In this week’s blog we hear from published author and LACE Client Executive Director Tim Ringo about why we should stay positive about life, work and moving forwards in the global economy. He tells us what we have to be optimistic about in a time of relentless change and uncertainty.
Since the early months of 2020, most of us have become accustomed to (or shall we say, resigned to?) a steady stream of doom and gloom raining down upon us from an overabundance of media channels that surround us. The World Health Organization (WHO) has warned that reports of depression and anxiety have increased by over 25%, globally, since 2020. We have faced plague, another European war, economic uncertainty and all of the disruption that comes with these events in steady succession for years now.
Well, this piece is not going to be one of those that adds to the pile of anxiety and uncertainty. In fact, I want to do the opposite: let’s lay out the reasons for optimism today and looking forward (hopefully a welcome change). It is true, there are many still struggling with the aftermath of the COVID19 pandemic, and the long-term disruption it has caused to our lives and our economy. I do not want to minimise this fact. However, as with most things, when enough time passes, these disruptions start to resolve themselves, and more and more data suggests we are now on a path to better times. It’s come time to start to acknowledge (and prepare) for this, if we dare.
The end of the pandemic
Just last week WHO declared an official end the COVID19 pandemic. Many of us had already moved on, however, this is welcome news, nonetheless. Not many would have thought in March 2020, that this would take more than three years, and lead to over 20m deaths worldwide. But here we are, on the other side of it, wiser and more sober about the risks nasty pathogens can bring to the world. This is a good thing as we were woefully underprepared for this health emergency and should be better prepared for the future (a reason for optimism?).
Positive thoughts on the economy
Chris Giles at the FT wrote an excellent column a week ago which outlines “five reasons to be cheerful” about the current state of the global economy. I will summarise here and add two of my own.
Economic resilience
Giles points out first, if you look at the world’s largest economies — “China, the US, the EU, India, Japan, the UK and South Korea — none is in recession (contrary to predictions) at a time when the Federal Reserve has raised US interest rates five percentage points. That is unusual and positive, said Adam Posen, head of the Peterson Institute of International Economics. The resilience in almost 70 per cent of the global economy alongside the absence of any financial distress in large emerging economies makes a system-wide financial crisis unlikely.”
Supply chain rebalances
The second reason for optimism Giles points out “stems from one of the often repeated weaknesses — that the world is suffering from a series of adverse supply shocks”. At the moment, “global difficulties in moving goods are fast disappearing”, with the Federal Reserve Bank of New York’s supply chain pressure index now well below its historical average. Very positive indeed.
Quick recoveries from energy blackmail
The third reason to be cheerful is “the speed and solidarity of the West’s response to Vladimir Putin’s natural gas blackmail over the winter ensured no one froze, the lights stayed on and energy consumption fell significantly. All of this came without a recession”.
Economy boosts in China
The fourth positive is “China’s emergence from its zero-Covid policy provides more reason to look at 2023 with some optimism. Its economy grew at an annual rate of 4.5 per cent in the first quarter, faster than expected, with household consumption and domestic services leading the way”. Higher Chinese domestic consumption is exactly what the global community has asked of Beijing for decades.
Oil prices
Finally his fifth reason for cheer is the steadily falling price of oil: “At the start of this month, the Opec+ nations agreed to cut oil production by 1mn barrels a day, sending the Brent crude oil price climbing from about $77 a barrel to $85 immediately. It demonstrated a confident oil cartel, willing to pursue a Saudi-first policy at the expense of its customers around the world”. The oil price has now sunk back to below $77 a barrel. Appears this move backfired on Opec+.
Contributing two of my own reasons for cheerfulness adds to the overall feel-good factor:
New workplace habits:
First, for nearly a decade, people productivity in the workplace has been stagnant or declining, putting downward pressure on GDP. (My most recent book, Solving the Productivity Puzzle Kogan Page 2020, delves into this phenomenon in detail). Well, the good news is the pandemic appears to have forced us to break bad habits at work, and as a result we are seeing people productivity rise globally for two consecutive years. Changes in where, when and how we work has reduced presenteeism (just being in the office to be seen by the boss) has reduced the time people spend commuting to work (increasing productive hours), has improve overall moral and engagement in work, and generally reset the clock on our ability to be effective in the workplace.
Adding value > Cost savings
Secondly, there has emerged a point of view in the business world that says technology in the workplace should be used less to replace people (merely creating cost savings), and more to make people better at their jobs (creating more value); effectively encouraging people to harness technology to help them go farther and faster (like when cars came along at the turn of the 20th century), and make less mistakes. This is where the promise of artificial intelligence starts to come into its own. If we harness the intelligence of the machines, and reserve things like judgment, decision-making and creativity to the humans, we create a symbiotic relationship that puts us on the verge of historic levels of performance in the workplace. And this will drive more value, GDP, and better living standards globally.
Looking forward
As Giles concludes “there is no doubt that 2023 will provide further economic hiccups”… he says we should remain vigilant and not become overconfident (or complacent). As he points out there are some clouds on the horizon like “banking stress, a US political impasse over its debt ceiling and persistently high core inflation are significant risks”. However, most economists are coming to the conclusion that the global economy has proven to be amazingly (and unexpectedly) resilient, and this should allow us some comfort to go forward with some confidence….and dare we say, cheerfulness.
This post was written by LACE Partners. They are an exhibitor on the HRTech247 Partners floor in the Technology Hall here.
