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Close look: Pandemic as a catalyst for change?

3 years ago
Covid-19 looks set to leave a trail of economic damage that will outlive the spread of the virus. Government and central bank stimulus on a huge scale has led to a dramatic rise in debt levels. Taxes look set to rise to pay off this debt. Meanwhile, global supply chains were fractured by lockdowns and could be slow to rebuild. It’s hard to imagine how a pandemic could create anything beneficial. But Covid-19 might do just that.

The global crisis has brought a renewed focus on social issues and placed companies’ treatment of stakeholders under greater scrutiny. Indeed many companies have visibly supported society, as well as their employees and suppliers, during the pandemic. But companies with a less socially responsible corporate culture have been named and shamed, which could lead to more ethically minded investors shunning them.

The suspension of economic activity has driven improvements in our environmental wellbeing. As an example,  the European Union’s economic plan for recovery from the virus, Next Generation EU, links massive financial stimulus to the European Green Deal. This could accelerate the trend
for sustainability.

The virus has even improved our personal wellbeing. Employers have encouraged staff to practise mindfulness and meditation to contain lockdown-induced anxiety. Mindfulness can reduce stress and emotional exhaustion, and these good habits could outlive the pandemic.

The acceleration of remote working, online shopping and video-conferencing trends during lockdown could lead construction companies to build more data centres. And digital tools, such as artificial intelligence, machine learning and big data, can make supply chains more resilient. Industry commentators think such applications could become more widespread, with Covid-19 the tipping point for change. This could also benefit the environment, with wastage reduced as goods supply more closely matches demand.

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