Pandemic has caused world's economies diverged

Winners and losers
The pandemic has caused the world’s economies to diverge

But its long-term impact will be even more far-reaching

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Oct 8th 2020

Editor’s note: Some of our covid-19 coverage is free for readers of The Economist Today, our daily newsletter. For more stories and our pandemic tracker, see our hub

In february the coronavirus pandemic struck the world economy with the biggest shock since the second world war. Lockdowns and a slump in consumer spending led to a labour-market implosion in which the equivalent of nearly 500 millions full-time jobs disappeared almost overnight. World trade shuddered as factories shut down and countries closed their borders. An even deeper economic catastrophe was avoided thanks only to unprecedented interventions in financial markets by central banks, government aid to workers and failing firms, and the expansion of budget deficits to near-wartime levels.

The crash was synchronised. As a recovery takes place, however, huge gaps between the performance of countries are opening up—which could yet recast the world’s economic order. By the end of next year, according to forecasts by the oecd, America’s economy will be the same size as it was in 2019 but China’s will be 10% larger. Europe will still languish beneath its pre-pandemic level of output and could do so for several years—a fate it may share with Japan, which is suffering a demographic squeeze. It is not just the biggest economic blocs that are growing at different speeds. In the second quarter of this year, according to ubs, a bank, the distribution of growth rates across 50 economies was at its widest for at least 40 years.

The variation is the result of differences between countries. Most important is the spread of the disease. China has all but stopped it while Europe, and perhaps soon America, is battling a costly second wave. Over the past week Paris has closed its bars and Madrid has gone into partial lockdown. In China, meanwhile, you can now down sambuca shots in nightclubs. Another difference is the pre-existing structure of economies. It is far easier to operate factories under social distancing than it is to run service-sector businesses that rely on face-to-face contact. Manufacturing makes up a bigger share of the economy in China than in any other big country. A third factor is the policy response. This is partly about size: America has injected more stimulus than Europe, including spending worth 12% of gdp and a 1.5 percentage point cut in short-term interest rates. But policy also includes how governments respond to the structural changes and creative destruction the pandemic is causing.

As our special report this week explains, these adjustments will be immense. The pandemic will leave economies less globalised, more digitised and less equal. As they cut risks in their supply chains and harness automation, manufacturers will bring production closer to home. 

As office workers continue to work in their kitchens and bedrooms for at least part of the week, lower-paid workers who previously toiled as waiters, cleaners and sales assistants will need to find new jobs in the suburbs. Until they do, they could face long spells of unemployment. In America permanent job losses are mounting even as the headline unemployment rate falls (see article).

As more activity moves online, business will become more dominated by firms with the most advanced intellectual property and the biggest repositories of data; this year’s boom in technology stocks gives a sense of what is coming, as does the digital surge in the banking industry (see our leader on Ant Group). And low real interest rates will keep asset prices high even if economies remain weak. This will widen the gulf between Wall Street and Main Street that emerged after the global financial crisis and which has worsened this year. The challenge for democratic governments will be to adapt to all these changes while maintaining popular consent for their policies and for free markets.

That is not a concern for China, which so far seems to be emerging from the pandemic strongest—at least in the short run. Its economy has bounced back quickly. Later this month its leaders will agree on a new five-year plan which emphasises Xi Jinping’s model of high-tech state capitalism and increasing self-sufficiency. Yet the virus has exposed longer-term flaws in China’s economic apparatus. It has no safety-net worth the name and this year had to focus its stimulus on firms and infrastructure investment rather than shoring up household incomes. And in the long run its system of surveillance and state control, which made brutal lockdowns possible, is likely to impede the diffuse decision-making and free movement of people and ideas that sustain innovation and raise living standards.

Europe is the laggard. Its response to the pandemic risks ossifying economies there, rather than letting them adjust. In its five biggest economies, 5% of the labour force remains on short-work schemes in which the government pays them to await the return of jobs or hours that may never come back (see article). In Britain the proportion is twice as high. Across the continent, suspended bankruptcy rules, tacit forbearance by banks and a flood of discretionary state aid risk prolonging the life of zombie firms that should be allowed to fail. This is all the more worrying given that, before the crisis, France and Germany were already embracing an industrial policy that promoted national champions. If Europe sees the pandemic as a further reason to nurture a cosy relationship between government and incumbent businesses, its long-term relative decline could accelerate.

The question-mark is America. For much of the year it got the policy balance roughly right. It provided a more generous safety-net for the jobless and a larger stimulus than might have been expected in the home of capitalism. Wisely, it also allowed the labour market to adjust and has shown less inclination than Europe to bail out firms that are in danger of becoming obsolete as the economy adjusts. Partly as a result, unlike Europe, America is already seeing the creation of many new jobs.

Instead America’s weakness is toxic and divided politics. This week President Donald Trump seemed to ditch talks over renewing its stimulus, meaning that the economy could fall over a fiscal cliff. Critical reforms, whether to redesign the safety-net for a tech-driven economy or to put deficits on a sustainable course, are all but impossible while two warring tribes define compromise as weakness. Covid-19 is imposing a new economic reality. Every country will be called on to adapt, but America faces a daunting task. If it is to lead the post-pandemic world, it will have to reset its politics. ■

This article appeared in the Leaders section of the print edition under the headline "Winners and losers"

Copyright © The Economist Newspaper Limited 2020. All rights reserved.

How dining will never be the same

CEOs from Taco Bell, Blue Apron, and Momofuku reveal how they've adapted during the pandemic and 

Jennifer Ortakales, Kate Taylor, and Irene Jiang 

May 12, 2020, 9:43 PM

Andrew Bezek; Checkers & Rally's; Restaurant Brands International; Ruobing Su/Business Insider

While the food and restaurant industries have faced major setbacks during the pandemic, many companies have found ways to serve customers in new ways. 

Many predict these new ways will become the new normal. We spoke to CEOs from Momofuku, Thrive Market,  Raising Cane's, The Boston Beer Company, and others about how their companies, their industries, and the world will change after the pandemic. "For the restaurants that are able to come out and are able to survive — I think we come out a lot stronger," said Todd Graves, CEO of Raising Cane's.This feature is part of a series based on conversations with more than 200 CEOs on how business will be transformed by the coronavirus. To read more, click here. 

Consumers who previously had only a passing understanding of how restaurants and food-focused businesses work have suddenly been given a front-row seat to the inner workings of the food system. The term farm-to-table has a different meaning for consumers today after they've been bombarded with news about COVID cases in processing plants and restaurant owners who fear they'll never open their doors again. 

It isn't all bad news, though. There's a lot of new, inspired ideas coming from these businesses as well. And as many leaders see it, the pandemic has ushered in much-needed change, even if some if it is hard to process. Many businesses will close, but those that remain will be stronger and ready to serve evolving customers' tastes thanks to the adjustments they've been forced to make.  

We asked top leaders across the food and restaurant industries three questions:

How will the coronavirus change your company, your industry, and the world?

Their answers, edited for space and clarity, follow.

Linda Findley Kozlowski, CEO of Blue Apron: "While awful, this pandemic has given us the opportunity to connect with consumers in a new way."

As the world continues to grapple with the effects of coronavirus on everyday life, there is no doubt that it has been a learning experience for us, our industry, everyday consumers, and the world.

For Blue Apron as a company, it has meant being categorized as an "essential business" practically overnight, and our teams have been working hard to provide consumers food directly to their homes.

As a player in the food industry, we are now focused on enhanced safety and sanitation measures on top of our already rigorous processes [tapping into alternate forms of supply chain] and being more connected to those resources. We feel fortunate that we already had that level of visibility into our supply chain, but we believe it has become more important for consumers to understand the origin and standards applied to their food as well, which is something we have always been proud to provide.

While awful, this pandemic has given us the opportunity to connect with consumers in a new way in unusual times and bring people together over a meal even as they social distance. While we don't know what the ultimate "new normal" will be, we believe, for now, it has brought a fresh perspective to the importance of limited resources and cutting down on food waste. And most importantly, we believe it reminds people of the importance of spending time with loved ones. We feel fortunate to continue to help our customers do that — with just a few quality ingredients and the power of technology.

Frances Allen, CEO of Checkers & Rally's: "Finally, for the first time in a long time...we're actually going to see some traffic growth."

I do believe, sadly, that we will lose a lot of units. That said, I think the industry was overstored. So, I look at it as an opportunity. We're going to see — finally, for the first time in a long time — we're actually going to see some traffic growth. And hopefully, what that will mean is that these price wars that just drive down the profitability of restaurants will start to abate. That said, we are, I believe, going into a recession. So price will still be important, but we're looking at it as an opportunity to upgrade the quality of our guest experience.

One of the challenges I think the industry has faced is the labor shortage and with the closure of the units with the recession there is going to be sadly more unemployment. But it will also give us an opportunity to give jobs back to those really good crew members and general managers that's going to enable us to lift the guest experience across the board. So, I'm excited about that. 

I also think from a selfish perspective that people are going to want to return to comfort food and comfort brands. There is going to be this cocooning going on, a sort of a relief that we survived. But at the same time, wanting to embrace the things that give them comfort and there's nothing like burgers and fries as comfort food. From a selfish point of view, we're also excited to be able to lean back into that. But I think sanitation is likely to stay...The entrepreneurial activity, the omnichannel focus where people have expanded their dining rooms to curbside and take-out is going to stay. I think we'll be handing guests sanitation wipes for a long time to come.

Tariq Farid, CEO of Edible Arrangements: "Major changes can be implemented just as effectively by introducing them via video conferences, emails, instant messaging, etc."

Tariq Farid, CEO Edible Arrangements Edible Arrangements

Advances in technology were already pushing us to minimize face-to-face communication — now we've seen firsthand just how possible and even more efficient it is to accomplish important tasks remotely.

For Edible, as a franchisor, COVID-19 has reiterated to us the importance of innovating in real-time to respond to constantly-evolving consumer behaviors and needs, which also requires communicating with the owners across our franchise network more efficiently. For us and the rest of the QSR industry as a whole, we've realized in recent weeks that not every business discussion requires traveling for a face-to-face meeting; major changes can be implemented just as effectively by introducing them via video conferences, emails, instant messaging, etc.

And the same will be said for delivery of our services. The QSR space has always been heavily reliant on our brick-and-mortar presences, with the majority of businesses launching as physical storefronts before eventually introducing digital and e-commerce services. Fortunately for Edible, our e-commerce business has been one of our strongest assets throughout our 20 years of business. But as a result of COVID-19, I anticipate more QSR businesses will enhance their e-commerce capabilities for the foreseeable future, and we may even start seeing a spike in new QSR concepts introduced with a primary emphasis on ecommerce over brick-and-mortar.

I also think companies in this industry are going to have to learn to do more with less — less store locations, less hours, and fewer employees — but fortunately, technology will allow companies to do so in a way that will enhance business, not detract.

 

Beth Ford, president and CEO of Land O'Lakes: "Farming and food production are not remote occupations, they too require a surprising amount of technology."

Land O'Lakes is a farmer-owned cooperative with deep roots in rural America. We see every day what these communities do to provide the food and keep our country operating, despite enormous challenges.

The coronavirus pandemic has highlighted not only how essential these communities are to our food security, our economy, and our national security, but it has also highlighted the ways they are left behind, with fewer hospitals, grocery stores, and other crucial resources. 

Many families in rural areas don't have the high-speed broadband connection that enable the telehealth, telework, and online school services that most of us have heavily relied upon during this period of social distancing. Farming and food production are not remote occupations, they too require a surprising amount of technology and internet connectivity, which more than 19 million rural Americans do not have.

As our nation and the world begins to recover, Land O'Lakes will continue to advocate heavily for these communities — both domestically and globally— by recognizing the contributions they make and calling for better public and private investment to support them. We all have a shared destiny.

Scott Svenson, CEO of MOD Pizza: "I think opportunities for humans to connect and gather will be more important than ever."

Someone said recently that COVID-19 is going to change everything in the future. And somebody else countered, "Well, in fact, it might not change everything. It might simply accelerate the trends that were taking place anyway." And that's the view of the future that I subscribe to. The move towards digital, the move towards off-premise, the move towards convenience were things that customers were asking for. But the timeframes that brands like ours have to now adjust and adapt to that new reality have been dramatically compressed.

I think a lot of people have speculated that with the fear around the virus, that social distancing would be something that is a bigger part of our future. I think that's true, but I think opportunities for humans to connect and gather will be more important than ever. And I think it may be that they have to gather in different ways, less frequently or just differently. It will likely be that a larger percentage of our business is off-premise, delivery, drive-through, and pick up.

But I think people thrive on human connection and so we're going to have to find ways for that to continue to be a part of our daily experience. And I think for brands like MOD, trust has always been important, but I think trust is going to be a bigger part of the relationship between any brand and its consumers. Trust that we're taking care of our people, trust that we're putting the interests of the consumer, the health and wellbeing of our consumers at the forefront. I think that's going to be paramount as we come out of this and as we build our relationships with customers going forward.

Marguerite Mariscal, CEO of Momofuku, which includes Fuku, Noodle Bar, and Ssäm Bar restaurants: "For us to take better care of our employees, we need to be profitable in and outside the four walls of a restaurant."

A lot of smaller restaurants and restaurant groups sit at the intersection of art and commerce. What that translates to over the next few months, a year, and beyond is still being written. How do you keep a connection while going contactless? The Northstar will remain the same: have someone leave our spaces better than when he or she walked in. But we'll just need to reverse engineer how we get there.

The pandemic has also pushed us to approach restaurants as one of multiple revenue streams. For us to take better care of our employees, we need to be profitable in and outside the four walls of a restaurant — whether that's through takeaway, products for the home, or content to cook along to. Diversifying our income means a more stable financial picture and better advantages for our teams in and out of crisis.

The last month has shone a light on some of the industry's practices that were previously barely tenable in the first place. We are hopefully going to see a reform that will better position restaurants, even after there's a vaccine. The worst thing a restaurant can do is go back to "normal." We need to all use this time to reevaluate industry standards. Does a tipped wage still make sense when a larger percentage of revenue will come from takeaway and delivery? Are delivery fees–sometimes up to 30%–defensible when takeaway is a restaurant's only source of income? Now is the time to recalibrate and come out stronger.

Todd Graves, CEO of Raising Cane's: "I think people are going to actually trust restaurants more than before the pandemic."

I think the industry comes out stronger. Now, there's going to be obviously closures that never come back. And I can generally say my heart goes out to these independents. These are restaurants that have soul, they have character. Their crew members are incredible. And I go to them all the time and some of them are not going to be able to reemerge and that's the tragedy for our industry that's going to come out of COVID. Now for the restaurants that are able to come out and are able to survive — I think we come out a lot stronger. 

When you go through something like this, I saw that with Hurricane Katrina, you have these team members that all say, 'Hey, we got through this together and we can do this.' There's a deeper connection with your customers, your communities, and your own business.

I think all these incredible ideas that are coming out ... are going to stay. This curbside delivery for restaurants that don't have drive-thrus – I think it's going to become a quick way to get people meals. I think we're going to be as an industry heightened sense of sanitization and making sure we're delivering food-safe products and keeping our crew members safe. So as a whole, I think people are going to actually trust restaurants more than before the pandemic.

Jose Cil, CEO of Restaurant Brands International, parent company to Burger King, Popeyes, and Tim Hortons: "We've never communicated more frequently or efficiently with franchisees and employees as we have in the last two months."

In many ways, the COVID-19 crisis accelerated much-needed change.

As a result of these trying times, we've become much better communicators to both our employees and franchisees, while enhancing the guest experience through digital platforms. We've never communicated more frequently or efficiently with franchisees and employees as we have in the last two months. Additionally, we were quickly able to evolve our digital infrastructure to meet our guests in their newfound realities by rapidly expanding the availability of delivery and curbside pickup, and enhancing our mobile app platforms across our brands. We believe the relationships we have with franchisees, employees, and loyal guests have all been strengthened as a result.

When it comes to the QSR industry, we see drive-thru and home delivery remaining as an essential part of the business. During this crisis, sales through the drive-thru continue to be strong and performing well on a year-over-year basis, as our guests access our products in a convenient and, more importantly, safe safer way. As more and more people stay at home to help combat COVID-19, we have seen a significant increase in home delivery. At Tim's in Canada, we brought over 1,000 restaurants online with delivery in just three months. In the US, the vast majority of our restaurants offer delivery through Uber Eats, Door Dash, Grubhub, Postmates, and our own delivery option on the Burger King/Popeyes mobile apps and websites. This is an excellent way for people to continue enjoying the best of our food without having to leave home.

 

Dave Hirz, CEO of Smart & Final: "The product supply challenges that grocery retailers have been experiencing during this pandemic have highlighted the downside of just-in-time inventory management."

Dave Hirz Smart & Final

The grocery industry is operating dramatically different than it was just 10 weeks ago.

Grocery shopping habits have changed in a way that will continue to impact our industry

for years to come. People are eating at home more than ever before. 

Prior to this pandemic, customers spent roughly 50 percent of their food dollars at home and 50 percent away from home. 

While the percentage of meals at home will decrease as the foodservice industry starts to reopen, the trend of eating at home could continue well into 2021, as

customers will be cautious about getting back to normal too quickly.

Before the COVID-19 pandemic, customers typically shopped for their groceries at up to

three or four different stores. Now, to increase social distancing and reduce exposure,

they're shopping less frequently, consolidating their trips to fewer grocery stores, and

purchasing more on each trip. The trends of larger basket sizes, making fewer trips and

visiting fewer locations will become the new normal for many customers, as will the

increase in purchasing of hand sanitizers, disinfectants, bleach and cleaning supplies as

recently acquired habits become permanent.

Many of the cleaning, safety, and distancing protocols implemented at stores will

continue in the future. While some of the customer spacing protocols will be reduced,

more attention will be paid to allow for greater social distancing and the enhanced

attention to cleaning "high touch-point" surfaces will be more of a focus going forward.

The product supply challenges that grocery retailers have been experiencing during this

pandemic have highlighted the downside of just-in-time inventory management, and this

will need to be reconsidered moving forward. Similarly, the amount of safety stock

historically considered sufficient will be reevaluated in the new post-pandemic

environment.

Mark King, CEO of Taco Bell: We're already seeing a lot of changes in the restaurant industry in Asia that will inform how we reopen our industry in the US."

Taco Bell

It's said a lot, but it's important to remember this is an unprecedented time and everything is changing and evolving so rapidly. One thing that hasn't changed is that the safety of our team members and customers remains our top priority. We're grateful that our operating system is incredibly flexible, and while we don't know exactly what the future will look like, we will be able to accommodate changes we need to make in order to keep our restaurants safe for everyone. Our research shows that customer behaviors changing today that make life easier and safer will be the behaviors that carry out into the future — like delivery and mobile ordering, as well as contactless payment and service.

We're already seeing a lot of changes in the restaurant industry in Asia that will inform how we reopen our industry in the US. Restaurants will have to make adjustments to seating areas, offer more sanitation options at high-frequency touchpoints and protective shields at counters so customers continue to feel safe. Team members will expect their employers to continue to provide protective gear like gloves and masks to ensure they are being taken care of, and the industry will continue to offer much less contact throughout the experience, including delivery and drive-thru. Overall, the restaurant industry will need to adapt to the needs of people in order to survive.

 

Dave Burwick, President and CEO of The Boston Beer Company: "We have a long road ahead. Reopening of states will be fractured, complex, and challenging."

For the craft beer industry, we have a long road ahead. Reopening of states will be fractured, complex, and challenging. Bars and restaurants, including our own taprooms, will have a slow return to a new "normal." That means we have to reevaluate how we call on and support our customers, and how we work together. We'll continue to rely on technology and new thinking to perform our jobs. And at least until there's a vaccine, we expect to be traveling less on planes and not interacting with large groups of people. 

These are uncharted waters, but our Boston Beer coworkers are resilient and we are finding ways to tap into our reserves of ingenuity, imagination, and problem-solving.  We're working hard, using all of our creativity and problem-solving skills to develop a plan that includes supporting our industry as it rebuilds, while continuing to provide drinkers with great beers, hard seltzer, hard cider, and hard iced tea.

We will continue to lean on our core strengths, which remain unchanged — our unique, passionate culture reinforced by Jim Koch and Sam Calagione, our diverse portfolio of brands positioned towards growth, and our #1 Sales organization in the industry. Although the world around us has shifted, our values remain the same, and one of those core values is "We are the Boston Beer Company and together we are heavy."

Nick Green, CEO and cofounder of Thrive Market: "We all need to be conscious consumers."

A lot has been written about the way the COVID-19 crisis has accelerated adoption of online grocery shopping. This is clear. In February, 5% of Americans bought groceries online; in March, 35% did. Even if half those people go back, we're likely to see a 4x increase in online grocery shopping in the "new normal."

As an online store known for the highest quality healthy and sustainable groceries, we've seen this trend first-hand at Thrive Market.

But we've also witnessed the acceleration of another consumer trend that we think is even more important: conscious consumption.

We're all thinking about the safety of the food we buy, about where it comes from, and whether it is clean and healthy. 

We're all suddenly aware that the products delivered to our homes are handled by people and we're wondering, "are they safe and healthy, for their sake and ours?" And at a time of so much uncertainty, we're all looking for brands and retailers we can trust - who deliver value but who also share our values.

At a moment when our world faces big problems beyond the pandemic, problems like growing inequality and the global climate crisis, we all need to be conscious consumers.

 

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How Coronavirus will Reshape Healthcare Industry

How the coronavirus will permanently reshape the healthcare industry, according to 26 top industry leaders

Jun 24, 2020, 9:50 PM

From left to right: CVS Health CEO Larry Merlo, Bristol Myers Squibb CEO Giovanni Caforio, Epic Systems CEO Judy Faulkner, and Kaiser Permanente CEO Gregory Adams. CVS Health; Bristol Myers Squibb; Epic Systems; Kaiser Permanente; Shayanne Gal/Business Insider

The healthcare industry is on the front lines of the effort to treat coronavirus patients and cure the disease.The pandemic presents unprecedented challenges for the entire industry, from doctors and hospitals to drugmakers.We talked to 26 top leaders in healthcare about how the pandemic is changing their companies, the industry, and the world.This feature is part of a series based on conversations with more than 200 CEOs on how business will be transformed by the coronavirus. To read more, click here. 

The healthcare industry has been forced to confront the scourge of the coronavirus like no other part of the US economy.

Healthcare workers are on the front lines of the battle against the pandemic, treating sick patients flooding hospitals. At the same time, the outbreak halted many of the most lucrative parts of the industry, such as surgeries and procedures, threatening the financial futures of hospitals and leading to pay cuts and furloughs for workers.

Even as visits and procedures start to resume, doctors are taking extra precautions, limiting the number of patients they can see and raising the cost. Online visits seem to have carved out a permanent place in the system, too.

Meanwhile, biotech and pharmaceutical companies are scrambling to come up with a treatment or a vaccine to halt the coronavirus. More than 140 vaccines are in the works, and dozens of drugmakers are working on treatments for the coronavirus.

At the same time, coronavirus has exposed the industry's vulnerabilities: hospitals ran short of protective gear, leaving workers without masks and gowns to protect them from the virus. While the worst predictions haven't materialized, hospitals in hard-hit areas took extraordinary measures to make space for coronavirus patients, turning lobbies and surgery suites into rooms for patients.

Never miss out on healthcare news. Subscribe to Dispensed, Business Insider's weekly newsletter on pharma, biotech, and healthcare.

Some of the industry's challenges, though, aren't unique. Doctors and nurses are trying to figure out how much of their work they can do over video and by phone, a task similar to the one facing office workers worldwide. And more broadly, executives are trying to navigate a future in which more work, and more healthcare, happens virtually. 

We asked top leaders across healthcare three questions:

How will the coronavirus change your company, your industry, and the world.

Their answers, edited for length and clarity, follow. 

This article was published on May 12 and has been updated.

Ido Schoenberg, co-CEO of American Well: 'We are in for a challenging period as a nation.'

Ido Schoenberg. American Well

People tend to think that the main challenge of this crisis relates to the viral infection, but the biggest burden has actually been on traditional care. The seniors and those who are chronically ill are suddenly stuck at home. Their ability to access the care they need through technology has been an enormous relief.

The demand for telehealth skyrocketed. On average we are now operating at more than 10 times last year. There were lots of barriers that prevented this wonderful tool from being truly adopted that have since been removed.

The current crisis is horrific. It's horrific from a health standpoint. It's also horrific from an economic standpoint. We see that many people are losing their jobs. Many businesses may or may not survive this. And a recession is likely.

In a situation like that, lots of problems happen, right? Healthcare is funded by a lot of self-insured employers, for example. Healthcare is funded by the government, and the government may have a lot on its plate going forward. So I think that we are in for a challenging period as a nation, and everybody will feel the impact in one way or another.

But telehealth is also very, very efficient. And there is a lot to be said about the enormous clinical waste that we see in healthcare today.

Digital connectivity isn't just about videoconferencing. 

That ability to connect data from patients, move it into the cloud, analyze it in real time, and send the right intervention back into their most convenient location, which typically is the home, is this fundamental change. 

And there is a word for that. What you are going to see is the democratization of healthcare.

Giovanni Caforio, CEO of Bristol Myers Squibb: 'We are learning valuable lessons on being nimble, collaborating in new ways and leveraging talent.'

Bristol-Myers Squibb CEO Giovanni Caforio Getty Images

COVID-19 has the potential to enhance the strong collaboration among academia, government and other companies as we focus on treatments and vaccines for the virus.

During this pandemic, it has been abundantly clear that the biopharma industry plays a critical role in the prevention and treatment of viruses like COVID-19. Our industry is working around the clock to find treatments and a vaccine and we are sharing those findings with governments and other companies.

I believe that our ability to partner with other scientific organizations, our development expertise and manufacturing capabilities are what will ultimately help us treat and prevent this virus, and I have been impressed by the collaboration and speed with which our industry is responding. My hope is that collaboration will continue. 

As I reflect personally, I see that the COVID-19 pandemic has affected our society and communities and caused everyone to look at life differently.  The virus has brought out some of the best in humanity, through a strong focus on philanthropy and relief efforts, science and innovation, and incredible support for the health care workers and those on the front lines.

This is an unprecedented time and it is my belief that we are learning valuable lessons on being nimble, collaborating in new ways and leveraging talent in new and different ways. Understanding that every person is navigating this crisis with a different personal reality, our work policies account for flexible hours and schedules, which enables our colleagues to better juggle their responsibilities at home with work.

We are open to taking these lessons and applying them to work in the future. I believe we will be an even stronger company because of the pandemic.

Mark Ganz, CEO of Cambia Health Solutions: 'We're going to have a mental health epidemic that's going to follow this virus.'

Mark Ganz, CEO of Cambia Health Solutions Cambia Health Solutions

We will be probably more of a remote-working company than we were before, because we will learn that we can.

We're going to have a mental health epidemic that's going to follow this virus. We've put a lot of thought into how can we proactively work to address that.

There's an opportunity for this country to realize that mental health and physical health are not so different. They are completely interrelated and one of the paths to people getting physically healthy is going to be paying better attention to their mental health. 

We are in the middle of a game change around more convenient forms of care. 

Why is it that when someone's sick, they must go to the bricks and mortar palace, wait in a waiting room for a long time and then be told, Oh, the doctor will see you now. We could do better than that.

I believe that the only way we're going to come up with a resilient, long term workable solution is going to be public-private partnerships work where businesses can kind of work cheek to jowl or hand to glove with public health agencies and we solve these challenges together.

I'm hopeful that one of the things that will come out of this is that there'll be a reset of the social compact between those in 'the healthcare industry' and those who we serve and that it will be much more focused on the human experience and recognizing that what we're supposed to be doing is taking care of the individual. 

[I'm hopeful that COVID] will unleash a human centered level of innovation because we have to have that in order to be able to get through this. As hard as the Great Depression was, that was also what bore the greatest generation. I believe that something like that is at work here.

Seema Verma, administrator of the Centers for Medicare and Medicaid Services: 'Our focus is on providing high-quality care.'

Seema Verma, administrator at the Centers for Medicare and Medicaid Services Michael Brochstein/SOPA Images/LightRocket via Getty Images

We're having those conversations [with health systems and insurers].

One example that we hear about all the time is telehealth, and that's a great example of a service that is creating greater flexibility and accessibility for our patients. And so we're continuing as part of this effort to really think about what should be maintained and what is part of our longstanding effort, "Patients over Paperwork." That really fits into a lot of what we've been trying to accomplish over the last three years.

We continue to hear from healthcare providers on the front lines about what's burdensome. It has created a lot of discussion even within CMS about some of these items — do they really need to be continued? We will be assessing this fully after we get past the pandemic. 

One of the things that we're also focused on is to make sure that we have strong program integrity and that the changes that we make aren't going to have a negative impact on the Medicare trust fund. Our focus is on providing high-quality care and making sure that we are leveraging technology and modernizing the program to provide high-quality care to our Medicare beneficiaries.

Brent Shafer, CEO of Cerner: 'It's like the foundation is there, the wiring has been laid, but often it's not utilized to its fullest extent'

Brent Shafer. Cerner

Moving our almost 30,000 employees to a virtual organization — while also helping providers address different surges and needs around the world — has been a very intense effort. 

We deal with about 250 million patient records from around the world. And there's about 3 million users on our systems each day. Putting providers in a position where they can deliver the care that's needed through this is really key.

We often say that, in a way, healthcare is mostly digitized — because we were one of the companies that helped to make that happen. On the other hand, it's like the foundation is there, the wiring has been laid, but often it's not utilized to its fullest extent.

When put to use, it can accomplish a great deal. A health system in Seattle, for instance, was one of the first hit with a surge of coronavirus patients in the US. Through a forum on Cerner's platform for patient data, they were then able to share some of their emergency department protocols with a broader group of providers.

I think healthcare groups around the world will show more interest in really using the capabilities around data analytics. So that they can then anticipate what's coming, anticipate the needs, and look at the health of populations in a more organized way than we have in the past.

Neil de Crescenzo, CEO of Change Healthcare: 'Things are just moving a lot faster than they used to.'

Neil de Crescenzo. Change Healthcare

Everybody in the country is trying to figure out what's going on with the spread of COVID, literally on a daily, if not hourly basis. And historically, the healthcare system hasn't been that dynamic or fluid.

There's about $350 billion of payments made to providers with paper checks in this country.

We've been working with our customers to make all of that electronic for a long time, but suddenly — when they're looking at how to minimize the need for people to come into the office — it becomes an even bigger priority. We've also helped people virtually enroll for Medicaid or disability using capabilities like DocuSign. A lot of the regulators required things to be done in person, but now people are finally doing away with those restrictions.

Whether it's operating the clinic or the hospital, whether it's dealing with getting people the financial support they need, or even having payments be facilitated between payers and providers — things are just moving a lot faster than they used to.

Hospitals and regulators have had to adapt very quickly to greater data liquidity and the capabilities we provide to put that data in the hands of anybody, with appropriate consent, who needs it. They're realizing that we, perhaps, should have been even more aggressive and in that coming to pass. And I think that ethos will remain long after the crisis is over.

Janice Nevin, CEO of ChristianaCare: 'We accomplished two to three years of work in about two to three weeks.'

Dr. Janice Nevin, CEO of ChristianaCare Courtesy of ChristianaCare

Our pre-COVID mantra was: "Everything that can be digital will be digital. Everything that can be done in the home will be done in the home."

We expected that work to be the core of our next several years' strategic plan. We accomplished two to three years of work in about two to three weeks once we found ourselves needing to address the COVID-19 issues.

We had one virtual practice. We now have 160 virtual practice sites. We also have a sophisticated data platform called CareVio that aggregates, analyzes, and uses predictive analytics to set alerts to manage populations.

We created a COVID-19 monitoring practice that uses secure texting and alerts to elevate a patient who has a deterioration in their symptoms to do a virtual visit for appropriate management. 

One of my colleagues said, "Now that the genie is out of the bottle, we won't be putting it back in."

I do see providers and patients who are now having a very different experience. They will want to continue to have that experience and to be able to get significant parts of their care digitally from home.

Everything we learned about managing COVID-19 on the virtual monitoring practice can be applied to multiple chronic diseases, including diabetes, congestive heart failure, chronic obstructive pulmonary disease, and asthma. 

This move to digital technology, to a virtual platform, will be something that the industry as a whole will embrace to various levels of sophistication depending on where a particular health system might have been before this. This is one of the ways that we create value, impact health, and make care more affordable. 

The other thing that we've learned from this experience is how hospitals play an incredible role in the public health infrastructure and the economy in their communities.

Steve Miller, chief medical officer of Cigna: 'This is actually going to be the permanent opportunity to lower the cost, improve the quality of healthcare.'

Express Scripts Chief Medical Officer Steve Miller Reuters

There's going to be actually some really interesting, good things for healthcare to come out of this.

We really believed that telehealth was going to be important for the future. But as you know, telehealth was off to a really slow start. But now it has gone nuts. The amount of telehealth we're doing now is extraordinary.

We believe that this is actually going to be the permanent opportunity to lower the cost, improve the quality of healthcare.

We've seen an explosion in mail-order pharmacy. So people truly are taking advantage of not only the longer fill you get, the 90-day fill that gives you piece of mind for supply, but they loved the idea that it comes directly to their home. 

Because we have employer-based healthcare in the US, people losing or having to shift their benefit obviously is a challenge for us. We're seeing a real growth in people moving to the exchanges and also we've developed pharmacy capabilities for those recently unemployed.

I think what we're seeing is a level of cooperation both within the industry but also with our provider partners. I think that some of it will go back towards normal when the crisis passes because this is a really expensive way to manage healthcare. 

For the industry we're going to see both challenges, challenges by more people moving to the exchanges. more people moving to Medicaid. But we're going to see advances that are actually going to make for better healthcare system that's lower in cost and personalized. 

We were all moving towards more common areas. Now if you actually have a private office you're feeling a little better about it. We're going to need quite a while until we have a vaccine, so how you social distance in the worksite is going to change.

Tom Mihaljevic, CEO of Cleveland Clinic: 'We are going to see the resurgence of manufacturing domestically.'

Dr. Tomislav Mihaljevic, president and CEO of Cleveland Clinic Courtesy of Cleveland Clinic

Before the pandemic, about 2% of our visits were based on the digital interface. Right now, 75% of our ambulatory care is being provided through digital. That's definitely here to stay.

What is also going to change is that a lot of care will be delivered at home rather than in hospital to keep the hospital environment safe as well as patients way less exposed to infections like this. 

Every country, the US in particular, will make sure our dependency to provide healthcare isn't completely dependent on getting supplies from foreign sources. We are going to see the resurgence of manufacturing domestically that will provide critically important items, including pharmaceuticals, personal protective equipment, and technology. This will allow us to be not so easily exposed to the shortages that we're currently experiencing. 

We are very likely going to see an accelerated decline in individual private practices or group practices that will simply not be able to withstand the financial pressures of a large pandemic like this.

We're going to see fewer, yet larger, integrated healthcare delivery systems that will be caring for a larger number of patients, and a declining number of smaller systems and some smaller standalone hospitals as well.

People about to start their medical careers will be thinking twice about whether they're going to go into a private practice or join a large integrated healthcare system. One reason is financial, but the other reason is the dependency of technology.

Provision of care through telemedicine, through data analytics and artificial intelligence, is going to be difficult to source if you're a private practitioner. A large integrated healthcare delivery system has the ability to provide the tools for the delivery of 21st century healthcare.

Lloyd Dean, CEO of CommonSpirit Health: 'We must more effectively meet patients where they are.'

Lloyd H Dean CEO of CommonSpirit Health CommonSpirit Health

The new future will be one in which our operations will need to anticipate and meet the demand of rapid surges. Our sustained resilience in the face of unanticipated stresses on our system is going to be more important than ever.

We are taking the lessons from these past few months and undergoing serious planning so we can flex our system in ways we haven't needed to in more than a generation.

More than ever, the spread of COVID-19 has also brought to light how much our health depends on the local environment around us. Healthcare should be more responsive to the needs of everyone, especially vulnerable and underserved populations who have been disproportionately affected by this virus.

We must more effectively meet patients where they are when mobility is limited if brick and mortar care sites are impaired for any reason. One of the positive things that can come out of this tragic pandemic is if we use data to target necessary health services locally and make care more convenient and accessible to our communities.

We now have the tremendous duty to walk with our most vulnerable patients through their medical, behavioral, and social health needs that may have gone unattended during this crisis. My greatest hope is that we will rebuild the healthcare system so that it is stronger and serves all people.

As a global society, there is a realization that we aren't invincible. All of the benefits of our global economy also left us more exposed to the transmission of viruses such as COVID-19. We need to prioritize cooperation on a global scale to ensure early monitoring and detection of outbreaks.

Larry Merlo, CEO of CVS Health: 'We're reaching consumers, we're helping them stay safe'

CVS Health CEO Larry Merlo Courtesy Forbes

We've got a new strategy as part of CVS and Aetna becoming one company. For us it's really more about the affirmation of the strategy, the role that we want to play in people's health. 

We're reaching consumers, we're helping them stay safe. We've waived fees around home delivery, we increased access to critical offerings like telemedicine. We are confident that the strategy that we've been working on building is the right one for the future. This convenience-based model, it's not going to go away.

A lot of what we're doing will become part of the new normal. 

We've talked about three important goals as part of that strategy. The first one being local, whether it's in the community, in the home, work, or now for many in the palm of their hand through digital devices.

We're seeing terrific examples of public-private partnerships. Obviously there's a lot of discussion currently in the news around the role of testing. Are we adequately testing people today? What will be testing needs for the future?

We've forged partnerships, both at a federal and state level in terms of responding to the needs for testing.

That's something that we absolutely don't want to lose. The private sector plays a critically important role in innovation and competition. I hope we can continue to capitalize on any opportunities that can create to bring solutions to unmet needs. 

The world has to work together to avoid the next pandemic. I hope that's something that all of us will never forget what we're experiencing, and how we can avoid that.

Judy Faulkner, CEO of Epic Systems: 'There are going to be bankruptcies. It's going to be a tough, tough time.'

Judy Faulkner. Epic Systems

The health systems in general are in financial distress right now. So that's going to affect their staffing levels and morale, their capital expenditures, and their operating expenditures. There are going to be bankruptcies. It's going to be a tough, tough time.

A lot of our customers have seen a 35% to 55% drop in revenue. That's a lot. And if you do that month after month, you can't keep affording to pay your staff. So that's going to be a big problem. There's already been at least one bankruptcy. And there'll be mergers and acquisitions, as some of the smaller providers will get purchased by larger health systems who can afford to stay afloat.

There may be more interest in doing HMOs and other arrangements where the patients are capitated, because those folks didn't get hit as hard financially. Because they get paid a regular amount every month, and it doesn't matter whether there's a virus.

There's a lot of nice things, too, and more creative thinking. There's been better reimbursement models for digital health, new infection control processes, and far more video visits. We calculated there are 100 times as many video visits as there were in months before the pandemic.

We'll see more remote training, remote patient monitoring, and faster implementations of technology. We ended up doing a whole bunch of implementations in three to five days. They normally take months. We did the Javits Center in New York, we did McCormick Place in Chicago, we did the Navy ship Comfort — all in just a few days. 

I think there'll be more of a focus on public health surveillance and more of a focus, too, on capacity and resource management. For Epic, I think that we will be helping some of the governments in the states and maybe the federal government with their health information.

Jaewon Ryu, CEO of Geisinger: 'Hospitals will think about their supply chain differently.'

Dr. Jaewon Ryu, CEO of Geisinger Geisinger

What will we do differently coming out of COVID? I actually think communication. I always thought we did it pretty well, but wow. We never could have imagined how much we could take it to a different level.

[On telemedicine and mail order pharmacy program] The program has just kicked into a different gear as a result of COVID. And I don't think that we'll go back on that because once consumers, once patients have a taste of the convenience andof the experience itself, I don't see them going backwards.

I do think hospitals will think about their supply chain differently. The name of the game in supply chain was always 'just in time supply' and making sure that you didn't keep too much of an inventory.

But I think this has made most hospitals think about, well that may be fine, but then you've got to be able to tap on a whole lot more capacity in your supply chain pretty quickly in the event you face an emergency.

I think this will change the whole world, but it's this notion that we're all in it together. I do think there's more of that. I see more systems working together. I see more folks working together.

I think going to large, crowded kinds of environments, even after we're on the other side of COVID, I think people will exercise a little more caution before they're going to the big venues.

I think people will be a lot more careful around things like hand hygiene, keeping surfaces clean and, and covering their mouths if they're coughing or sneezing.

George Hager Jr, CEO of Genesis HealthCare: 'Our industry will be much better prepared for the next pandemic.'

George Hager Jr, CEO of Genesis HealthCare Courtesy of Genesis HealthCare

We will make sure in our emergency planning that we have a greater ability to cohort patients and isolate patients upon admission that are potentially COVID-positive or are impacted by whatever the next pandemic is, so that we can do a better job — a more effective job — of protecting that part of our population that is already frail and compromised in the skilled nursing setting from those affected by the virus.

We have at least five facilities that are dedicated COVID-only buildings. We are admitting directly from the hospital patients that have tested positive for COVID-19. Concerns you have here, especially in your hotspots, is that the hospital beds get backed up, and there needs to be a discharge source that is a protected and safe site of service for those patients that tested positive but are stable.

Our industry will be much better prepared for the next pandemic, and we will be able to react much more quickly, to create and establish those dedicated units that are isolated from the rest of a population that is congregating in an institutional setting.

We have a segment of our business that we call PowerBack, which was constructed more recently to handle a short-term, more therapy-oriented population. They're all private rooms. The common space is much larger. The clinical capabilities in these buildings are typically much higher, with a much greater presence of physicians and physician-extender type of clinical skill. The average length of stay in those buildings is 15 to 20 days. 

We know that if we have a pending crisis, what we could do now empty those buildings out very quickly and have them ready — in relatively short notice — to accept affected people by any infectious disease or virus.

David Feinberg, the head of Google Health: 'Access to the right information, at the right time, can save lives.'

Dr. David Feinberg, the head of Google Health Courtesy HLTH

We learn a lot during times like this. It can help us break through the status quo and support efficiencies and innovations that mean better care and outcomes.

For example, it's amazing to see the quick and massive rise of virtual care, coupled with regulatory support for doctors practicing across state lines, that have arisen due to providers reducing or ceasing in-person visits.

The pandemic has also brought to the forefront the usefulness of data towards anticipating healthcare needs and resource allocation. Just as public health authorities cast a wide net to understand COVID-19 and what public and environmental factors may help in predicting its spread, there will be a greater appreciation for how data could also help communities respond to other conditions — whether that's cancer, heart disease, diabetics, poor nutrition, and more.

I think that the industry will come away with more interest, and higher expectations.

We think about how we can bring the best of Google expertise, people and technologies to help connect people to the right resources when they're sick, keep them healthy, and solve big healthcare challenges. In times of an emerging global health threat, this means doing things like boosting authoritative content in Search and YouTube tailored to people's information needs around the pandemic and helping people connect to safe and convenient virtual care.

Access to the right information, at the right time, can save lives. In addition to Google's Cloud offerings for healthcare, we've also been able to stand up new initiatives to help public health officials respond to COVID-19.

I am particularly proud of our COVID-19 Community Mobility Reports which uses anonymized, aggregated location data to help officials make decisions to prevent further spread of the virus.

William Fleming, president of Humana's clinical and pharmacy solutions segment: 'We need to take telehealth to the next level.'

Humana segment president of Humana’s clinical and pharmacy solutions William Fleming Humana

The transformational power of telehealth was steadily rising prior to the pandemic, but its usage has significantly accelerated. If a primary care practice wasn't using telehealth six weeks ago, chances are it is well-versed in it today. 

At Humana, we've been on the telehealth journey for some time, but we need to take telehealth to the next level so we can improve both health and health care.

Now, more than ever, the general public understands and can empathize with things like social isolation. We've long identified this as a social determinant of health that, in particular, affects seniors in our society. But today, it's more real for many of us.

Going forward, we will be able to work in a different, and hopefully more accepting, way to provide whole-person health care – care that encompasses both body and mind, taking into account the many social factors that play a significant role in our overall health and well-being. 

The world needs to be prepared for the potential re-emergence of the coronavirus, either later this year or in 2021. We have a real-world case for change, and it starts with industry and government enhancing our innovation and readiness. This will enable us to build stronger partnerships that will help physicians and other clinicians protect people from the virus as we race towards new treatments and a vaccine.

We have all been reminded about the importance of caring for one another.

Economist : The future of the officeCovid-19 has forced a radical shift in working habits

The future of the office
Covid-19 has forced a radical shift in working habits

Mostly for the better

BriefingSep 12th 2020 edition

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Sep 12th 2020

Self-styled visionaries and people particularly fond of their pyjamas have for decades been arguing that a lot of work done in large shared offices could better be done at home. With covid-19 their ideas were put to the test in a huge if not randomised trial. The preliminary results are now in: yes, a lot of work can be done at home; and what is more, many people seem to prefer doing it there.

This does not, in itself, mean the end of the non-home office. It does mean that there is a live debate to be had. Some companies appear relaxed about a domestic shift. On August 28th Pinterest, a social-media firm, paid $90m to end a new lease obligation on office space near its headquarters in San Francisco to create a “more distributed workforce”. Others seem to be against it. Also that month, Facebook signed a new lease on a big office in Manhattan. Bloomberg is reportedly offering a stipend of up to £55 ($75) a day to get its workers back to its building in London. Governments, on which some of the burden will fall if the pandemic persists, are taking a similar tack, encouraging people “back to work”—by which they mean “back to the office”.

They face a difficult task. For working from home seems to have suited many white-collar employees. As lockdowns have eased, people have gone out into the world once more: retail spending has jumped across the rich world while restaurant reservations have sharply risen. Yet many continue to shun the office, even as schools reopen and thus make it a more feasible option for working parents. The latest data suggest that only 50% of people in five big European countries spend every work-day in the office (see chart 1). A quarter remain at home full-time.

This may be due to the residual fear of covid-19 and the inconvenience of reduced-capacity offices. Until social-distancing guidance ends, offices cannot work at full steam. The average office can work with 25-60% of its staff while maintaining a two-metre (six-foot) distance between workers. Offices which span more than five floors rely on lifts; the queues for access, when only two people are allowed inside one, can stretch around the block.

Some offices are trying to make themselves safer places to work. The managers of a new skyscraper in London, 22 Bishopsgate, have switched off its recirculated air-conditioning. Others have installed hand-sanitising stations and put up plastic barriers. But even if offices are safer, it can still be hard to get there. Many employees do not want to or are discouraged from using public transport—and one-quarter of commuters in New York City live more than 15 miles (24km) from the office, too far to walk or cycle.

However it also appears to be the case that working from home can make people happier. A paper published in 2017 in the American Economic Review found that workers were willing to accept an 8% pay cut to work from home, suggesting it gives them non-monetary benefits. Average meeting lengths appear to decline (see chart 2). And people commute less, or not at all. That is great for wellbeing. A study from 2004 by Daniel Kahneman of Princeton University and colleagues found that commuting was among the least enjoyable activities that people regularly did. Britain’s Office for National Statistics has found that “commuters have lower life satisfaction...lower levels of happiness and higher anxiety on average than non-commuters” (see article).

The working-from-home happiness boost could, in turn, make workers more productive. In most countries the average worker reports that, under lockdown, she got more done than she would have in the office. In the current circumstances, however, it is hard to be sure whether home-working or office-working is more efficient. Many people, particularly women, have had to work while caring for children who would normally be in school. That might make it seem as though working from home was less productive than it could theoretically be (ie, when the kids were in school).

Tumble outta bed into the kitchen

But there are lockdown-specific effects which create the opposite bias, making work-from-home seem artificially productive. During lockdown workers may have upped their game for fear of being let go by their company—evidence from America suggests that more than half of workers are worried about losing their job due to the outbreak. A separate problem is that most studies under lockdown have relied on workers to self-report their productivity, and the data generated in this way tend not to be very reliable.

Research published before the pandemic provides a clearer picture. A study in 2015 by Nicholas Bloom of Stanford University and his colleagues looked at Chinese call-centre workers. They found that those who worked from home were more productive (they processed more calls). One-third of the increase was due to having a quieter environment. The rest was due to people working more hours. Sick days for employees plummeted. Another study, looking at workers at America’s Patent and Trademark Office, found similar results. A study in 2007 from America’s Bureau of Labour Statistics found that home-workers are paid a tad more than equivalent office workers, suggesting higher productivity.

The experience of lockdown has simply accelerated pre-existing trends, thinks Harry Badham, the developer of 22 Bishopsgate. That may be an understatement. Although the share of people regularly working from home was rising before the pandemic, absolute numbers remained small (see chart 3). According to one view, the fact that office-working was so dominant until recently reveals that it must be more efficient than home-based work both for firms and for workers. By this logic the success of a country’s emergence from lockdown can be measured by how many people are back at their desks.

But there is another interpretation. This says that home-working is actually more efficient than office-work, and that the glory days of the office are gone. The office, after all, came into being when the world of work involved processing lots of paper. The fact that it remained so dominant for so long may instead reflect a market failure. Before covid-19 the world may have been stuck in a “bad equilibrium” in which home-work was less prevalent than it should have been. The pandemic represents an enormous shock which is putting the world into a new, better equilibrium.

Brent Neiman of the University of Chicago suggests three factors which prevented the growth of home-working before now. The first relates to information. Bosses simply did not know whether clustering in an office was essential or not. The past six months have let them find out. The second relates to co-ordination: it may have been difficult for a single firm unilaterally to move to home-working, perhaps because its suppliers or clients would have found it strange. The pandemic, however, forced all firms who could do so to shift to home-working all at once. Amid this mass migration, people were less likely to look askance at companies which did so.

The third factor is to do with investment. The large fixed costs associated with moving from office- to home-based work may have dissuaded firms from trying it out. Evidence from surveys suggests that firms have in recent months spent big on equipment such as laptops to enable staff to work from home; this is one reason why global trade has held up better than expected since the pandemic began (see article). Such investments are made at the household level too. In many rich countries the market for single-family houses is stronger than for apartments. This suggests that people are looking for extra space, possibly for a dedicated home office.

Pour yourself a cup of ambition

The extent to which home-working remains popular long after the pandemic has passed will depend on a bargain between companies and workers. But it will also depend on whether companies embrace or reject the controversial theory that working from an office might actually impede productivity. Since the 1970s researchers who have studied physical proximity (ie, the distance employees need to travel to engage in a face-to-face interaction) have disagreed on the question of whether it facilitates or inhibits collaboration. The argument largely centres on the extent to which the bringing-together of people under one roof promotes behaviour conducive to new ideas, or whether doing so promotes idle chatter.

Such uncertainty is exemplified by a study in 2017 by Matthew Claudel of the Massachusetts Institute of Technology (mit) and his colleagues. Their study looked at papers and patents produced by mit researchers and the geographical distribution of those researchers. In doing so, they found a positive relationship between proximity and collaboration. But when they looked at the buildings of mit, they found little statistical evidence for the hypothesis that “centrally positioned, densely populated and multi-disciplinary spaces would be active hotspots of collaboration”. In other words, proximity can help people come up with new ideas, but they do not necessarily need to be in an office to do so.

However, not everything about working from home is pleasurable. In July a study from economists at Harvard, Stanford and New York University found that the average workday under lockdown was nearly 50 minutes longer than it was before, and that people became more likely to send emails after work hours. There is also wide variation between workers in how much they enjoy working from home. Leesman, a workforce consultancy, has surveyed the experience of more than 100,000 white-collar workers across the rich world during the pandemic. It finds that satisfaction with working from home varies according to whether that person has dedicated office and desk space or not.

The tide’s turned and rolling your way

And not everyone has the ability to work from home, even if they want to. Research published in April by Mr Neiman and Jonathan Dingel, both of the University of Chicago, found that across rich countries about 40% of the workforce were in occupations that could plausibly be completed from their kitchen tables. Evidence of actual working arrangements during the pandemic backs up those speculations. A paper from Erik Brynjolfsson of Stanford University and colleagues, looking at American data, suggests that of those employed before the pandemic began, about half were working from home in May.

Indeed, it is uncertain whether the benefits of working from home can last for a sustained period of time. Mr Bloom’s co-written study on Chinese call-centre workers is one of the few to assess the impact of working from home over many months. He and his colleagues found that, eventually, many people were desperate to get back to the office, if only every now and then, in part because they were lonely. Some companies which have tried large-scale remote working in the past have ultimately abandoned it, including Yahoo, a technology firm, in 2013. “Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings,” a leaked internal memo read that year.

The challenge for bosses, then, is to find ways of preserving and boosting employee happiness and innovation, even as home-working becomes more common. One solution is to get everyone into the office a few days a month. An approach whereby workers dedicate a chunk of time to developing new ideas with colleagues may actually be more productive than before.

A study from Christoph Riedl of Northeastern University and Anita Williams Woolley of Carnegie Mellon University, published in 2017, suggested that “bursty” communication, where people exchange ideas rapidly for a short period of time, led to better performance than constant, but less focused, communication. Not much evidence exists that serendipity is useful for innovation, even though it is accepted by many as a self-evident truth. “A lot of people made a lot of money selling this watercooler idea,” says Mr Claudel of mit, referring to the growth in recent decades of open-plan offices, co-working spaces and trendy “innovation districts”.

Coming into the office now and then is not the only way of generating bursty communication. The same can be achieved, say, with corporate retreats and get-togethers. Gitlab, a software company, has been “all-remote” since it was founded in 2014. With no offices, it gathers together its 1,300 “team members”, who live in 65 different countries, at least once a year for get-togethers and team bonding.

Similarly, companies such as Teemly, Sococo and Pragli offer “virtual offices”, making it easier to communicate with colleagues, rather than going through the rigmarole of scheduling a video call. Using video messaging from Loom, a worker can record her screen, voice and face and instantly share it with colleagues—more useful than a conventional video call, as the video can be sped up or rewound. Gitlab’s workers follow a “nonlinear” workday—interrupting work with bouts of leisure. Rather than talk to their colleagues over live video calls they engage in “asynchronous communication”, which is another way of saying they send their co-workers pre-recorded video messages.

More frequent working from home will also demand the use of new hardware, and the withering away of other sorts. At present, many companies host large data-centres, but these have proved less efficient as more people work from home. Goldman Sachs reckons that investment in traditional data infrastructure will fall by 3% a year in 2019-25. In its place, companies are likely to spend more on technology which allows workers to replicate the experience of being in the same physical space as someone else (higher-quality cameras and microphones, for instance). The more utopian technology analysts reckon that within five years, people will be able to put on a vr headset and immerse themselves in a virtual office—bad strip-lighting, and all.

There’s a better life

All this has wide-ranging implications for public policy. At present it is impossible to know whether home-workers will find it easier or harder to bargain with their employer for pay rises and improvements in conditions, though the idea of asking for a raise through a video chat is hardly an appealing one. Employers may also find it easier to fire remote workers than if they had to do it face-to-face. If so, then calls may grow for governments to give home-workers greater protections.

Another problem relates to employment law, argues Jeremias Adams-Prassl of Oxford University. Just as the rise of the gig economy has prompted questions and court cases about what it means to be an employee or self-employed, the increased popularity of home-working puts pressure on laws which were constructed around the assumption that people would be toiling away in an office. No one has yet thought through how firms should go about monitoring contractual working time in a world where nobody physically clocks in, nor about the extent to which firms may surveil workers at home.

Battles over employers’ responsibilities to their home-workers surely cannot be far away. Should a business pay for a worker’s internet connection or their heating in the dead of winter? Grappling with such questions will not be easy. But governments and firms must seize the moment. The pandemic, for all its ill effects, offers a rare opportunity to rewire the world of work. ■

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