On February 2, 2020, I received a strange message from a business contact in China regarding a trip to Beijing and Seoul I had planned for later that month. Our hosts sent a two-sentence email saying something like, "Do not come to Beijing due to the Coronavirus situation, and we urge you to reconsider your trip to Seoul."
Those early pandemic developments might be a blur today, but just one year ago, there were fewer than 200 reported Covid-19 cases in the world outside of China. The U.S. had fewer than 10 reported cases. As an economic analyst specializing in entrepreneurship, I made it my mission to understand the post-pandemic economy, working with businesses, researchers, and governments worldwide.
Now, I'm sharing what I've learned in my new book, Rebooted: An Uncommon Guide to Radical Success and Fairness in the New World of Life, Death, and Tech. It decodes the collective wisdom of founders, investors, policymakers, and technologists charting a path to our recovery.
You probably did not have the opportunity to prepare for the first wave of the pandemic, but you should prepare for the last. Here are three key takeaways that can help any entrepreneur succeed in a post-pandemic world.
We are living in two economies.
Consider these two economic scenarios:
- The economy shrinks at a nearly unprecedented rate, and the unemployment rate is the highest it has been in decades.
- Companies report record revenues and announce new hirings, smashing the expectations of Wall Street.
However counterintuitive, these two scenarios were true at the same time last year. Depending on whom you ask, 2020 was either one of the best or worst years for business. We don't always realize it, but we are living in two economies: digital and analog. One of them is accelerating, while the other is slowing down. We see this clearly in the fact that tech companies in the S&P 500 grew five times more than their non-tech peers in 2020.
For entrepreneurs, this means that the best way to thrive is to be on the right side of the digital divide. For analog-first businesses, the main opportunities come from digitizing their operations and adapting their businesses so they complement well our increasingly digital lives. Think about delivery companies thriving with e-commerce, and the small subset of restaurants growing because their quick pivot to takeout and delivery brought them more business than before. If your business is not already on the right side of the digital divide, you need to get there
What comes after the vaccine? Opportunity and risks.
Every crisis creates potential; over half of Fortune 500 companies were founded during recession years, including Hewlett-Packard (HP), which formed after the Great Depression of 1929, and Airbnb, which launched after the Great Recession of 2007. The current crisis we are living through, what I like to call the Great Reboot, is no different.
After a successful Covid-19 vaccine rollout and herd immunity is achieved, the post-pandemic years will be full of opportunities and risks. In fact, I predict that we are in for a "Roaring 2020s," full of social exuberance and economic dynamism. The reasons for this are twofold.
First, we will experience a whiplash effect. Consumers have been cooped up so long that we will crave more human interaction and engagement again, including live entertainment and travel. It's no coincidence that after the 1918 flu epidemic came the exuberance of the Roaring 1920s, a global phenomenon, and in my home country, Brazil, the "End of the World Carnival," often called the greatest and craziest carnival of all time.
Second, the pandemic sped up technological creation and adoption. In many cases, we had 10 years of technological adoption compressed into 10 weeks (e.g., retail automation and digitization). As the technologies first implemented to address the emergency lockdowns get better--from the automation of factories to higher speed connectivity to e-commerce capability--we will reap the benefits of productivity growth.
But these new opportunities do not imply things will be rosy, and this economic dynamism creates both winners and losers. In terms of jobs, our transition to the future of work will be painful and chaotic: The new jobs being created are not always available to the people losing their jobs from automation. The three most common jobs in the U.S., employing 10 million people, are retail salespeople (4.3 million), fast-food and counter workers (4 million), and cashiers (3.6 million). Many of these jobs were lost during lockdowns and will not come back. In the social sphere, our growing isolation and machine-intermediated social interactions are already leading to (and will lead to more) loneliness.
Two certainties in life: death and tech.
There's a saying that the only two certainties in life are death and taxes. In the post-pandemic world, I'd say the certainties are death and tech.
We are living through a historical transition, and one of the primary shifts from this is that tech companies are not guys and gals in a garage anymore. They are the world's major economic force. Nine out of the 10 largest companies in the world today are in technology, compared with one in 10 in 2008.
The ethos of "moving fast and breaking things" does not serve as well anymore, and with all the new opportunities come responsibility. We are on a drastically different path, and tech companies and entrepreneurs now have a large role in building a fair and equitable future.