A version of this blog was first published on the Pamphleteers blog for Long Finance.

Prediction and Uncertainty

This article is written in March 2020 and discusses the role of foresight in exploring some of the impacts – beyond the economic – of the current Covid-19 pandemic.

All the news might push you back into  primeval brain patterns, making you think  about the pandemic,  “OMG it’s a bear!  Fight or flight?”  How could we come to perceive the pandemic as “No, it’s NOT a bear?”  This would release our energy and imagination.  As Milton Friedman said[1] “Only a crisis – perceived or actual – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. Our function is to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.” Or as we say, the Overton Window has shifted.

We don’t have experience of this pandemic, so what ideas DO we have to weather now, AND benefit after the crisis?  How do we stop seeing the bear? 

We have some experience – Spanish flu, SARS, MERS, etc. – and we know that epidemics are likely to happen.   We don’t know their size and shape, but we need to do some planning. The current Covid-19 pandemic was predicted, in the sense that, after the SARS outbreak in 2003, a number of countries built systems for containing epidemics. In Singapore, for instance, they took advantage of their previous experience with SARS and all major public hospitals in Singapore have isolation rooms so patients with suspected infectious diseases will not spread them to others.   Europe and North America didn’t adapt their health systems after previous experience with epidemics. 

In the past 50 years in most of the west, experts have been denigrated and public health systems allowed to run down.  Experts’ views that society is unprepared for a pandemic has been ignored by populism.  This lack of preparedness is prompting awareness that the planet needs a better response than the current patchy system with insufficient resilience. 

The evidence is that foresight can enable people to develop alternatives to existing policies.  Views of choices releases peoples’ energies and allows them to perceive the situation as ‘NOT a Bear’.

The role of Foresight

As Dwight D. Eisenhower famously said, “Plans are useless, but planning is indispensable.”[2]  When you have made plans for dealing with a pandemic and you find yourself in the midst of it, you are then part of it.  The plan may hold good up to the time the pandemic breaks onto the world stage, and it will get modified as it evolves. Having made a plan means that you know when it needs to be changed. And though plans may well be faulty – because they are based on data that is out of date or otherwise inaccurate – they are the best tool we have at the moment for managing the current situation. 

The role of foresight is different from the role of planning. Foresight helps you implement anticipatory action for moving forward after a pandemic hits. Foresight enables you to manage uncertainty by helping you see what you can change and influence (and what you can’t).  This helps reduce feelings of uncertainty.  It improves the quality of your decisions because you’ve thought through variations of what could happen which gives you a wider range of choices.  And it improves your capability to manage changes because you will have thought through what risks and opportunities there are based on the variations of what could happen and also how you might know which variation was occurring and happening now, so that you can implement the best response.

Using foresight, we can think about society after the pandemic: what may be different and what stays the same.

After the pandemic

As do many others, we think that the world will be very different after the pandemic has receded. Close to home, the potential for political disruption in Europe is enormous – the disjoint between national health systems has led to the closing of borders for the first time in decades. Europe’s future will depend on the ability to rebuild trust between nations. 

Below we consider three areas of global impact: economic, societal and changes in travel behaviour.

First, the economic impact can be thought of in four waves (thank you to Mark Zandi of Moody’s Analytics):

• Wave 1, the sudden stop of much economic activity devastates supply chains and cash flow sends many small businesses under;
• Then unemployment rises to unprecedented levels;
• A long term effect is on the destruction of savings for pensions through stock markets collapsing;
• And businesses cut investment as they try to recover.

We can see that though the 1 billion people across the planet at Level Four (in Hans Rosling’s terminology[3]) may be comparatively protected, the large numbers of people who have recently moved to Level Two or Level Three are likely to be highly affected. They have little economic cushion and may well lose their new incomes and savings. We think that loss of their consumer power will have the biggest impact on global recovery.

The effect on social structures may be less immediate than the economic impacts, but the pandemic has many facets which will change the world in the longer term.  Some of these phenomena are:

• The role of volunteering to work for the benefit of strangers – over 500,000 people in the UK volunteered to back up health and social care services for people at risk from Covid-19;
• The extent of scientific collaboration in life sciences has broken many barriers as companies share data, and information on the virus is shared in the literature as soon as available in the lab;
• Governments could fall if their response to the pandemic is seen as incompetent – rumours abound as we write, of what is happening in Brazil;
• Urban surveillance, mobile phone tracking and face recognition is likely to be introduced as emergency measures, and civil society will need to regulate this.
• IT platforms becoming ever more ubiquitous, reducing social face to face interaction, makes the questions about how it is regulated and who owns the data increasingly important;
• Once IT-enabled teaching has been proven to be effective, we could have a new education system;
• The agricultural ecosystem was under stress before the pandemic, and it may cause a radical change in people’s eating habits – not just through the closing of restaurants but also through changes in peoples’ tastes;
• The role of experts in contributing to policy has started to be recognised – after the rise of populism in the last 50 years.

And finally, the impacts of changes in travel behaviour are both immediate and long term: 

• Severe reduction in the amount of travel has a large direct economic impact (travel and tourism account for about 10% of world GDP);
• Globalisation is questioned;
• It changes the nature of family links, which, for several decades have often been maintained through regular flights home;
• The rise of video conferencing tools like Zoom and Skype for personal connections is being mirrored by their use in business to replace face to face meetings. Work and lifestyles will not revert when travel is again possible;
• Office space may well become an oxymoron, so property prices in city centres and industrial parks may plummet;
• There is also an environmental impact: the reduction in air pollution is visible globally;
• Reductions in travel will add to the problems faced by fossil fuel companies as they try to realign to renewables and recover from the low oil price.

Conclusion

A lot of people are saying that change is happening, the world is becoming unrecognisable.  Fewer are thinking about the second order impacts and the longer term.  As the discussion above illustrates, foresight can improve the perception of possible futures such that anticipatory action can follow.  It can help us see that what is out there is ‘NOT a bear’.  It makes clear where we have choice and influence.  This builds hope.

Patricia Lustig and Gill Ringland.  March 2020.

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[1] https://www.goodreads.com/quotes/110844-only-a-crisis—actual-or-perceived—produces-real

[2] https://www.azquotes.com/author/4403-Dwight_D_Eisenhower/tag/planning

[3] Hans Rosling et. al. Factfulness: ten reasons we’re wrong about the world – and why things are better than you think. 2018. and https://www.longfinance.net/news/pamphleteers/tale-two-middle-classes/