It has rarely been more difficult to be an optimist. The global economy is heading for its worst downturn in living memory, and Covid-19 continues to cut a swathe through the world’s leading economies. Unprecedented times and exceptional uncertainty: I have no idea what the future holds any more than anyone else, but that won’t stop me trying to find excuses to be positive as the storm clouds gather.

Sales are going up as well as down

It’s easy to focus on the bad news. If it bleeds, it leads. But the declines in smartphone and automotive businesses, important as they are (and which have been largely supply-side-driven) have been contrasted by increases in sales of laptops, TVs, video streaming subscriptions, freezers, alcohol as well as various grocery and household items. Many of these fluctuations may be localised or short-term, sometimes over just a few days. They highlight the extreme volatility and unpredictability which are likely to continue for some time, but should not be taken as indicators of permanent, longer-term shifts. Those may well occur but are speculation at present.

Moving the cycle

Technology demand cycles are characterised by traditional adopter waves. As each new segment comes along, the remaining unpersuaded cite lack of need or interest as perceived barriers to joining the majority. This crisis may convert many later adopters, sooner than they had imagined, into regular users of video communications, internet video, online games, digital health, remote working, distance learning and e-government. Vendors and service providers have been waiting for some of these opportunities for long enough so should be ready to strike when the iron is hot.

Strategies are no longer a cover for inaction

Government reports and corporate reviews can be good at recognising where the future may lie and better at preventing it happening. This shakedown could force organisations to dispose of dead-end plans and embrace challenges which otherwise might remain avoided. Transport is the obvious case in point. We are living through a real-life, global (and painful) experiment in how to change our centuries-old carbon-consuming habits. Alternatives to daily commuting and other unquestioned travel habits clearly do exist, however challenging we find them, and businesses which accept this will thrive.

Daddy, what did they use all those big buildings for?

People need to get together to socialise and collaborate, but the crisis is focusing minds on whether much of what we do in big spaces is fit for purpose. Living and working in the same space (“home”) was commonplace in the pre-industrial era. Technology allows some, if clearly not all, to do this again, and more employees as well as employers will now be considering if it is not preferable.

Already on its knees, traditional retailing has taken what looks like a knockout blow for some players. Excessive debts simply won’t allow them to deal with the shutdown. Many will hope that supply chains hold together long enough to support online delivery until the shops reopen. Buyers with money left will still want to gawp and splurge once the pestilence passes but the experience of not having to visit vast stores and retail parks may have persuaded others to switch more of their retail to online. This will put further pressure on retail real estate but open up further opportunities for D2C distribution networks. Delivery drones anyone?

Dollars from the sky

Severe, short-term hits on employment and income are inevitable: the only question is how societies agree to support those affected, as they surely will. Governments are stepping in across the free market economies in one form or another to save the economy. The certainty is that future generations will pay; the uncertainties are the when and the how much. Some economist somewhere has the answers, but nobody knows which one.

Societies will have to adapt

Western nations will have to adopt more stringent standards of hygiene in private and public life, something some Asian cultures may think is not before time. Cleansing, testing and tracking will be the order of the day for a long time to come. Less certain is how this may be enforced and how people will respond, but increased intrusion seems inevitable. Technology will feature heavily and debates about oversight will be heated. Official monitoring of our daily lives may become more routine, a price some people, if not all, may be prepared to pay. They may also demand that governments remove regulations from other walks of life as compensation, which might help to free up previously closed routes to new business opportunities.

Speed can be good as well as bad

The dizzying rate of change in the macro environment has been stunning, but actions are also being taken faster than ever, by governments, businesses, public sector and consumers. Heads may be spinning but minds are also focusing on what matters. Nobody who wants to stay sane can give space to things which have no material or immediate impact. Maybe, just maybe, we are doing a bit less of the stuff we didn’t really need to do and a bit more of the things we should have done before. If we keep it up this should help us improve our lives as we exit the crisis.

Keep your chin up

None of this is to ignore the serious impact Covid-19 will have on tens, possibly hundreds of millions of people. I have seen a few downturns in my 33-year career but nothing, not even 2008, matches this.

But we got us into this mess and we will get us out of it. Human ingenuity is the basis of my optimism and I see it everywhere in the midst of this crisis – volunteers turning their hand to new tasks, small businesses seizing new opportunities, people reviewing their life plans and skills, officials getting to grips with seemingly insurmountable obstacles. Stay focused, adapt and look forward, and good health to everyone.

David Mercer