The New Economy

by | Apr 10, 2020 | Uncategorised

What are you talking about Andrew??? New Economy? Are you just making stuff up now?!

I know I know. But trust me, this crisis and the recession we’re entering represent a huge shift in how we live, love and work, and will have lasting impacts on our collective psyches and those of generations to come.

And believe me when I say as we come out of this current crisis we’re going to see a period of societal upheaval and change unlike anything we’ve seen before. Welcome to the Roaring 2020s!!

Most importantly though right now, we need to understand the trends we’re seeing around us, where they are likely headed and what we can learn from historical recessions to put us in the right place to not only survive, but thrive during this crisis and on the other side.

So I’ve spent a whole bunch of time over the past few weeks reading what the experts are saying, analysing the data, and synthesising it into understanding exactly how and when lockdowns will end, and the impacts we’re going to see on the economy and society as a result.

Want to see what I discovered? In summary:

  1. Rolling lockdowns will last at least 12 months (simple maths explained below).
  2. This crisis and the recession will have a significant impact on our psyche and generations to come.
  3. Businesses can thrive during recession and depression, if they pivot and learn from history.
  4. We need to pay attention to the trends we’re seeing that make it a bit different this time around.
  5. There are plenty of opportunities for business, how can you capitalise on these trends? (The principles to follow).

For more detail watch the industry briefing video below…

Download the cheatsheet

Show your working!—Five COVID-19 end game scenarios

For those who want to understand how I got to my predictions, here are the references and simple math behind my lockdown predictions for the 5 COVID-19 end game scenarios presented in the video.

Feel free to play with the spreadsheet I’ve created here. You can make a copy of the sheet and play with the variables if you like.

Please note: These are rough estimates only. There are many moving variables in these scenarios, which is why the media or politicians aren’t giving clear advice on timings or strategy. One of the biggest variables will be how many additional hospital beds with ventilators and nurses can be assembled during the current lockdown period.

Fast herd-immunity

Once reached, ‘herd-immunity’ means that enough of the population is immune to the virus and it therefore cannot spread through the population very far at all. At that point we could open up our borders (including internationally) and go back to business as usual.

To get to herd-immunity quickly, this end game entails opening up all lockdowns and letting the virus take it’s course (it would scale up quite quickly over a couple months). Many would get infected (now during winter thanks to the shutdowns so far), the health-care system would be overloaded, many would die, likely at least 500,000.

To get to to herd-immunity quickly:

Due to large numbers of deaths, this end game is not likely to ever be considered viable socially or politically in Australia.

Slow herd-immunity

To get to herd-immunity safely takes time. In order to maximise the preservation of lives, we need to be careful not to go so fast as to overwhelm the health-care system. By maintaining and moderating rolling lockdowns we would be able to keep as many people alive as possible and support them to full recovery. This takes time. A lot of time as it turns out… Almost 10 years!

To get to herd-immunity safely:

  • At least 60% of the population need to be infected and recover (around 15 million Australians).
  • We currently have around 2200 ICU beds in Australia.
  • Patients need on average 10 days in ICU to recover.
  • This means we can treat around 6600 critical cases a month.
  • Since critical cases represent 5% of all cases, we could safely allow 132,000 Australians to be infected each month.
  • To get to herd-immunity (15 million recovered) would take around 9.7 years!
  • Note: This doesn’t factor in that ICU beds are typically always in use and near capacity in Australia during flu season anyway, so it’s likely much longer (up to 25 years)

Burnout immunity

Some clever folks realised that we don’t need to reach full herd-immunity before opening up restrictions and borders. By their models, once we reach even 30% of the population who have been infected and recovered we can reach a ‘partial herd-immunity’ that allows us to go back to BAU. In practise this means that at that point, with restrictions lifted, the virus would still infect people and spread, but the partial herd-immunity would slow the spread and ‘burn out’ before health-care systems become overwhelmed.

To get to ‘burnout immunity’:

  • All the maths for ’slow herd-immunity’ are relevant, except only half as many Australians (7.4 million) need to be infected and recovered before we open up restrictions.
  • To get to burnout herd-immunity (7.4 million recovered) would take 4.8 years!
  • Note: This doesn’t factor in that ICU beds are typically always in use and near capacity in Australia during flu season anyway, so it’s likely much longer (up to 12 years)

If we could double our ICU capacity, we’d get back down to 3-5 years, but that’s still a long time, and not likely to be considered politically or socially acceptable given the impact on the economy and mental health of the population.

80-100% lockdown

Currently schools, daycares, shops, transport are all still running. We’re actually not locked down. A higher rate of lockdown would mean that existing infections would play out and then Australia would be clear of all infection.

If we increase the amount of the population restricted to their homes above 80% we can see that the virus will actually play out and die down, eventually. This could take up to a year, or longer.

The higher the lockdown %, the shorter this takes.

100% lockdown and infections could be stamped out within 6-12 weeks (depending on levels of compliance). However this level of lockdown would crush the economy and likely have a huge impact on society and mental health.

Wait for vaccine

The good old Hail-Mary play. We’ll just wait it out for the vaccine to arrive, or pray for a miracle intervention.
Not a bad option when you look at the other scenarios. But optimism is mixed here, and many believe 18 months to be a very ambitious timeline to expect this solution to be available.

Wrapping it all up

The upshot of all this is an extremely large impact on our society, economy and our collective psyches that will change the way we live, love and work for generations to come. This is the New Economy. Good news here is if you understand how things are changing you can pivot your business and take advantage of the many opportunities this situation will present.

Takeaway only

What’s your biggest takeaway here? What does the New Economy mean for your business? What are the opportunities here for you? Drop us a comment below.

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