The initial “three-week lockdown” is now heading into its 6th month, albeit in a very different state than in March. Technically, most businesses in most locations can now open. It is, however, very definitely not business as usual, not in any industry. Businesses across all sectors, including logistics, are trying to make progress, but cannot see the road ahead.
Lack of direction from government hinders economic progress
Right now, the only businesses which are really on a secure footing are those which know that they are classed as essential. They will almost certainly be able to keep going no matter what the pandemic brings. Even here, however, security is a relative concept. All businesses need supplies of some description. Unless they can source them locally, they need to buy them in and have them delivered. That requires a functioning supply chain, often a global one.
Most other businesses are operating in a limbo. They have no idea whether or not their opening will be permanent. This makes it difficult to impossible for them to make long-term plans, especially if they require meaningful investment. In fact, for some businesses, the lack of clarity means that it is safer to stay closed, or even to close permanently. This is particularly likely if businesses need to make significant adjustments to operate in a peri-pandemic environment.
Some businesses are forced to remain closed, either because of their industry or their location. With the furlough scheme coming to an end, their situation is especially precarious.
Finding a road to economic reopening/pandemic containment
In the early days of the pandemic, it was entirely understandable that the government prioritised saving lives over saving the economy. It’s unlikely that anyone was under any illusions about the fact that there would be a hefty bill to pay later, but it was a question of priorities.
Similarly, it was also entirely understandable that the government would need time to figure out a way forward for the economy and, indeed, for society as a whole. The problem is that we are now literally months into the pandemic and yet the government still seems to lack any effective strategy for either reopening the economy or containing the pandemic.
The government needs to work with businesses not against them
One of the hard realities of government is that it’s easier to stop people from doing something to make people do something. When the lockdown was announced, businesses really had no option but to close their doors. If they hadn’t they would have been forcibly closed down and fined. Businesses do, however, very much have a choice about whether or not they reopen again and, if so, under what conditions.
In particular, knowledge industries (or knowledge-based areas within diverse industries) often have a choice between having staff work from home and having them in the office. The government can say whatever it likes about wanting office workers to go back to their desks, but at the end of the day, it is not their decision. Even if it were, they cannot force workers to spend their money at other local businesses. They may see it as far more prudent to pay down debt and/or save for a (post-Brexit) rainy day.
This means that any plan which depends on forcing businesses to take specific actions is very likely to be doomed to failure from the outset. Instead, the government needs to look at what consumers and businesses want and need in the current environment. Then it needs to work with businesses to figure out a way to deliver it.
The government (and industry) may need to accept that there is never going to be a return to the “old normal”. There may, however, be a transition to a “new normal” which works effectively for business consumers and businesses.
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