How to Design your midsize company for post Pandemic Future

The future of productivity and economic growth in the US and Europe is uncertain. This column reviews evidence from eight economic sectors to lay out the key conditions for sustained recovery from the Covid-19 crisis. It suggests that the weak productivity growth that followed the Global Crisis can be averted if private and public sectors act together to strengthen demand and diffuse supply-side restructuring to all firms.

The COVID-19 pandemic has exacted a gruesome death toll and, the stunningly quick developing of vaccines notwithstanding, the public health crisis is still far from being contained. Indeed, in spring 2021, Europe appears to be in a third wave and the disease threatens to become endemic, a structural change to which our economies will have to adapt. The pandemic has caused the deepest recession since WWII, hitting demand and supply simultaneously with different force depending on the industry (Baldwin 2020). Prospects for social-contact dependent industries have arguably changed for good.

A broad shift toward online interaction channels occurred during 2020. In retail, e-commerce exploded (McKinsey Global Institute, 2020b). Before the pandemic broke, e-commerce was forecast to account for less than one-quarter of all US retail sales by 2024; during the first two months of the COVID‑19 crisis, the actual share of e-commerce in total retail sales rose from 16 to 33%. One retailer achieved three years' worth of pre-pandemic rates of growth in e-commerce in eight weeks. These are structural changes, establishing positive, self-reinforcing feedback effects. Reverting to previous ways becomes implausible.