Post-virus everything is going to change. That’s the dominant view of national and international media. But how exactly do they see the future? This regular digest section gives some of their answers and views/Edited by George Hamilton
In this edition (May 19):
- Northern Ireland bike shops inundated with customers
Commuting to work major reason for reports of record sales
- Top economist: Employment across NI may look very different post-pandemic
After unlock there could fewer in lower skilled jobs, a premium on home working digital skills and debate on our dependency on overseas manufacturing and food production.
Rich warning: In the next three pieces, two business leaders and a pro-business newspaper all warn that the rich should heed a warning for them to give back more to society post-virus
- #1 RICH: British business needs to put its money where its mouth is or prepare for a social reckoning
We are potentially heading into a steep downturn that could be as bad as the Great Depression of the Thirties
- #2 RICH: Salesforce chief Marc Benioff: ‘A number of bosses are still quite brainwashed’
This tech billionaire is keen to develop a more progressive form of capitalism
- #3 RICH: Billionaires ‘need to be reminded to give back’
- The Sunday Times says the rich have to demonstrate their willingness to put much more back than they have taken out. “The country has a right to expect nothing less”
- British exceptionalism has reached the end of the road
Illustrious history is insufficient shield against a virus and grim reality of Brexit
- ‘There will have to be a reset’: how UK culture will take on the Covid challenge
The impact of the virus across the arts and a future where podcasts thrive but “mosh pits” are no more
- ..and, finally, something different to cheer us all up. But unfortunately, when the virus and Brexit are memories, US and China will still be fighting says this leading City commentator: Race for space – Astronomical rewards await in the “commodity sweet shop” on the moon
Ulster University senior economics lecturer Dr Esmond Birnie said the pandemic “has probably accelerated certain adverse shifts which were happening. The decline of sectors which provided low-skill employment, for example retail and basic manufacturing, and probably also puts a question mark over the future expansion of leisure, hospitality and tourism, where the NI economy had hoped to expand the number of low-skill jobs.
“The future, post-Covid world of work will probably put even more premium on things like the ability to use digital, or working from home via a laptop. Both of those are more likely to be found in higher rather than lower-income households.” However, some factors could also favour lower skilled workers.
He added: “Some types of jobs which previously had been migrating to the lower cost countries, notably China, may now be retained here in the West as businesses and governments become concerned by the strategic weakness of being too reliant on very long supply chains. So some types of [local] manufacturing might experience a modest revival.”
There are also concerns, he said, about China “controlling parts of the UK economy”.
He also sees that more resources and higher pay might be devoted to the health and social care sectors.
“Previously we have been heavily reliant on migrant workers in those areas – perhaps too reliant, so there may be some jobs for people coming from a low-skill background. There may also be more political support for increasing the National Living Wage more rapidly than the growth of average wages.”
The government might also reflect on the importance of UK self-sufficiency in food terms. “It is possible … we are all a bit more sceptical about being dependent on very long supply chains,” he said.
A major issue for Stormont is that it has “a big oncoming dilemma” about whether to replicate the high level of EU subsidy for NI farmers, which could impact on spending, for example, on schools, health and economic development.
Dr Birnie also noted the lack of migrant workers at present causing problems in harvesting UK crops.”It does raise the wider question of why, given the level of economic inactivity in NI and GB, we became so dependent on migrant labour for such jobs in the first place?” Belfast News Letter May 15
People heading back to work are shunning public transport and opting instead to make the daily commute on two wheels.
One family-run bike shop in east Belfast has seen a 70% rise in trading. Paul Kane, who helps to run David Kane Cycles in Ballyhackamore, said that since reopening after seven weeks of lockdown: “We’ve been snowed under. [On the first day] we were caught off guard ourselves with the amount of people, we had 40 repairs left in with us. Typically, we would get 40 repairs over a period of three weeks.
“There have been people coming in asking about bikes to commute to work, and those with bikes in their sheds and garages are now bringing them in to get repaired, so they can use them to get to work.”
He continued: “With kids’ bikes, we’re nearly sold out of them. The problem with the bike industry now is replenishing those stocks going forward. We haven’t see it like this in a long time.
Meanwhile, in Londonderry, Michael McLoone, who owns Total Cycling based in Pennyburn, said he cannot keep up with the demand for bikes.
He said: “I have never seen anything like this – it is insane. We sold out of all the bikes we had that cost around £270, although we still have more expensive bikes.
“What people are also doing is bringing us their old bikes that they have pulled out from the back of the garage for repair.
Second-hand bike store, Belfast City Centre Cycles, has also reported an increase in commuters wanting bikes, revealing that it sold out of bicycles two weeks ago.
“We’re on the budget end of things and our business has increased three-fold,” said the owner, who did not want to be named. “At the minute, we have a waiting list for repairs and I’m doing 12-hour days working on them”.
However, Fraser Duncan, who was a rider in the 2014 Commonwealth Games and is co-owner of The Bike House in Bangor, said that while sales for the store have gone up, it was mainly driven by those looking to buy a bicycle for recreational purposes.
“There has been an uptake and we’re half expecting that it will continue with commuters. I just think it’s still too early for us to see that yet. A lot of people are still not back at work” he said
He stressed that for commuter cycling to flourish in the long term, our infrastructure would have to change.
This was echoed by Paul Kane, who welcomed Infrastructure Minister Nichola Mallon’s pledge that cycling and walking would be at the “very heart of our transport policy”.
He added: “When my father opened the business in the 1970s, everyone cycled to work and he’s seen the generation where it went away. Hopefully it is back now.” Belfast Telegraph May 15
#1 RICH: British business needs to put its money where its mouth is or prepare for a social reckoning
Javad Marandi: [in this crisis] ..one can empathise with those who genuinely face personal ruin. But, for the vast majority of us, that is not the case. This default position has things the wrong way round. We shouldn’t be looking at how to preserve the current system but at what sort of society we want to see on the other side of the pandemic.
Put bluntly, the current business model is broken and desperately needs fixing.
We are potentially heading into a steep downturn that could be as bad as the Great Depression of the Thirties. In the past, such episodes have triggered two almost automatic responses in Britain’s boardrooms. One is cutting jobs. The second is to go “bargain hunting” for troubled companies that can be acquired cheaply and their assets stripped.
These knee-jerk responses must be avoided this time round. Business owners, investors and executives have to understand and accept that everything they thought they knew about coping with a recession no longer applies. Society is unlikely to look kindly upon such behaviour.
However, the revolution in business behaviour must go far beyond job protection, critically important though that is. It involves a fundamental reappraisal of business structures, starting with what is perhaps the strangest yet barely noticed of commercial institutions: limited corporate liability.
But the abuse of limited liability has become a scandal. Too often the structure has allowed asset strippers to buy companies, load them up with debt, extract dividends when times are good and walk away when things get tough. Society as a whole often ends up footing the bill for these failures.
The good news is that the world is changing. Most people accept that properly managed limited companies need to pay dividends (not least to help fund pension schemes). But it is clear the use of incorporated status to facilitate what amounts to the looting of businesses will no longer be tolerated. This trend was already gathering momentum. But it has been greatly accelerated by the coronavirus epidemic.
We have seen similar inflection points in the past. The energy crisis and runaway inflation of the Seventies sunk the post-war consensus on full employment and hands-on economic partnership linking government, business and the trade unions, and led to a more abrasive model of capitalism that gave priority to “shareholder value”, labour-market flexibility and “down-sizing” the workforce.
Our current difficulties will likely result in the return of a more socially responsible economic model. However, lasting change requires leadership. Business people must welcome that responsibility. We must put our money where our mouth is. Javad Marandi OBE is a British entrepreneur and investor who owns Anya Hindmarch, Emilia Wickstead and recently bought The Conran Shop Daily Telegraph May 15
For Marc Benioff, the billionaire founder and chief executive of the US software giant Salesforce, the current crisis represents a chance to put into practise a better model for capitalism.
He says his Damascene conversion occurred while on a stress-induced sabbatical to India, when an encounter with a Hindu spiritual leader turned him on to altruism. It is a position Benioff says the rest of the corporate world is coming around to.
Last year, the Business Roundtable, the group of top US chief executives, said companies should do more than merely create value for shareholders.
Stories of corporate wrongdoing have been plentiful during the pandemic, and Benioff says it might take a generation for his “stakeholder capitalism” model to become pre-eminent.
“A lot of CEOs are still quite brainwashed that the business of business is business. That’s what Milton Friedman taught them, that’s what they’re gonna do, and that’s all they’re gonna do,” he says.
“And for those CEOs, maybe you’re never going to change them; you have to wait for another generation to emerge.”
Salesforce’s core service – known as customer relationship management (CRM) software – is used to manage information on customers, and communications with them.
A huge industry, CRM was not a new concept when Benioff founded his company, but his idea of running the software online and charging a monthly fee was.
The company has been a pioneer in cloud services, now a booming industry that ranges from Netflix’s video streaming to Amazon’s giant Web Services division.
Despite sitting in the ranks of the tech billionaires, Benioff has not always been popular among them.
Speaking at the World Economic Forum in 2018, he accused tech giants such as Google and Facebook of “abdicating responsibility”, calling for greater regulation of tech and comparing social media with cigarettes.
He says this made him something of a pariah, but that scandals such as Cambridge Analytica have vindicated him. Daily Telegraph May 10
Sunday Times editorial: The paper refers to its annual Rich List, published on Sunday, and says there will be few tears shed over the news that Britain’s super-rich have seen £54bn wiped off their combined wealth in the past two months.
This is even more the case when, as we report, 63 of the UK’s richest people — including 20 billionaires — have turned to the government for help during the Covid-19 crisis by putting workers on the furlough scheme under which the Treasury pays 80% of their wages.
They would all no doubt insist that they are doing nothing wrong and it is better for their workers to be put on the furlough scheme, which they are fully entitled to use, than to be made redundant. Even so, there is something more than a little hypocritical about this.
Many of the nation’s self-made millionaires and billionaires have made it an article of faith that government should get off business’s back and give entrepreneurs the freedom to get on with it. Yet, when trouble strikes, it is to the government that these free-market titans turn.
The rich need to be careful. Even before the world was turned upside-down by Covid-19, [a wealth tax] this was said to have been under consideration.
We have always opposed such a tax, [but] the UK’s richest need to do a lot more, though, to avoid a backlash and the attentions of the taxman in the period of enhanced inequality that is likely to follow this crisis. Recessions always hit the poorest hardest, and this one will be no exception. The rich have to demonstrate their willingness to put much more back than they have taken out and to use their undoubted entrepreneurial abilities to help lift the country out of this slump and prevent recession from turning into deep depression. The country has a right to expect nothing less. Sunday Times May 17
Philip Stephens: This is not the premiership Boris Johnson anticipated. Nor is it one he looks to be enjoying. The leading author of Brexit and the champion of a new “global Britain”, Mr Johnson had a heroic vision for his first full year: Britain alone would be Britain reborn. The job description did not include battling a deadly virus entirely unforgiving of such grand political sweep. Mr Johnson is a cavalryman. Coronavirus is an enemy that has to be fought in the trenches.
This month had been marked in the Downing Street calendar for a joyous celebration of British exceptionalism and its modern architect, Winston Churchill. But the spirit was lost to the collision between comforting nostalgia and a pathogen.
There are many explanations for the delayed and initially weak government reaction that has seen Britain fare relatively badly in the fight against the virus. Some relate to resources, some to poor management and some to the mis-steps inevitable in the response to such an extraordinary threat. But at the heart of the failure was the yawning gulf between exceptionalism and the relentless focus and organisation needed to stamp out coronavirus.
Even as other European nations were shutting down their economies in early March, Britain initially took a relaxed approach. Mr Johnson was defiant. The threat would be beaten back by “a fantastic NHS, fantastic testing systems and fantastic surveillance systems”. The great number of Britons would be little disturbed. Several weeks were lost before Britain followed the rest in locking down its economy.
None of this was as Mr Johnson imagined when Britain left the EU at the end of January. A “newly forged United Kingdom” was on the slipway, Mr Johnson declared. “We are embarked now on a great voyage, a project that no one thought in the international community that this country would have the guts to undertake.”
Brexit is being stripped of its fantasies. Britain’s strategy so far has been to convince the EU that it is ready to step over the no-deal cliff-edge. Some ministers say this will force Brussels to make a better offer. Others do not care: the shock of no deal, they say, will be lost in the wreckage of Covid-19.
Either way, there will be nothing heroic about the outcome. British exceptionalism has run its course. The coming years will demand nothing so much as a long, unremitting slog to rebuild the economy after the ravages of the pandemic and the collateral damage promised by Brexit. Part of me wonders whether Mr Johnson will decide that someone else would be better suited to so banal an endeavour. Financial Times May 14
This time last year, Sir Nicholas Serota, chair of Arts Council England, was celebrating the headline figure of a £10.8 billion direct contribution to the economy from the arts and culture sector. And this didn’t even include the money brought in by galleries and museums. It is hard to believe even half this will be achieved in 2020 since Covid-19 has put a halt to everything from TV production to dance shows and even to book launches since March.
In attempting to measure the challenge facing the cultural world, the prognosis is mixed. It seems reasonable to predict that radio and book publishing will wriggle through not too badly scarred. Television and theatre will be transformed but will sort themselves out in the end. But it’s looking tougher for the rest of the performing arts and live music: anything that entails lots of international travel and close bodily contact, essentially, is going to be sufficiently hindered in the medium term that the knock-on effects will surely continue into next year.
Here’s the predictions for how the various art strands could look like in a year’s time:
Pop and Rock: There will continue to be plenty of new music online. If social distancing is still in place, there will be some ingeniously staged socially distanced gigs, small venues will be doing acoustic concerts for tiny audiences, and some artists will be flouting the rules to tour. But many venues will have disappeared and artists will have sought other means to make an income. As for “mosh pits”, the days of rock fans hurling their bodies against one another in a celebratory frenzy are over.
Theatre: Some regional theatres and off-West End companies are likely to have foundered but with theatre leaders seeking a model that circumvents social distancing, the West End should be back in business, the rest of the sector regrouping fast too; there will also be a shift in artistic thinking in the wake of the current galvanic explosion of digital projects.
Classical Music: With around a fifth of classical musicians thinking of leaving the profession altogether, many orchestras will have been recalibrated. The big subsidised orchestras and institutions will still be around, but their ability to be boldly creative will be curtailed by the reduction in Arts Council funding and sponsorship that will surely come next year, and the continuing economic downturn. Some commercial promoters will have gone to the wall.
TV: According to ITV’s Kevin Lygo, “repeats of Midsomer Murders”. He is probably not wrong. We can expect a rash of titles in the autumn, with a few saved for Christmas. But this time next year? Monologues, two-handers with young casts, cartoons, studio shows with no live audience and, yes, repeats of Midsomer Murders.
Film and cinema: Chain cinemas will bounce back with the tentpole blockbusters that are expected to resume shooting later this year, albeit with pushed-back release dates. It’s the smaller players across the map, from independent cinemas to art-house distributors, that will have been fighting for their lives, and some will have lost the battle. There will be fewer blockbuster films around and cheaper indie films will be having a resurgence.
Galleries and museums: Very different. There will be fewer blockbuster shows and “bought-in” exhibitions brimming with international loans, and renewed interest, among curators, in permanent collections. The post-pandemic visiting experience will involve safe routes through the buildings, and people being asked not to bring bags. Opening hours may be tweaked to discourage rush hour travelling. Nicholas Serota predicts: “Frankly, I don’t think there’s going to be a recovery, as such – if by that we mean we’ll be back to where we were in February 2020. There will have to be a reset.”
Opera: More predominantly UK casts supported by largely UK orchestras, and more semi-staged productions, to save on budget. Audiences will be sparser but also younger. Not all the country house opera festivals will have survived.
Dance: Like opera, fewer international artists and cheaper costuming and sets. Some smaller companies that lack cash reserves and private sponsors are likely to have gone under.
Publishing: It seems likely that some book shops and small publishers will close. Arts Council England has traditionally regarded independent bookshops as “purely commercial entities”, so they are less likely to receive Emergency Response handouts. Literary festivals, so important for promoting books, may be easier to recalibrate for the era of social distancing than music festivals, but they tend to have a fairly elderly clientele. It’s doubtful they will all be returning in 2021. Many books due to be published about now are being held over to next year, which will result in a lag.
Radio: Radio will still be here, and maybe even buoyed by a resurgence in public engagement to take more creative risks, if companies can keep afloat financially in the meantime. And it’s likely that podcasts, already on the up before the pandemic, will be bigger than ever, as they’re often cheap and easy to make at home. Daily Telegraph May 15
Garry White: Exploiting lunar resources and building a staging post to Mars are now a key part of America’s geopolitical strategy. The “barren” moon is really a commodity sweet shop – with significant deposits of gold, iron, magnesium and titanium.
Also buried below the surface are believed to be significant deposits of some of the most strategically important elements that are expected to underpin the economy of the future.
These include rare-earth metals (REMs), which are essential in technologies used in smartphones and batteries for electric vehicles, but also act as components in smart-weapons systems and medical imaging.
Currently, China has about 85pc of the global processing capacity of these REMs, with the nation supplying 80pc of imports to the US from 2014 to 2017. This provides a powerful lever for Beijing in any trade dispute.
Obviously, China is not going to sit idly by as American companies stake their claims. At the start of last year, China landed a robotic rover on the far side of the moon, the first such landing in history. China’s space programme is a force to be reckoned with and is geared to support “economic and social development”. Mining the moon is a central aim of the programme.
The war for economic and ideological supremacy between China and the US will define the rest of this century. Without such rivalry, the quest to mine the moon would be much more pedestrian. Now a clash of civilisations is turning it into a critical mission. Garry White is chief investment commentator at wealth management company Charles Stanley Daily Telegraph May 8