It’s already clear that the pandemic has sped up the arrival of the future along several dimensions. A group of economists and social scientists have looked for the upsides of what has been a traumatic time for many. Drawing on lessons learned from societal shocks throughout history, academics from Cambridge, Oxford and Melbourne Universities, as well as the IMF, outline four paths out of disruption that may benefit us all.
Habit disruption – this occurs when a shock forces agents to reconsider their behavior. The pandemic has certainly forced M&E to revise established yet inefficient workflows.
Selection – this involves the destruction of weaker firms so that only the more productive ones survive. Resources then move from the weaker to stronger entities, and average productivity increases.
Weakening of inertia – this occurs when a shock frees a system from the grip of forces that have until now kept it in stasis. This is sometimes called path dependence, the authors explain, as it involves a way of doing things that evolved along a particular path, under the influence of economic or technological factors. On-site outside broadcast production could be considered one of those which has now been reverse engineered into distributed production in the cloud.
Coordination – this can play a role when a shock resets a playing field to such an extent that a system governed by opposing forces can settle at a new equilibrium point. One example of coordination is the Great Boston Fire of 1872, which saw artificially depressed real estate values rise following reconstruction.
The authors argue that to ensure that better ways of doing things are discovered in future shocks, we need policies to help the likely losers share in any upside.
Chiefly, they point to the need to gather data in order to give nation states and organizations alike more resilience when faced with the next crisis, whether another pandemic, a different natural disaster, or an unexpected major infrastructural fault.
Most organizations delete data after a certain period. Nevertheless, Article 89 of the EU’s data protection act GDPR allows for the retention of data “for scientific or historical research purposes or statistical purposes” in “the public interest.”
To manage the transition to a world with more resilient institutions, “we need high-quality data, of all types and from various sources, including measures of individual human productivity, education, innovation, health, and well-being.
“There seems little doubt that pandemic-era data, even when it’s of the most ordinary sort, will remain more valuable to society than that gathered in normal times.”
In sum, if we can learn the lessons of Covid-19, we will emerge from the challenge more resilient and better prepared for whatever may come next.