Innovation by Covid-19
From the outset, the corona crisis was compared to a war situation. On 17 March, President Macron addressed the French people: ‘It is war and this country is closing’. According to Boris Johnson, Covid-19 is the greatest challenge since the Second World War. War seems to lead to nothing good. Yet that is not entirely true. In times of war, investments rise sharply. Everything needed to defeat the enemy is pulled out of the closet. As Plato said, ‘Necessity is the mother of invention’. It even seems that war is necessary in order to take the next technological step. Usually, the designs were developed long before the war, but further development is too costly. A good example is the jet engine that was designed in the early 1930s and was even a prototype, but it was only during the war that there was a lot of investment in it. The aeroplane came too late to have any influence on the battle. Without the Second World War, the space race would also have started later. The Russians took the V1 and V2 parts with them and the Americans made Wernher von Braun an American citizen. Without the Second World War no radar, no synthetic rubber, no helicopters, and no penicillin.
From the start of the corona crisis, governments were immediately prepared to pull the purse strings. That is a stark contrast to the years after the Great Financial Crisis. At that time, savings had to be made. In Europe, under the leadership of Angela Merkel and Wolfgang Schäuble, in the United States, thanks to the Tea Party’s balanced budget policy. The Chinese then had to prevent the world economy from falling into depression. Major investment programmes are now in the pipeline. Suddenly it is possible to design several vaccines within a year, something that was not thought possible at the beginning of this year. There are also various governments with so-called Green Deals. For example, the EU wants net emissions of greenhouse gases to be reduced to zero by 2050 and to make the economy more sustainable. The costs are estimated at at least EUR 1 trillion (1,000 billion). Japan is on par with Europe. In America, the left-wing of the Democrats also came up with a Green New Deal. Biden was reluctant during the campaign but wants to invest $2 trillion in combating the climate crisis. China wants to be CO2 neutral by 2060 and sees the achievement of that target as proof of the superiority of the Communist system.
People are also adapting to the new situation through Corona. The lack of face masks provides many creative solutions. Artificial intelligence is used to monitor the distance between people. Digital money is gaining momentum. The impact seems small, but the possibilities, in the long run, are enormous. Robots have the advantage, they are not infectious and cannot infect anyone. Developments in this area are now moving so fast that the year 2020 can probably also be seen as the robot’s definitive breakthrough. Critical mass has been reached and then developments are moving fast. Soon, the use of the robot will also be further stimulated when the minimum wage rises. There is also an enormous gain in productivity in working and learning remotely. A remote doctor has also become normal. With this new technology, two major cost items of government – education and care – can be kept under control. You can count on biotechnology gaining momentum thanks to Covid-19. Suddenly, laboratory technicians are a popular profession.
The various technologies developed in recent years are mutually reinforcing. In this respect, 5G comes at exactly the right time. Autonomous driving now has the added advantage that the driver can no longer infect you. Nevertheless, most inventions will still come. As far as that is concerned, 2021 is a transition year. We are not going back to the situation of 2019. The terms ‘before the war’ and ‘after the war’ were regularly used in the twentieth century. Now we are discussing pre-Covid and post-Covid. Post-Covid will allow consumers to enjoy their freedom, they have saved a lot. The major changes also offer plenty of opportunities for entrepreneurs. A big difference with the Great Financial Crisis is that the number of new companies shrank then, but is now increasing spectacularly. In the third quarter of 2020, 1.5 million new businesses were created in the United States, twice as many as in the same period in 2019. In France, 84,000 new companies were created in October, the highest number ever in a month. In the UK, the number of new businesses increased by 30%, the biggest increase since 2012. In the long term, all enterprises will be good for employment, innovation, and, therefore, productivity. It also fits into the Super-V scenario for the coming years; the scenario in which, thanks to Covid-19, the economy is growing faster post-Covid than pre-Covid. That, too, is characteristic of war. Good for the economy and the stock market.