Published by: Engin Ayaz, Director Of Business Development, BrandStar Tech
In addition to the immeasurable suffering and loss of life, the deadly coronavirus is already impacting the world economy, hurting stocks, halting travel and meetings, impacting the daily ritual of going to the office, and quarantining millions. Businesses worldwide are feeling the effect of these changes in behavior, and economists are predicting the virus will result in an economic loss to the tune of hundreds of billions of dollars. But while the grave and tragic human toll of lost-lives cannot be measured, there is a silver lining. If the history of pandemics is a guide, this contagion, like all others, will spark a wave of innovation, proportional to how it alters the shape of society.
Just about every major scourge has similarly affected humanity and business, and there is no reason to believe that the coronavirus will impact us differently. The earliest known pandemic in history was the Plague of Athens in 429 BC that took almost 100,000 lives and changed how people think about life and disease. Since then, there have been hundreds of epidemics where each one has cost society anywhere from several thousand to tens of millions of lost lives.
While each pandemic is unique and the world has evolved considerably over the past 2500 years, they share some commonalities in how society copes, behaves, thinks and innovates. As extreme and cruel as these diseases have been to society, each one has altered how we live and function, leading to innovation that facilitates the changes we have made to our lives.
Let’s look at some examples.
The Great Plague and the birth of modern society.
Very few disasters have affected society so significantly and done greater damage to humanity than the Great Plague or the Black Death between 1331-3153 in Europe. No one knows how many people died, but all estimates range from tens of millions to hundreds of millions. The Black Death is estimated to have killed 30% to 60% of Europe’s population and is considered the greatest calamity in history.
Just about everything changed as a result of this plague. With millions of people dead, human labor became a premium. People needed to work, and they needed to work harder and longer, giving rise to today’s work style. Wages rose, and the poor became wealthier, equalizing society. Land was plentiful as there were fewer people to share it with, and as incomes rose, so did literacy, giving rise to new thinking and freedom of thought. With education, the hierarchical society people lived in before the plague began to give way to a society further grounded in parity.
With more people working harder and for higher pay, one of the first things that came into existence were clocks and hourglasses to keep track of the time people worked. The plague also made citizens realize that the medical system they had previously relied on, one rooted in religion, did not work to keep them alive, and this spawned the birth of modern medicine, grounded in science and experimentation. And as labor became more precious, automation and tools that made it easier to do things were invented. The first eyeglasses were introduced to help people become more productive, as were hospitals, guns, modern homes, and a host of other innovations.
One of the greatest disasters the human race has ever faced gave rise to a new world and a new order of thinking that has shaped our lives for centuries and influences how we live and think today.
The Boston Small Pox Epidemic and the free press
In 1721, the worst smallpox epidemic hit Boston. Half of the city’s population of 11,000 was infected. The death toll of 850 was significant, but not nearly as deadly as many other epidemics. With so many infected, an extreme response was needed to curtail its spread, especially because people knew smallpox was deadly, having killed millions around the world. The only solution that seemed to have worked was variolation (something experimented in Asia). Variolation involved taking the pus from a lesion of an infected patient and inoculating it into a healthy person. It caused a mild infection but then secured the patient from getting the full-blown version of smallpox.
The very thought of taking infected matter from a deadly disease, and inserting it into a healthy human, caused societal rage. While some pushed for inoculating the healthy, most of the population rejected inoculation on religious and moral grounds. Even though the benefits were apparent (inoculated people had a mortality rate of 2%, compared to 14% for the non-inoculated), this solution was considered repulsive, and the two sides debated incessantly.
As the debate raged on, James Franklin (Benjamin Franklin’s brother) decided to share his opinions (which were against inoculation) in a newspaper. This opinion paper became a forum for debate and soon started including other stories about politics, local events, and even humor and satire, resulting in the creation of the first independent newspaper in the US. The smallpox epidemic catalyzed the development of the newspaper in the US, giving rise to a medium that, for centuries, has shaped how we think.
And of course, variolation eventually did catch on. As repulsive as the practice may have initially appeared, it saved countless lives in the subsequent decades until Edward Jenner introduced the first smallpox vaccine in 1797.
SARS and the growth of eCommerce
In November 2002, SARS (Severe Acute Respiratory Syndrome) first appeared in China and quickly spread to Hong Kong and other regions, putting the world on high alert (just like today). Travel to Asia came to a standstill costing the global travel industry billions. Tourism around the world came to a halt, and businesses and the global economy suffered. By some estimates, SARS cost the world economy some $40 billion. This figure is just the start as the real impact was not on what people did once they were aware of its risks, but what they didn’t do. They didn’t go to work; they didn’t go to malls, children didn’t go to schools, so parents had to stay home, they didn’t go to restaurants. All-in-all, a gloomy scenario, quite like the one we are facing today.
But, as with many other epidemics before it, as the dark cloud lifted, there was a silver lining. Consumer internet penetration in China, which had historically been low started to rise, eCommerce that was virtually non-existent, came into vogue. When people had to stay home, they still wanted to stay connected, shop from home, and get information to their homes. And while the internet was going to grow anyway, SARS accelerated its penetration in China and provided a launchpad for companies like Alibaba and JD.com to take advantage of shifting consumer habits and building two of the largest and most influential companies in China and the world.
Today – The Isolation economy
Pandemics catalyze innovation and accelerate change by providing an environment for launching and testing new ideas. Today’s coronavirus is already changing cultural and business norms shaking to the core of what we have taken for granted for decades and centuries. The simple act of a handshake is increasingly becoming a relic, even as we surgically wash our hands a dozen times a day.
Remote workers were already on the rise, but “working from home” is now WFH, the new normal. WFH will lead to a myriad of workplace changes impacting teamwork, productivity, collaboration, and communication. Since the coronavirus outbreak shares of Zoom, the WFH tool of choice have significantly outperformed the markets in value, an early sign of a market that is already anticipating changes. We can expect to see these transformations continue to impact how we think about office real estate and business interactions and collaboration, leading to a set of innovations to facilitate these evolving trends and make them permanent.
Additionally, people are now staying six feet away from each other; restaurant visits are down; we are avoiding gyms and public places. With the popularity of Netflix, food delivery, Amazon Prime, ultra-fast broadband and Pelotons, it seems as if we have spent the past decade preparing for this moment. But our lifestyle changes, which were already in the making, will be exacerbated by this deadly disease. Already companies like Postmates and Instacart are offering “contactless” delivery options. Similar offerings will evolve, and soon, a wave of innovation, designed for our new way of living and work, will spawn, and historians may likely mark today’s coronavirus as the spark for long-term societal change.