise and is pretty much evenly distributed in a very short period.
Tech disruptions tend to impact over 20 year cycles. This is something different. COVID-19 is driving massive habit change and with it the potential to have deep impact on society - potentially culture-changing impact. We are seeing the initial impact immediately.
Again, uniquely, we have the Great Pause we are all being forced to contemplate, to prepare for what comes next.
There are the first order consequences we see reported on our evening news. The economic shut-down, the school closures, the strain on supply chains.
And then there are the second and third order to come.

Consider:
1. Demographics: Beyond the first order consequence of the death of one-in-ten aged over 80 (which is about in line with deaths from all causes for the over 80s in a typical year), the bigger impact will be in a slump in pregnancy rates. Since COVID-19 was identified as a risk to pregnant mothers, sales of birth control went through the roof. So we can expect a 3-4 month birth lull in 9-12 months time. That gap will be present as it hits the health service, then nursery education age, school age, college age, and entering the workplace in 18-21 years time. That's a lot of flux for all our institutions to handle. The lull is likely to be followed by a boom.
2. Food: Yep, in lock down we think about it a lot. We make meal plans. We start to value 'fresh', we become very conscious of waste, we find time to make from scratch - all the things the convenience (read Easy) generation(s) have bypassed for 20 years. The first order consequence of disruptions to supply lead to second order consequences of increased valuation of the food we do have. New habits forming now could see a mid-term negative impact on restaurants, fast food outlets, convenience food manufacturers... and a positive impact on organic, locally-sourced, fresh suppliers. Reduced consumption (via reduction of waste) is a likely second order consequence across the board.
3. Education: Lessons, quite literally, are being learned about digital. First educators are getting a rapid education in virtual lessons. This has benefits for meeting individual learning styles, aligning with need in more individual ways vs time of day you find best for learning, pace at which you prefer to learn etc. Just as digital has generated the opportunity to move away from treating customers in a one-size-fits-all way, so it reveals an opportunity for segmenting and personalising education which could rapidly accelerate its outcomes for every individual. And beyond that, digital means expanding the capacity of an individual teacher or institution such that we can now teach the world. There's a UN Sustainable Development Goal on the way to being met, right there.
4. Politics: The emergence of an instant Technocracy (rule by unelected experts) is one we seem quite comfortable with. Our politicians right now (as seen from the UK) are pretty much mouth-pieces for their experts - the Chief Medical Officer and the Chief Science Officer bringing a level of evidence-based rigour to decision-making that our very generalist politicians are quick to defer to. Will this be forgotten when our experts on the economy make comment on issues (such as) Brexit in the future? That remains to be seen but trust is science is (outside of the flat-earthers, anti-vaxxers and 5G fallacy peddlars) at an all time high. This bodes well for a shift in the political landscape toward one where the focus is less on what plays well to the gallery (the populist agenda) and more on a test-and-learn, more honest, approach to dealing with the ambiguity of the economy. Less opinions - more evidence. We can hope.
5. Travel. When this lock down is over I suspect a lot of folk will want to travel for pleasure. But from a business point of view, we have learned a lot about how digital really can replace jumping on a plane. Senior execs have been given an accelerated learning and that has positive impacts for their bottom line. Expect travel budgets to be slashed at the very least - with all the second order consequences for airlines, airports, hotels, car rental, conference venues etc.
6. Antifragility - If that sounds like a made up word, let's talk about business resilience instead (though if you are familiar with antifragility, you will appreciate the difference). The bottom line is COVID-19 has revealed to us again how inefficient being too optimised is over anything more than a short-term period. And we cannot predict, with any certainty worth having, how long that short-term may last. Systems - from supply chains, to ways of working, to value proposition have been revealed to be too inflexible to cope with shock. The first order consequence of that is shattered businesses with the shattered lives they leave in their wake. Second order - businesses that survive will have already made themselves anti-fragile in several ways and those that build after will learn from them. The whole notion of leveraging, fantasy multipliers, business plans built on same-happening-next-year-but-a-bit-more must be swept away. Second order may be in the personal realm - we may have just created a generation of savers, folk who will try to build some anti-fragility into their own finances and ways of living. My guess is this will result in reduced consumption as people seek to live lives in reduced debt, building some cash reserves, fore-going the next new car, TV, phone, foreign holiday. Consuming less and savouring more.

All these consequences of COVID-19 (and I'm sure you can think of many others) accelerate the demand for what I had already identified as twin increasing trends:

1. Ways of dealing with the ambiguous, complex requirements of the digital world
2. Ways of handling the rising prioritisation of concerns for the planet.

The first because we face such a period of disruption in which we may see what is hitting us but we lack clarity as to the connections between cause and effect. We have to probe-sense-respond our way through this to develop the most appropriate digital responses.

The second because we have seen we CAN make a difference (in those pollution-falls stories you will have seen). We all have a renewed appreciation of the simple pleasure of time spent in nature. We are all learning the importance of reducing waste. And we are all appreciating more the damaging impact of unchecked consumption on our own lives and on the fragility of the systems, economic and natural, we depend on.

Change is coming. You have time to act. Don't waste the opportunity.

Photo by Melissa Askew on Unsplash

Covid-19: You can only predict with the data you have. Scary numbers in context

Like so many commenting on this Covid19 crisis - I'm no expert. I just connect the dots to try to understand - just as I do with anything else I experience.

So here's my guess on what the Government is up to:

1. They were always planning to put the vulnerable in a long period of isolation. The bet was that in isolation very few (comparatively) would succumb. They were expecting the 10s of thousands of deaths number they now hope to manage us towards.

2. Acting in this way early enough would allow the wider society to continue to function and - crucially - the NHS to cope.

They assumed that those requiring hospital beds would broadly be in that vulnerable group with limited exposure. But lots of younger folk need some care. They survive - but they need NHS resources. That's what the data shows from Lombardy - and that creates the crisis point for the NHS.

I think the tipping point moment for the Government was when they recognised (only this weekend) that there were likely to be up to half a million cases in the UK already - not the few thousand detected. In that scenario it is highly likely that those now being asked to isolate for months include large numbers who have already come into contact with the virus.

That could result in significantly higher numbers of deaths than an earlier invocation of isolation for the vulnerable would have caused.

If you take a (broadly) mid-point mortality rate between the Chinese and Italian experiences you end up with 100,000s of thousands dieing in the UK. This sounds scary big but remember, 550,000 people die in the UK every year and many of those this virus will be accountable for are substitutional rather than additional (ie folk who may well have died in the same 12 month period).

To provide some further context, if 100,000 people do die in the UK - that's one in 600. Alcohol or drugs kills 1 in 34 , heart disease 1 in 4. And the average American has a 1 in 77 chance of being killed by firearms.

Had we moved to isolate the vulnerable earlier, the period of social distancing for the rest of us that is now required could have been significantly shortened. But you can only predict with the data you have. And that 500,000-cases-in-the-uk guestimate is very new.

My guess is now that restrictions will only be lifted once the vulnerable are secured and the hospitalisation-rate among them calculated.

The Great Pause has begun.