By Prof. A.D. Amar
Large operations such as restaurant, retail, sports and entertainment, education and training, and travel and tourism can be restarted first with careful reconfiguration, adaptation of technology, rejigging of their processes, workflows, and scheduling.
America should restart its economy and other operations by mitigating risk and making sure that it is done right to be able to succeed at the effort. While playing safe and delaying it beyond May 2020 may sound like the appropriate step to take, we should also know that it brings with it a loss of about two trillion dollars and a consequential setback worth several trillion dollars more every month. On the other hand, restarting America early may bring the risk of extending the misery due to COVID-19. There is no way to come to an optimized solution to this problem. It will have to be made by guts and appetite for risk-taking. We have to carefully look at several pros and cons and decide.
Restarting the economy would be especially important because some estimates tell us that the effect of coronavirus could hang on until August 2020 or even later. A shutdown of that magnitude no economy will be able to handle. Moreover, some say that coronavirus would come back with an even greater vengeance as the cold season returns in the fall. The economy has to be ready to cope with that if it does indeed happen. In fact, the longer the U.S. economy remains in this dormant state, the longer it will need to get restarted, harder to bring it back to its past size and the greater irreparable harm it will cause.
To restart the economy, we have to look at the type of operations deployed for product and service transformation. There are certain operations that are large, both in terms of the size of employment and contribution to the GDP. This list includes businesses such as restaurant, retail, sports and entertainment, education and training, and travel and tourism that can be restarted with proper and careful reconfiguration, adaptation of technology, redesign and/or creative reinventing of their processes, workflows, and scheduling. Their restart can be begun in a matter of weeks.
We can formulate standards of operating for those large organizations that have more machine and technology interface and reduced human interactions. Such outfits include manufacturing, service processing, fulfillment centers, etc. The restart of these businesses will depend on how soon each of them comes up to these standards.
Taking the calculated risk of restarting this economy that had been willfully put to sleep rather than shut down because of an external one-time mishap will be unavoidable. It will have to be woken up with whips, such as presidential or gubernatorial executive orders. The alternative in the form of slower legislative processes will likely cause a long-lasting recession or depression.
But, no matter when we restart the economy, given the political polarization and the anxiety over the presidential election in November, opposition to any proposal to restart is bound to be there. That is why we have to move fast and devise a scheme to open the economy and begin the restarting in weeks rather than months. It may be accepted that waiting to restart all sectors of the economy simultaneously will unnecessarily keep some sectors shut that can be reengineered to open without much further delay.
Utilizing the state by state and county by county data on coronavirus already collected by the White House, we can sectorize our economy and get what can be started within weeks by presidential order and what will need congressional action. The latter will have to be started soon and completed on an expedited basis.
Operations that need longer will be restarted applying science, engineering and technology. Our effort should be to redesign human and machine interactions, human-to-human contacts, and group interfaces, all with the goal to mitigate the risk of any second or later legs of COVID-19. We should also work to adapt and design or redesign technologies, operations, and communication systems for keeping workers safe from all similar communicable diseases. This should also make the companies become even more productive.
America should use COVID-19 experience to emphasize self-dependence for the production and distribution of all goods, services, processes, and technologies. This experience has taught us that all these are important and not just the essential ones.
We should also work to make sure that we bring back manufacturing to the USA and place requisite importance on research to help us achieve this self-dependence in an economically competitive way. The White House should continue to exert pressure to make sure that American business invests in the goal of self-dependence. Furthermore, we should make sure that our businesses set R&D intensity to achieve the goal.
We should also fight COVID-19 worldwide and help other countries restart their economies, replicating what we did to put the world back to work after the two world wars.
The author is Professor of Management at the Stillman School of Business, Seton Hall University in New Jersey. He founded Indian-Americans for Trump 2016.Read More