At the beginning of May 2020 we are starting to see the lifting of restrictions due to the COVID-19 pandemic, but the scope of disruption remains extensive and the economic damage is just starting to become apparent. Over 30 million American’s have filed for unemployment since mid-March, and it’s far from clear how many workers may not return to their jobs. The economic shock is a metaphorical “black swan” event that will have ramification that last for years. The good news is that social distancing practices appear to have averted health systems being overwhelmed in many areas. Additionally, there’s significant progress developing more effective treatments as doctors learn more about the virus, and active research into potential vaccines is showing hopeful signs.
Even as formal restrictions recede, expect behavioral changes to linger for a while. We are already seeing many companies re-invent themselves to operate in the new environment, and today businesses in nearly every industry will have to re-imagine their future. Here are a few things we are thinking about:
Re-imagining manufacturing – Whether process, discrete or batch manufacturing, there’s need to diversify supply chains, ensure that manual processes ensure worker health and safety, leverage remote monitoring, diagnostic and operational capabilities through the use of technology, use AI and machine learning to optimize operations, and re-think logistics across the value chain to improve resiliency.
Re-imagining food – From the producers of agriculture, dairy and livestock to wholesalers, grocers and restaurants, the entire nature of the food value chain from farm to dinner table is changing. From connected agriculture to vertical farming, to increased locally sourced food production, to restaurants transforming from in-person to online pickup and delivery, to the advent of “cloud kitchens”, the way food finds its way to the plate will change in profound ways.
Re-imagining energy – With millions of barrels of oil parked offshore waiting for storage capacity to open up, a massive drop in prices causing the US shale industry to pull production offline, steep declines in commercial energy demand and the unexpected upside of cleaner air and quiet skies, the sudden changes at hand force a re-evaluation of supply, demand and the infrastructure needed to power an economic restart. Wind, solar and other renewables must continue to deliver cost benefits and innovations to integrate with legacy sources of energy.
Re-imagining transportation – Shared trains, busses and taxis hold far less appeal in a world where passenger concerns about close proximity to others could depress ridership of public transportation for some time to come. The passenger vehicle will be around for a while, but new patterns of telecommuting and virtual meetings call for transportation providers to come up with creative ways to provide safe services to travelers.
Re-imagining spaces – The nature of how humans interact in public and private spaces is already changing to accommodate social distancing. For the time being, there will be a lot fewer people sharing common spaces – working, socializing, being entertained – and this changes the economic calculus around commercial real estate, multi-family housing, entertainment venues and other spaces.
We are a long way from having the answers, but we are trying to stay ahead of the curve by asking the right questions. At Momenta, we are working with companies large and small to help them chart new paths ahead. As the public health threat abates, the economy is taking tenuous steps back to growth – the choices we are making in the days ahead will create a resilient and sustainable future.
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