There is a popular song in Hebrew called Next year, which goes something like this:
Next year we will sit on our porch counting migrant birds,
And our kids will play tag between the house and the fields.
Wait and see, wait and see how good next year will be.
So what does the next year bode for us? It may just bode well. Business is recovering, people are recovering. The world economy is recovering, growing faster than pre-Corona times, which is what recovering economies do.
Only this time, the economy is growing at a faster pace than expected. So much so that it stoked inflation fears in the U.S. The U.S. government is spending, people are spending, and companies and supply chains weakened by corona cannot keep up with demand.
Yet if you follow the FED closely, following inflation closely (including its decision just a couple of days ago to leave interest rates at a historic low), you’ll see they’re not worried.
Why is that? Because this recovery is driven at least partly by innovation, and that’s excellent news.
Look around you: during the past year, just about every kind of business went online and became more efficient - from your local grocery store to your health clinic –investing in new technologies and becoming more productive.
Healthcare is a case in point. After years of hesitation and skepticism, healthcare has gone digital in a big way, spurring an abundance of innovative products and solutions. A major HMO started using Tyto for long-distance diagnosis and PulsenMore for at-home pregnancy ultrasound checks here in Israel. Doctor appointments are long-distance by default, with just about every action conducted online helped by a plethora of new software tools, from decision support to patient engagement to digital therapeutics.
Further from the spotlight, but no less critical, is industry. Corona dealt a blow to many sectors, depriving them of workers and disrupting demand and supply chains. Yet industry rebounded. Robots took over production lines and logistical centers, and companies speeded up the deployment of innovative production software and methodologies (something I have experienced first hand through our plants in East Asia and our daughter company 634.AI).
Another major change is people working from home. I personally believe workers need to interact face-to-face at least part of the week. Yet even if they work from home just two days a week and put just 10% of the energy saved by not traveling - the contribution to productivity is enormous.
It is also worth noting that this recovery is driven not only by innovation but also by diffusion of innovation. Fancy word, but again – it’s happening all around us.
Many innovations were taking place before Coronavirus, including a lot of new energy technologies such as solar, wind, and battery technology. And let’s not forget the mRNA vaccine, the amazing invention developed ten years ago but used only now for creating the CVOID-19 vaccine (at lightning speed compared with other vaccines).
Diffusion of innovation is doing a lot of good, not only for business. The other day I heard on the radio that social services here in Israel could now reach and help more people and do so more effectively because many have mastered video conferencing, even senior citizens.
The expected economic boom is so strong that people call it the “Roaring 2020s”, echoing the original Roaring Twenties of the last century when after the devastation of WWI and the Spanish Flu came a time of creativity, innovation, and invigorated sociability.
Yet, with all these upbeat predictions, it is essential to remember that we are not out of the woods yet. Coronavirus is still wreaking havoc in countries across the world. We need to get vaccines to them ASAP. If we don’t, it will act like a boomerang stifling economic recovery for all of us.
If there is one lesson the Coronavirus pandemic taught us is that we are a large global community, for good and bad. Everyone everywhere needs to rid of Coronavirus so that we can all enjoy the benefits of a better and brighter next year.