Switch on the TV or cast an eye over our newspapers business pages and you’d be forgiven for thinking that the global business ship is on a one-way nose dive to the ocean floor.
We have become accustomed to a forbidding drumbeat of bleak news continuing day after day.
But while the coronavirus pandemic has indeed given the global economy a seismic shock, we should never lose sight of the power of positive thinking – it has long been the cornerstone of business success.
The current situation will inevitably test the resolve of even the most sanguine among us, but in a bid to boost business spirit just a notch, we’ve outlined five reasons to retain a sense of optimism as we set our sights on the post-pandemic landscape.
This is a health crisis, not a financial crisis
This isn’t a banking liquidity crisis like the one we saw in 2008, which caused banks to stop lending. The banks are in a relatively strong position and money should continue to flow into the economy.
Although bank credit can never make an insolvent company solvent, it remains vital in helping to keep the wheels of business moving.
What’s more, this means we can still harbour hope of a V-shaped recovery – a steep decline followed by rapid upturn – according to Bank of England chief economist Andy Haldane.
“There is a debate about which letter of the alphabet will best describe the path of the economy,” he said in a speech at the end of June.
“It is early days, but my reading of the evidence is so far, so V.”
Other economists may have refuted this, but Haldane repeated this assertion to MPs on July 20.
Life may be still be tough for a little while, but an upswing will come, and we can take comfort in this.
Government stimulus will help business bounce back
In a bid to protect the economy throughout the downturn, the Office for Budget Responsibility is estimating the final bill for the UK government will stand at more than £300 billion.
We can reasonably expect further initiatives from the Chancellor as we strive to bounce back from the economic malaise. According to the ‘Bailout for Business after Coronavirus’ report from the Institute for Government, former No.10 adviser Giles Wilkes argues that the cost of supporting business through the crisis is affordable if it helps us return to economic growth.
And governments throughout the European Union are also implementing a variety of fiscal measures while the US, which has long been a catalyst for global economic growth, has approved stimulus packages totalling around $3 trillion.
No return to austerity
Beyond the UK government’s more immediate stimulus measures, what economic policies can we expect it to adopt as we look over the horizon?
Many economists have argued that the austerity measures introduced after the 2008 financial crisis exacerbated the economic downturn. But this strategy, it appears, will not be repeated.
“I think the economy will bounce back strongly, I think that this government will want to encourage that bounce back in all kinds of ways,” Prime Minister Boris Johnson proclaimed in a press conference.
He added that austerity “will certainly not be part of our approach.”
In another speech in Dudley, he reaffirmed his intentions.
“We are not going to try to cheese-pare our way out of trouble, because the world has moved on since 2008.”
This should come as a welcome boost to help encourage both consumer and business spending – and this will ultimately prove the driving force for our economic recovery.
The lights of commerce will keep burning
As businesses come to terms with the post-Covid landscape, spending plans will increasingly fall under the microscope.
However, history and shown us that while many may choose to batten down the hatches, there are others that, in times of crisis, seize the moment to lay down the foundations for their future success – sustaining, or even doubling down, their investments in innovation, marketing and growth. They recognise that the cost of not doing so far exceeds the benefits of any short-term savings.
As Angela Ahrendts said during her time as CEO of Burberry: “I was taught to never waste a good recession.”
These are the businesses that will not only gain a vital competitive edge and increase market share, but they are the ones that will also act as a catalyst for recovery, helping us to keep the global cogs of commerce moving.
Fostering the spirit of togetherness and ingenuity
Over the past few extraordinary months, the world of commerce was forced to adapt to new routines, new strategies, and new ways of communicating and servicing clients. At the same time, companies and entrepreneurs alike made vital social contributions to help us through the crisis – just when we needed them the most.
Employees, meanwhile, remained dedicated to the cause. Productivity among our UK workforce did not fall away, despite the challenges posed by the pandemic. A survey by Willis Towers Watson found that two-thirds of companies had more than 75 per cent of employees working remotely – but only 15 per cent felt that this had had a material, negative impact.
The agility, ingenuity and togetherness has been truly remarkable and it should serve as a reminder of just what is possible when our backs are against the wall. If these virtues are channelled back into driving business success in our post-Covid world, we can rest assured that our economy will return to the fast lane sooner than many doom–mongers will have us believe.