As the COVID-19 pandemic swept across the United States earlier this year and shelter-in-place mandates were activated, the impact on the economy was immediate. Fast forward several months later and COVID-19 is still prevalent in many communities. Even so, easing public health mandates and talks of how to rebuild the economy have already begun. While rebooting the economy is a priority, as important is maintaining the health and well-being of all citizens – it is simply not possible to have one without the other.
For the HACR Research Institute (HRI) team, understanding the many economic factors in which HACR’s Corporate Inclusion Index (CII) participants must navigate adds considerable context to the information that companies share on the HACR CII survey. Those factors require a thorough examination of any number of possibilities – and this pandemic certainly adds yet another layer of complexity that organizations will have to traverse.
In preparation for future discussions with HACR CII participants, the HRI team is reading as much as possible to comprehend what implications this crisis will have as organizations try to find their way back on the path to economic recovery as well as to find resources that provide useful insights for decision-makers. There is no shortage of COVID-related reading material available on the internet.
Here are three examples of what our team has been reading that provide a macro-economic view about what has been observed and what we might see as organizations begin to rebuild:
Since COVID-19 is a global issue, examining the pandemic’s impact on economies worldwide was a good first step for our team. One of the selections on our reading list is from the World Economic Forum, IMF: These 3 charts show how lockdown has affected the global economy. This article examines the pandemic from a global perspective to identify common characteristics across all economies regardless of country size, geographic region, or level of economic development. Interestingly, these traits distinguish this crisis from those of the past in that they confound previous trends. Among the unique characteristics of this pandemic that were identified were:
- Contraction of services in both emerging and advanced economies. To prevent COVID’s spread, quarantining and distancing are required which impacts all services where human contact and interaction are central to their delivery
- Decline in overall inflation despite supply shortages and economic stimulus. Inflation is being kept at bay by softening aggregate demand – the exception to the decline is food inflation
- Markets imply strong prospects for recovery, but activity contradicts it
The significance of these findings is that typically we would be able to refer to history and market performance to help inform what corrective measures might work best to stimulate and promote economic growth in the present. Not so in this case as the economic characteristics associated with this crisis seem to defy expectations. While a clear path to recovery remains unknown, what is certain is that minimizing health uncertainties will be central to strengthening consumer confidence in the recovery effort.
THE ROAD AHEAD
Another selection on our reading list is from MIT Sloan. Economists: Prepare for a ‘reverse checkmark’ recovery envisions what the economic recovery will look like both globally and in the United States. In this article, economists ask “what will the economic recovery trend line look like?” Forecasters usually label what recovery looks like with letters. In this case, economists believe recovery from this pandemic will resemble a “reverse checkmark,” which depicts a significant dip in economic performance followed by a short uptick. They say that critical to being able to make solid economic gains will be containing the virus. Secondly, economists predict that U.S. unemployment will remain high. They highlight the collapse of the restaurant industry and the disproportionate impact on Hispanic workers. Economists also point out that majority of jobs lost in the spring were held by women – and until schools reopen, we will see fewer females in the workforce as their children will require home care.
A third prediction economists made was that countries that invested in their tech capabilities including training and infrastructure were likely to fare better economically than those that did not. These experts saw governments focusing on policies that would help facilitate working from home to promote more productivity. The fourth point economists highlighted was that they were likely to see increased localization of supply chains. They indicated that major shocks such as this pandemic call attention to vulnerabilities in supply networks that cause disruptions to product fulfillment capabilities. On a final note, economists predict that US consumer spending, which accounts for 70% of America’s economy, will remain weak in the foreseeable future amid high employment and continued virus fears.
COVID-19 RESEARCH TIPS
The previously mentioned titles were just two of the many selections the HACR Research team has bookmarked for future reference. We are often asked for recommendations about where to look for information. The referrals we make depends on the specific topic or question. Because there are so many resource options for information, reputable source sites are extremely important.
The volume of COVID-19 related material can be daunting if you are not sure where to begin your research. A great place to begin is the World Economic Forum’s COVID-19 Transformation Map. This micro-site presents readers with an interactive search option of any number of COVID-19 related topics and corresponding information. The implications of COVID-19 are far reaching and what makes this site so interesting is the way user searches are cross-referenced with other topics that they may not have considered. The site’s design takes much of the guesswork out of exploring the inter-relatedness of various topics and presents readers with terrific suggested options on a variety of subject matter.
WEF's COVID-19 Transformation Map
For example, with one click on “COVID-19’s Workforce Impact” the related options that come up include topics such as Corporate Governance, Inclusion Design, Finance and Social Protection, Agile Government, Workforce and Employment, Future of Economic Progress, Future of Health and Healthcare, Retail/Consumer Goods and Lifestyle, Systemic Racism, Advanced Manufacturing and Production, Supply Chain and Transport, Aviation, Travel and Tourism, Education and Skills, Digital Economy and New Value Creation. The WEF’s virtual navigation assistant to COVID-19 related resource material is perfect for anyone who simply wants to explore information. Note: No registration is required to access the micro-site.
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