A Vision for the Postpandemic Economic Future

McKinsey, one of the nation's top consulting firms, recently released a 9 page article called Reimagining the Postpandemic Economic Future. This is a comprehensive look at what cities, states, and the nation needs to do in order to come back from the coronavirus pandemic even stronger, by "deliberately addressing the vulnerabilities the crisis has exposed." 

The article identifies where COVID-19 has caused the most damage, considers what foundations need to be laid in order to pivot to a new economy, and suggests new ways of organizing to enable changes. What follows is a summary of each of these lists.

Where has the COVID-19 crisis caused the most economic damage? 

  • Among the most economically unstable: 86 percent of the US jobs that are vulnerable to pay cuts, lost hours, and layoffs are held by workers earning less than $40,000 a year.
  • Small business: 25 to 36 percent of small businesses were at risk of closing permanently because of disruption from the first four months of the pandemic.
  • Sources of innovation funding: history suggests that venture-capital (VC) firms may be less likely to raise new funds and start-ups less likely to receive funding in such circumstances.
  • Places dependent on one industry: Nevada, Hawaii, and Florida's economies are more oriented toward accommodation and food service than the rest of the country and this concentration in one industry has lead to some of the highest unemployment rates. 
  • Digital deserts: around 24 million American households lack access to reliable, affordable, high-speed internet, and 80 percent of those households are in rural areas.
  • Megacities, where houses are on the market for 35 percent longer than in suburban or rural areas. 

Foundations for a Reimagined Economy

  • Embrace and accelerate productivity enhancements like accelerated automation and digitalization. 
  • Finding new openings to build resilience through 'health proofing' and diversifying economies. 
  • Invest in innovation ecosystems, from state, business, and academia-led R&D to commercialization, start-up, entrepreneurship, and VC.
  • Support inclusive growth; research has shown that achieving gender equality could add $4 trillion to the US economy, and closing the Black–white wealth gap could add a further $1.5 trillion.
  • Pivot training to skills to support automation and digitization including STEM, and support with tax credit and education-industry partnerships.
  • Close the digital divide.
  • Retain and attract talent through making cities citizen-centric. 

New Ways of Organizing

  • Organize for success within government by convening broad-based groups and involving leadership. 
  • Ensure civic engagement, from private and not-for-profit leaders to traditionally maligned low-income communities of color. 
  • Introduce better success metrics including targets, milestones, and owners - both long and short term. 
  • Flex all your funding tools - including public private partnerships.
  • Plan forward by looking  backward: leaders should make a retrospective assessment of the performance, assets, and vulnerabilities of their region.
  • Design challenge-specific solutions by making an inventory of what has worked in the past, or for other places. 
  • Execute with accountability, sustainability, and agility.