The Age of Covid is coming to a close… It is still vitally important to keep the pressure and vaccination rates up, but some large parts will soon have had one year of covid and find themselves on the other side.1 What will that world be like? Will it go back to the normal that existed before or what is the new normal?
There will be no full “making up for it.”2 I hear people saying “once vaccinated, I am going to travel/party/go out to make up for lost time!” I don’t believe this.
First of all, this would never work in aggregate: we cannot all take all the trips that we didn’t take in 2020 because there just are not enough airplanes; we cannot have all the restaurant meals because the number of restaurants didn’t grow (if anything, it shrank, as places closed).
But, more fundamentally, I don’t think this is psychologically plausible. I only spent half-a-year in the Plato’s Cave of Zoom and am not making up for lost time. On the contrary, it took me a while to get back into feeling comfortable in a crowd.3 I think that in 20 years, we will still see that the generation that came of age in 2020 (those kids in the 18-22 year range) will be dining out less often than either the generation before or after them.
Those trips were lost, those restaurant meals were not eaten, those awkward first dates didn’t happen… Covid really has taken that away from us.
Ordering online will keep growing. There is an outdoors mall near my Shanghai apartment which opened just over a year ago. It has a nice medium-sized supermarket, some restaurants, two cafés, several activity places (classes for kids, a yoga place, massage), and no traditional stores. I have seen ads in China using the term offline store: the word store has become default-online, and it’s the offline kind that must explicitly denoted.
It’s very nice and I think this is the future of retail (there are also a couple of convenience stores around the corner). Most things, I just prefer to order online. Most cities have too many stores for the current technology.
Outside of China, home delivery is still behind,4 but the pandemic definitely accelerated the trend towards online shopping and home delivery. The infrastructure that was put in place will stay in place beyond the pandemic. This includes physical infrastructure: In Luxembourg, the post office installed many new package pick-up locations throughout the city. They will not be removed.5 But habits and coordination infrastructure will also stay in place. Many people installed food-delivery apps on their phones for the first time, and many restaurants signed up for these food delivery as well.
Retiring in the sun will eventually bounce back, but it’ll take a while. In Europe, people from a snowy locale retiring in the sun was an increasing trend. The appeal was obvious: why spend your retirement in a cold-and-grim village in Northern Germany, when you can spend it in Tavira? It was, however, predicated on open borders and the notion that “I can always hop on a plane and be home in 4 hours.” This may become true again, but confidence was shook and I think it’ll be a while before there is a full reversal.
I have never seen a good accounting of how much these retirees contribute to intra-European transfers, but some back-of-the-envelope calculations point to a large amount: The German state seems to pay 240k pensioners abroad. If we estimate that they get around 36k Euro per year,6 that’s >8 billion Euros, which is comparable to Germany’s net contribution to the EU budget.
Zoom is here to stay, so is remote work; this may mean more commuting and more traveling. If you spent the year in Plato’s Cave of Zoom, I am sure you don’t look forward to yet another Zoom meeting. But, I see 2020 as having a proof-of-concept and see hybrid work-from-home/in-the-office-work as becoming a spectrum rather than a binary choice. Work from home is, however, not a substitute but complementary to in-the-office.7
We often summer in a place a full one hour drive away from the Northern-most edge of Lisbon. It’s nice, by the beach. Some people who live there commute into the city, which always seemed extreme (with traffic, it can easily two hours to get to the centre). But, if you work-from-home 3 days a week and go in Tuesday/Wednesday, it is suddenly very appealing to live by the beach, in a large house and suffer a long commute.8 Similarly, even “fully remote” teams will often have All-Hands meetings twice a year (or even more often than that), which means a lot more traveling.
More fundamentally, Zoom has democratized and normalized having discussions with individuals which are geographically distant. This will, I think, generate more long distance contacts.9 Many of these will have, however, to be complemented by in-person contact (i.e., travel). The end result is may very well be more travel.
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There are also parts of the world that had minimal impact from covid. We’ll ignore those here.
In economese (i.e., using fancy maths in a slightly confused and confusing way), the recovery has a unit root.
Like in the original Plato’s cave, the shock of reality after so long in the cave takes a while to be overcome.
Europe is very behind.
These so-called “pack-up boxes” predate the pandemic by many years, but the pandemic accelerated their installation.
This is the average pension and it may be that the pensioners abroad get a different number from the average, but if I had to guess, I would guess they get more. Which means that the German government may be sending more money to residents in other EU countries through its pension system than through the European Union!
Partly because different types of work lend themselves differently to remote-ness.
A habit I’ve already gotten into is to take my early-morning meetings at home and then leave for the office past 9h30, when rush hour has died down.
In my group, we now regularly have remote guests presenting at our internal group meetings. This is now normalized and I hope we keep doing it even when "things are back to normal.”