The new business reality is adapting to an environment with COVID-19. This virus has become an immovable force that business cannot resist. The impacts of the virus continue to evolve.
Earlier this week investor Bill Ackman made an emotional plea for forced quarantine. Ackman is a well-respected hedge fund manager and contrarian investor who outlined a rational case for government-imposed isolation as a method to save the economy.
His premise was simple; some businesses can survive for 30-days without revenue. No business can survive for two quarters without revenue. If we don’t stop this virus in its tracks, now, there will be no possibility of recovery.
The position is apocalyptic, but not unfounded. I support the need for immediate self-isolation as the only method to arrest this virus’s advancement. If people heed Dr. Heather Morrisons advice, we may be able to approximate quarantine on our Island. The flaw in Ackman’s approach is the duration. We will not have the ability to vaccinate the population for 18 months. In the interim do we initiate controlled infection or is the isolation extended.
Arresting an economy has never been attempted. In periods of war, economic effort is redirected not ceased. Even Winston Churchill famously reassured a nervous population by suggesting to “keep calm and carry on”, now a misunderstood meme.
If the state wishes to suspend commerce, which it has. How does the entrepreneurial spark and engaged human resource re-motivate for re-emergence?
A $25 million-dollar support fund was offered during this time of interruption, I commend Minister MacKay for his leadership in swiftly relieving some anxiety for workers and the self-employed. With $110 million flowing from Ottawa, this too will help relieve strain during uncertain times. But it will not be enough.
Depending on the duration of the business embargo, which may be several quarters, the financial impact to the economy may require ten-times the available stimulus and business confidence will take longer to repair.
What therapeutic intervention does our economy need right now? Confidence.
Assurance there is someone in charge and a plan is being devised for rapid intervention. I have ultimate comfort that the healthcare system will function adequately under these circumstances. There is great leadership and Hippocratic commitment from many quarters to remediate an untenable situation.
Absent is evident leadership. We need to see this from the Premier, with assurance from his strongest Ministers. We need to see direction from competent staff managing the function of government.
A bridge is required for business and citizens through this period, there needs to be a reliability of services and flow of goods, and we need to understand there is a plan to exit and emerge; even as the ground shifts daily. The economy needs clarity where we are heading and how we are getting there, even if the timing is unclear.
The economic consequences and costs will be great. Citizens around the globe will bear a tax burden for many years, largely because Keynesian economics has been ignored by governments.
A collective commitment is required to solve our common issue. Health management is the most important element of this crisis, but well outside the scope of this editorial. Business requires an agile and experienced force to ignite our spark with a plan for return to normalcy.
Business has experienced crisis before, perhaps not this profound, but I have ultimate confidence business will emerge swiftly as the shackles of isolation are released. Business needs direction and they will devise a plan to adapt to the circumstances.