Hysteresis of COVID-19
Hysteresis is the dependence of the state of a system on its history: for example, the phenomenon of magnetism remains even after the electromagnet creating the magnetism is switched off.
I would like to use this term in a much more generalized fashion. Many times, there is a big stimulus to which the system responds. And even after the stimulus is withdrawn, the residual response continues, albeit at a reduced level.
Looked differently, for every stimulus, especially large ones, there are several responses from any system. Some responses are elastic -they get back to normal when the stimulus is removed, and some responses are plastic – exhibiting hysteresis – they continue even after the stimulus is withdrawn. And of course, there are responses in-between which continue in a subdued manner after the stimulus is withdrawn.
I would like to apply this to the current coronavirus threat, which as we all know is a very major stimulus to the entire global community, sparing nobody. It has impacted many parts of our lives. Especially, the measures we are taking to combat the spread are likely to have many unavoidably unintended consequences:
1. Social Distance: Wherever possible, people are quarantining themselves.
- Schools & Colleges have closed down. They are scrambling to continue their education with e-learning platforms
- In the majority of industries, employees have been asked to work from home – they are scrambling to set up home offices
- Restaurants, gyms, amusement parks, movie halls, libraries have closed; so have most shops, malls, retail stores – increased online entertainment, yoga/exercise classes, self-taught cooking, hair cutting etc.
- People are thronging to supermarkets & stocking up like crazy assuming a prolonged lockdown in future – in home cooking has gone up as it starts substituting for restaurant visits
- Assembly of people has been banned; people have stopped meeting their families, neighbours, friends, co-workers…people have (almost) stopped going to church/temple/mosque etc.
- Many call centres without cloud computing have had to close down, whereas those with cloud computing could operate from home; others now scrambling for in-home telephony, wifi, internet services and connections.
- All sports events/ series have been cancelled; Sports betting & gambling industry is in limbo – now betting on reality shows and other things
- The gaming industry has got a new push
- In-home TV watching has substantially gone up
- Looking after / entertaining children whole day on weekdays is becoming challenging
- Spike in Uber eats, group video calls & cycling, jogging, walking in parks and on streets
- People are increasing their share of e-commerce purchases
- People are obsessively cleaning their hands & being conscious of not touching their mouths & eyes and others
2. Economy: Disastrous impact on the economy that has essentially shut down
- The airline, hospitality, leisure, cruises, theatres, shops have virtually closed down – major lay-offs
- Many other industries like oil, auto & ancillaries are badly impacted – their employees are being laid off or furloughed
- Most other industries also impacted adversely, many companies shutting down, or filing for bankruptcy
- The stock market is in a downwards death spiral
3. Governments are scrambling to respond:
- With monetary policies and stimulus packages on one hand
- And gearing up to flatten the curve of progression of the disease
- Policies for social distancing / lock-down, communication regarding testing, doctor/hospital visits; what-to-dos if you or someone in your house has symptoms of COVID
- Creating capacity for testing & treating the disease (Hospitals, protective gears, respirators, testing kits)
- Promoting R&D for vaccine, testing & treatment of COVID-19 in particular & influenza in general
Let me now speculate on the “Hysteresis” of COVID-19.
Assume, by 2022 the new vaccine has been found & made mandatory. The new infections are under control. Moreover, effective medication has been found for treating those who contract the disease. All the mandatory lockdown instructions from the government are withdrawn. Life is more or less back to normal.
The likely permanent impact – Hysteresis- of the current global lockdown, as I see it, are:
- Many companies across industries will introduce ‘working from home’ days for many of their employees – lessen the stress of commuting and morning rush on families and reduce costs of business
- Schools (middle-to high) & colleges may introduce working from home days on a similar basis. In any case, there will be more dependence on e-learning, with best in class teaching even of difficult concepts
- Staying at home, people will have discovered new passions – music, painting, yoga, gardening, writing, cooking etc. Many of these passions will continue and might even result in changing vocations or careers
- People will have gotten used to video meetings, both one on one as well as group/team meetings/hangouts, and there will be more such virtual meetings, both for business as well as happy hours with family and friends.
- COVID lockdown will have placed new strains on partner/marital relationships. The ‘soulmate’ model of marriages – which depend upon intense physical & emotional attraction are more likely to have crumbled under the stress & the ‘family’ model of marriages which have an underlying purpose of navigating the family through highs & lows have probably endured & emerged stronger
- Having spent a lot of time with children, the parents will be even more involved with their children and school activities
- Distance learning will become more common; college applications will plummet
- The economy will be limping back slowly from a deep recession. Try as it may, the overall sentiments will recover very slowly
- We will have witnessed lots of business/individual bankruptcies, job losses & wage freezes.
- The stock market will have lost its mojo
- Restaurants, hotels, airlines, cruises will need a long time to recover. Auto & oil industry will be limping
- Grocery retail will start slumping with gradual movement back to restaurant eating. Grocery e-commerce will do better with many ‘first time ever’ buyers continuing on the e-commerce platform for grocery as well as all other items. This trend will accelerate. Grocery kerb-side pick uptrend will accelerate
- The trend away from cable TV into internet-based TV will sharply accelerate, thanks to stoppage of all the live sporting events during lock-down
- The trend away from movie theatre-going into Netflix type shows will also accelerate
- Entrepreneurs will offer more online services for the new normal– consulting and responding to routine issues online
- Overall, the Tech industry will do excellently. Data bandwidth consumption & cloud computing will skyrocket.
- Americans will have to rethink their healthcare system. With 18 million uninsured people, 11 million undocumented workers & unknown millions of people without sick leave, they have no incentive to be tested for COVID: seriously restricting the country’s fightback against the virus. American efforts at flattening the curve will probably show up to be much less effective
- In time, telemedicine will gather momentum vis a vis PCPs (Primary Care Physicians)
- Globally, there will be unprecedented innovation in the area of viral healthcare
- In time a more general-purpose anti-influenza vaccine will be created & will be made mandatory
- People will be more careful about savings & less reckless about borrowing
- As consumers & customers change, as regulation changes, all industries will be impacted. Their future business strategies will have to be revamped fundamentally, with a back-to-the-drawing board approach
- All governments will allocate higher budgets to healthcare
- Governments will rethink about the supply of strategic reserves as well as about hollowing out of manufacturing capacity of even strategic products (China has 80% of global manufacturing capacity of face masks as of the beginning of March)
- A generalized residual hysteresis will be FEAR. This will place the stock market in negative territory for a long time. Fear of going out, fear of congregating, fear of carefree, spontaneous travel planning
- Long term ‘Losers & Winners’ of this crisis (arranged in order from biggest losers to winners) are:
- Tourism & Leisure
- Aviation & Maritime
- Construction & Real estate
- Oil & Gas
- Financial Services
- Food processing & retail
- Personal & Healthcare
- Medical supply & services
Governments will have a big role to play. All governments will print money at an unprecedented level. They will direct centralized control on several issues from who should manufacture respirators to which industries should be saved to what extent. The freehand of Adam Smith will be let go. Governments will, with a straight face, follow the movements of COVID patients by following their mobile phones movements; throwing to wind the debate on privacy. As the Hysteresis-effect of this behaviour during the crisis, we can expect to see a ‘big, intrusive, China-style’ government post the crisis.
A general appreciation of ‘we are universally in it together’ will set in. An unprecedented scientific collaboration across the global community to fight the virus, for a change, not prompted by profits, but by survival instinct will bode well for the future of ‘global commons.’ There will also be a greater understanding that ALL viruses come from animals. The ‘vegan’ argument will strengthen.
The ‘climate argument of sustainability’ will become stronger. And hopefully, we will save the planet from human activity. These are no mean achievements!
At the end of this global hysteria, we will find hysteresis impacting many aspects of our lives and we will together learn to survive in a new world.
By Shreekant Gupte
An alumnus of IIT Kanpur and IIM Calcutta
Presently resides in the USA.