Covid-19 predictions for suckers

Published on May 02, 2020 in Life

Nowadays, it looks like everyone and their dog has an opinion about what the world post-COVID-19 will look like... and that includes me.

I guess this is what happens when people find themselves with lots of time to kill. And since I, too, have lots of spare time on my hands, here's 4 predictions I believe (hope?) will come true when this craze is over.

The end of the just-in-time supply chain

"Just in time" (JIT) is one of the (many) illegittimate children of globalisation and one of the main responsibles for the massive shortage of masks, ventilators and medical equipment that we are witnessing as the epidemic unfolds.

It's an inventory system whose aim is to cut costs by reducing the amount of goods and materials a firm holds in stock. With JIT, firms produce and deliver finished goods "just in time" to be sold.

So what's the problem?
The problem is that while a good idea in theory, it has proven to be an extremely fragile system when we needed the most.

As Nassim Taleb argued in Antifragile and The Black Swan, systems that don't have layers of redundancy are shattered when sudden, cataclismic events happen. Due to a mix of globalisation, centralisation and relentless pursue of efficiency, such cataclismic events are becoming more and more common.

And when they happen, these optimised-for-efficiency systems don't have enough room to absorb shocks and crumble, as we are seeing with entire industries wiped out in the space of a few weeks. Our supply chain is clearly not optimised for rare, but highly impactful, Black Swan events.

I believe companies will need to rethink how their supply chain works from scratch to make it more resilient. In a massively interconnected and globalised world, the only way for companies to insure themselves against Black Swan events (like a global pandemic) is to create layers of redundancy.

This is true not just for private companies, but governments as well that have found themselves in shortage of many necessary medicines & equipments. The idea that the a country will buy most of its medical equipment abroad, instead of producing it themselves, will sound ridicolous 10-20 years from now.

Part-time education & homeschooling will explode

With schools closed, parents all around the world are being forced to homeschool their kids.

While I'm sure some people hate it and can't wait for schools to re-open, many parents are finding it a very fun and gratifying experience. They are feeling closer to their kids and can see first hand the impact of direct education.

I think a lot of parents will feel uncomfortable outsourcing their kids education to a group of strangers when this pandemic is over. This, plus the fact that a lot of people will be allowed to work from home, will cause an explosion of homeschooling.

We might even see the birth of "part-time" education, where kids go to school 2-4 days a week and are homeschooled 1-3 days a week.

After all, the idea of teaching classes Monday to Friday is a residue of the Industrial Revolution, when parents needed a place to dump their kids to go to the factory. But with more and more people working from home and/or part-time, it's clear this model needs to be updated.

Online shopping will become the norm

Many people around the world are discovering the joy of online grocery shopping: no loading/unloading of bags, no parking, no standing in a queue behind a loud person on the phone, no impulse purchases (well, fewer ones).

If the quarantine goes on long enough to make this an ingrained habit, the idea of going to the super-market to buy groceries will be seen as an eccentric activity.

A generation of savers

Even with governments all around the world forking out trillions of dollars in financial aid, millions of people will lose their job and the financial stability of many more will be challenged.

The financial wound from the (very likely) financial crisis will take a long time to heal and the scar will be there for everybody to see for a long time.

The silver lining, however, might be a generation of savers. Millennials already save more money that Baby Boomers, but COVID-19 might be the event that changes the mindset of an entire generation for good, similarly to what happend in the 40s after the Great Depression.

The truth is: predictions are a sucker's game. One of the main features of complex systems (like, you know, the world) is that it's impossible to predict what will happen in the near (let alone far) future and we often miss much more obvious changes, like people in the 80's predicting flying cars and completely missing the Internet.

So ignore every prediction but don't be naive; as Heraclitus said: "The only thing that is constant is change".

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