Dare I suggest that, this year, I can be reasonably confident that next year will be better than its predecessor? I know that we are facing yet another variant of Covid, which is causing great angst, but it does seem that, as suggested over a year ago, mutations become more transmissible but less deadly, due to the sole goal of a virus – to reproduce. Killing the host is “bad for business” in virology terms.
What we need to realise is that there is often an annual flu virus that spreads and, sadly, causes death and illness but which is vaccinated against (traditionally offered to those in the vulnerable groups). A non-vulnerable sufferer takes to their bed if they are ill but isn’t required to self-isolate, their family and contacts aren’t required to self isolate and the world isn’t wrapped in cotton wool to protect against its spread.
There have been so many balls in the air and plates being spun (sometimes it felt like both activities were ongoing at the same time) in recent years that the future has seemed uncertain or, at least, unclear. Now, however, I think that there is a basic level of confidence returning, at least on a macro level.
On a micro level, however, no one has been left untouched by the Covid pandemic, both personally and economically. Truth to tell, even if you have been lucky enough to avoid the health implications of the pandemic, no one is going to be able to avoid its economic effects for the next generation. This means that economic activity in all its forms has to be actively encouraged – a healthy economy results in a high tax-take; a high tax-take before an economy is healthy leads to high interest rates, low productivity and high inflation – disaster for any economy seeking to support both a weight of borrowing and the care of greater numbers of both the elderly and, potentially, the long-term ill.
Our children and grandchildren will be paying for this pandemic for decades to come, we should make it as easy for them to do so as we possibly can by encouraging an entrepreneurial spirit and culture to grow from the devastated current economic landscape, damaged as a result of the response to the pandemic.
The recovery from the credit crunch saw an enormous increase in SME and micro businesses. Wealth generation became spread much wider amongst the population. With the pandemic-enforced lone-working experienced by many, it seems likely that a reasonable percentage of those will now take the opportunity of doing themselves what they had previously been employed to do. Spreading economic activity across a wider cross-section of society must benefit all concerned and, as I say, lead to a greater contribution to the coffers of the government to support those most in need.
It is also worth saying that there is a difference between working on your own and working alone. The former is something that many will come to appreciate, the latter is often soul-destroying. Now that physical contact is returning, those who were forced to work from their homes and on their own will either return to work, to be with colleagues and interact on a daily basis with a large number of people, or may choose to plot their own path, knowing that they can still meet with clients, contacts and prospects. Each individual will have their own place on this “economic engagement” spectrum but even those who don’t feel that they want to set up their own business may find that working with two or three people is more rewarding than being part of a cast of thousands.
On a macro level, it does seem that global politics is now returning to the centre of people’s attention: the conflict between the EU and some of its eastern members; the conflict between the Ukraine and Russia; the threat of China to democracy in general, to its obligations in Hong Kong and to Taiwan. All of these macro issues and others require the focus of governments which, for the past two years, have been increasingly focussed on their own, local issues.
Whilst some commentators have seen the pandemic as ushering in a less “global” economy (a move from “just in time” supply chains to “just in case”), there is no way to put the global economy “genie” back in the bottle. Whilst home-shoring is more prevalent than offshoring, global supply chains and global businesses are here to stay, the recent international agreement on corporate taxes has started the move towards a more global level playing field which must improve the prospect of global businesses being more open, transparent and responsible to all the countries in which they operate, rather than secretive and predatory.
What, hopefully, this all means is that we are about to embark upon an explosion of economic activity which benefits a far greater proportion of the world’s population than before; a renaissance in the desire to spread economic activity and benefit following the reductive focus on nationalism and insularity. As the world opens up again, politically, economically and physically (travel!) there has never been a better time to be at the forefront of this new wave of exploration, ingenuity, entrepreneurship and investment.
At Kepstorn, we look forward to working with both existing and new clients in driving forward their contribution to and participation in this bright new future.
Merry Christmas and a happy and prosperous New Year to everyone.