Issue link: https://maltatoday.uberflip.com/i/1236030
16.04.2020 8 OPINION George Mangion Corona pandemic gives a boost to innovation George Mangion is a senior partner of an audit and consultancy firm, and has over 25 years experience in accounting, taxation, financial and consultancy services. His efforts have seen PKF being instrumental in establishing many companies in Malta and ensured PKF become one of the foremost professional financial service providers on the Island L iving on this tiny island, we are constantly reminded by politi- cal leaders how the pandemic has a few silver linings - the air outside is healthy with less traffic pollution and the quiet in the streets makes us appreciate the beauty of mother nature blossoming unhindered in the best time of the year. ese are the only tangible benefits, given that the economy is on its knees and soon, we fear the onset of petty crime and theft revealing its foul head as can be expected from the thousands of unemployed cocooned at home and a larger number of employed workers be- ing paid a social wage of €1200 month- ly - not enough to meet expenses for a family. Equally in distress are a number of self-employed professionals includ- ing lawyers (Court is closed except for emergencies), engineers, accountants, notaries, dentists seeing their lifestyle wane and business revenue dwindle by the hour. e killer virus is reported to have originated in China possibly due to humans having close contact with in- fected animals or by eating exotic food. It started in the Wuhan region, where inhabitants contracted the disease and thousands were forced into quarantine. is led to partial and full shutdowns of plants and factories in China, some of which were essential in the supply chain to service prominent Western tech- nology companies. is in turn caused financial hardships due to scarcity of certain items and higher prices due to higher cost of shipping freight caused by the imminent collapse of major air- lines flying cargo. Indeed, we started reading how thou- sands of Chinese who were diagnosed positive started developing light symp- toms, with doctors soon noticing that the virus may be easily transmissible even at an early stage of infection. Mother nature seems intent on chas- tising us for our deadly abuse of the environment and contamination of the ecology with massive over-crowding in cities and unbridled factory emissions in a concerted effort to boost GDP growth. e virus is fickle in its attacks on humans. It starts as a persistent cough which at first, one may overlook. In- stantly, however, those with symptoms often feel unwell and take to their beds. Acute cases involving vulnerable per- sons may lead to the patient's demise, as so far there are no proven vaccines and the number of confirmed cases has risen to close to two million worldwide. Health authorities have cautioned citi- zens to stay safe at home and undergo 14 days quarantine whenever they visit infected areas. ey said the virus hitches a ride on droplets of saliva that come out of the respiratory tracts of infected individu- als. ese may be expelled during nor- mal breathing or, more commonly, as a cough that propels them a few metres into the air. Or they may land on a sur- face, on which the virus particles they contain could survive for hours, or even days, and from which those particles may eventually be transferred to others who touch the surface and then touch their own face or mouth. For the first time, we are being cau- tioned about the spread of a nasty virus which the common man in the street never bothered to notice - until stark reality checked in. History reminds us how over the cen- turies there were plagues, pestilence and deadly viruses that decimated whole generations. Each time a plague rules over the earth, it leaves millions of people dead. Consequently, for a period there are fewer workers to till the fields or work in factories so human labour came at a premium. Wages rose and land was plentiful as there were fewer people to share it with, and as worker's wages rose, so did literacy, giving rise to new thinking and freedom of thought. Typically, in the past it was the great plague which made citizens realize that the medical system they had previous- ly relied on did not work to keep them alive, and this spawned the birth of modern medicine, grounded in science and innovation. e Malthusian theory comes to mind to explain such phenomena. Malthus is a philosopher/scientist who predict- ed in 1798, that when the rise in pop- ulation is greater than the food supply, there is a condition of disequilibrium. In his essay, he remarked that during such a period of disequilibrium, people will be subjected to wars, epidemics, famines, starvation, and other natural calamities which are named as nature checks by Malthus. Simply put, Malthus says that when humans fail to control excessive popu- lation growth, nature plays its role. e theory may not be totally valid nowa- days since food supply has increased exponentially due to heavy investment in farm technology and the planting of better crops but the wrath of Mother nature manifests itself prominently in severe climate changes, hurricanes and other natural catastrophes. On the other hand, one may concede that the planet today is facing threats in all aspects of human existence - be this in terms of inequality in global distri- bution of wealth, corrupt governments, avarice in public procurement, rapidity in depletion of natural resources, and decadence within State governance. Notice the displacement of millions of migrants in the Middle East and in a host of other countries. But it is not all doom and gloom. Pandemics breed innovation and ac- celerate change by providing an envi- ronment for launching and testing new ideas. Today's coronavirus is already changing cultural and business norms shaking to the core those norms, we have taken for granted for decades and centuries. One can mention two key areas where innovation has already borne fruit. Consider how intensive use of tele- health and teleconferencing facilities are becoming critical for enterprise operations to survive lockdowns dur- ing the pandemic. Remote working was already on the rise, but "working from home" is now the new normal. is is 2020 survival technology. It will lead to changes in the traditional work- place impacting teamwork, productiv- ity, collaboration, human interaction and communication. Since the coronavirus outbreak, there has also been marked investment in fac- tory automation and remote operation that has brought forward improvements not expected for some time to come. Anna Shedletsky, the boss of Instru- mental, a firm which uses machine learning to help manufacturers improve their processes, says that in electron- ics manufacturing "we're going to do five years of innovating in the next 18 months". With more people having to work remotely, a lot of international travel could come to be seen as unnecessary and companies may bring supply chains closer to home to avert disruptions. One expects that in the near future, the exit path from lockdowns will be shaky, but enriched with a wealth of in- novation and lessons learnt to survive a new world. Some firms will emerge too weak to face the new dawn but others which embrace innovation will discern a stim- ulating Eldorado road leading to a pot of gold. In conclusion, the EU has allocated €500 billion to stem the tide - one hopes that some of it percolates into business accelerators to help start-ups in their quest to drink from the chalice of inno- vation. But this may just end up being a Utopian dream that will never mate- rialise in a planet reigned by multi-na- tionals.