Rarely have events accelerated so rapidly or so radically as they have in the course of the Covid-19 pandemic. Governments have taken exceptional measures to protect citizens and suppress the spread of coronavirus disease. In tandem, fiscal support schemes of historic proportions have been introduced to preserve skills and stave off business failure.
Looking ahead, we expect the crisis to operate as a catalyst, accelerating changes in human behaviour, driving forward scientific and technological advances, and ushering in further digitalisation and some tough choices on automation. The consequences – including the anticipated transfers of wealth – are likely to drive a reordering of public policy priorities and bring about the most-significant shift in the relationship between the individual, corporations and the State seen in a generation.
If the scale and speed of the initial economic and financial response have been extraordinary, they seem set to be overshadowed by what lies ahead. The period of transition to any “new normal” will present investors, business and society at large with more crucial questions to be answered in a shorter time than ever before.
As governments strive to put in place the conditions necessary to restart economies, employers will, at the same time, be making critical assessments of employee safety and commercial judgements that could determine their very existence.
Reshaped workforces will be more agile and flexible than ever before. A new balance will be struck between the privacy of personal data, civil liberties and public health. These debates began before the crisis but will now be had more urgently, more fervently and, quite possibly, with more radical conclusions than seemed possible only a few months ago.
Balance sheets of fundamentally good businesses will call for repair and restructuring. Opportunities will emerge for new money to be invested and for the strongest and most ambitious to consolidate control. This though against the backdrop of rapidly declining public trust in private and foreign capital, growing concerns about security of supply and a rise in protectionist sentiment.
National governments are therefore set to play a greater role in the ownership and direction of their private sectors than at any time since the middle of the 20th century. And with more state involvement comes greater public scrutiny and accountability.
Management, already under fire on executive remuneration and braced to deal with hurriedly-introduced changes to insolvency laws, will see the rule book re-written across the board. Adding to the compliance burden, strategies will require implementation to prepare for and mitigate the risk of a “second wave” of infection, and environmental, social and governance factors will only continue to rise further up the agenda for business and investors alike.