I appreciate that the midst of the third coronavirus lockdown in England might not be the ideal time to share my thoughts on relative optimism.
And to follow it with a sentence referencing the UK’s enormous Covid-derived deficit seems to take us further away from the thrust of what I wanted to lay out in my first post of 2021.
But I will soldier on.
We’ve grown and developed our business over the last 33 years by always focusing on solutions.
In itself, this fosters a positive mindset. Goodness knows, that’s something we could all do with at the moment but it’s something we’ve retained: to try to see a way through whichever storm is raging towards a realistic, achievable outcome. Optimism, by any other name.
Science has devised a solution in the form of vaccines, even if there isn’t yet certainty that a mutating virus won’t be entirely eradicated and question marks over the effectiveness of vaccines to depress transmission. It is likely to be with us for some time yet. We’ll just get better at not only dealing with it but, at least, living with it.
Which means we ought to be able to focus on the economic emergency in which we currently find ourselves.
Adapting beyond isolation
Adapting will be key. So much of what we’d taken for granted for decades has been ripped up by the social distancing and downright isolation demanded as a response to the pandemic.
In the past, economic expansion and increased productivity has provided the platform to shrink the size of the national IOU. Interestingly, government Covid-based borrowing of £394bn is still below what it made available to bail out the banks in 2008, circa £500bn.
While the amount may be smaller, the damage to the economy has been longer lasting and ongoing, furlough and business support notwithstanding. It will be clawed back but I’m not sure we’ll term it as a “bounce back”.
And it’s being able to adjust that will give us the best chance of making up that lost ground and moving forward again.
Adapting is a theme to which I’ve often returned and, this time, it was given extra impetus by ants. A brief radio programme on them, to be precise.
If I were to introduce this section by the book which inspired the interview: “Ten equations which rule the world: and how you can use them, too”, I fear it may overload some of my less mathematical colleagues.
Suffice to say, that it draws its lesson from how ants adapt to finding new food sources. The first ant to strike lucky leaves a trail of pheromones which is then followed by his fellow ants. When the food runs out, the pheromones fade and they then forage elsewhere.
Ants in action
It’s not hard to imagine, first, dozens of trails which finally lead to tens, perhaps hundreds, of thousands, all being transmitted, renewed or slowly being rubbed out as new, more fruitful routes change the direction of travel. A moveable matrix by any other name.
This is just one pattern the colony provides. One instance in this nine-minute-long gem caught my attention which was that, if the colony is moved or disrupted – subjected to a disaster, in other words - ants immediately discard their old trails and begin again, creating an entirely new network as they adjust to a new reality. They did not revert to the old patterns of behaviour.
From a human perspective, our behaviour alters when faced with challenges such as tube strikes in London or following major dislocation such as world wars. For sure, we have more resources at our disposal than the ant hill has to offer but are our instincts closer than we care to admit?
Is that so very far away from what we all face now? I think that was the intent behind the piece, which is well worth a listen.
And whether or not humankind can be likened to ants is a moot point but there are parallels and this is a particularly instructive one.
What we can agree on is the need for clear policy to foster any recovery. The architects of both American and British post-war rebuilding were helped by demographics, younger populations who brought a surge of ambition, desire and creativity: attributes which we certainly need now, especially as our populations are now greying, rather than growing up.
But these spirits will be evident and need to be harnessed to capital. The government needs to create the market conditions to ensure this next generation of entrepreneurs can borrow, be that loans, mortgages or inter-generational financial innovation, fuelling the next chapter of our economic story.
History tells us that the state will always play a part in backing recovery, from the Marshall Plan to the Beveridge Report, and this pandemic certainly calls for concerted action on that front. I suspect the size of this challenge is what keeps the chancellor awake at night. Will we see such bold leadership from the current Government?
That said, Number 11 still has levers to pull to set a course but Rishi Sunak may well hesitate before flexing his grip on one or two of them.
One that has the potential to burn his fingers is to grasp the handle marked: threatened jobs.
There’s going to be a hard landing for some sectors amid this new reality but, as we’ve seen – not only from the lives of ants - the most resourceful do reinvent themselves, adapting to the circumstances in which we find ourselves but, I fear, it will also see a shake-out. Perhaps this kind of reckoning is inevitable but has just been brought closer by the pandemic.
But I started with the intent of looking forward with some confidence and I want to end on that note. If the policies put in place can spur the overall effort to put this behind us and revive the economy, new jobs can be created to replace those lost. In the long-term, new industries we’ve not yet foreseen could rise.
There may yet be much to which we can actually look forward to but will we, instead, be looking back, thinking how different social behaviour used to be before the pandemic?