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19 March 2020
The UK business community has faced many challenges, but none in living memory has been as great as COVID-19, the coronavirus pandemic.
With many of us working from home or self-isolating, the whole rhythm of British society has been interrupted—and the national quarantine in countries with which we work closely, such as Italy, Spain and France, has added further challenges for export businesses.
People are worried, and understandably so.
The government is doing what it can to support businesses. Echoing former ECB president Mario Draghi’s famous speech in 2012, Rishi Sunak announced the government would do ‘whatever it takes’ to support businesses during this period, making £330 billion available for loans. It’s an astonishing amount, reflecting the seriousness of the situation.
But the COVID-19 pandemic is only temporary, and like many crises before it, from the 2008 financial crisis to swine flu, UK business will get through it.
Hope springs from China, where previously shuttered businesses are beginning to reopen as the number of new infections plummets.
FedEx executive vice-president Brie Carere estimates that China’s manufacturing base has returned to 65–75% of capacity in the wake of the recovery, with the larger manufacturers perhaps 90–95% back. If the virus can be brought under control elsewhere, businesses can quickly rebound and get the economy moving again.
But consumers might take longer to respond. A report by Bain Capital might reveal the way back for UK consumption: following the SARS outbreak in 2002–2003, spending on food and cosmetics saw a quick return to normal while demand for clothing surged beyond pre-epidemic levels—perhaps, this time, as people used to working from home realise they can’t go to the office in their jogging bottoms.
Some firms in China have started offering discounts and special offers to encourage consumer spending. For example, according to the New York Times the restaurant chain Haidilao has started handing out bags of soup stock and snacks to its customers.
With restaurants, pubs and cafes being among those suffering most as people are told to stay indoors, new initiatives such as these might be the answer now and after the pandemic has abated. The government is allowing restaurants to offer takeaway and delivery services—something that the New Statesman’s political editor Stephen Bush suggests might be “the first COVID-19 induced change that will never be unpicked.”
As our working and consumer culture is forced to change, it might have major long-term consequences for UK business, which will suddenly find itself with many new opportunities—remote working, delivery and takeaways are just three of those. Perhaps we’ll find the business world moving away from pure office-based work, with many more of us having the flexibility to work from in the future.
The Lloyds Bank National Business Awards champions change and innovation among UK businesses. As we continue to celebrate that, even as many of us are confined to our homes, we’re excited to see the creative and dynamic organisations that emerge in the aftermath of COVID-19, and how entrepreneurs and innovative firms adapt to the new business environment.