The Real Economic Opening We Need
Policymakers around the world already recognize that they need to find a way to reopen national economies safely and in accordance with policies to keep the COVID-19 pandemic under control. Yet not nearly enough has been done to encourage new markets that can operate even under conditions of economic lockdown.
STANFORD – With governments adopting measures to halt the COVID-induced economic downturn and prepare the way for a safe recovery, we need to start focusing on new ways to open up and create markets. So far, this task has been taken up almost entirely by the private sector; but governments need to do more to offer encouragement.
The first step is to observe precisely how markets are opening after months of social distancing and economic lockdowns. According to the most recent US Census Bureau data, non-store (primarily online) retail sales rose by 8% in April, up from 5% growth in March. In contrast, all other major spending categories declined: sales of motor vehicles and parts were down by 12%, grocery stores’ sales fell 13%, and spending on clothing and accessories plummeted by 79%. But within these other categories, specific items are booming, including home office essentials and exercise equipment such as Pelotons. As Walmart CEO Doug McMillon recently put it, “Adult bicycles started selling out as parents started to join the kids.”
Telemedicine is also exploding as more service providers launch online services and encourage people to switch to virtual care. Increases in bandwidth usage show that patients are responding. The recently announced merger of the cloud communications firm Twilio and the doctor-patient network Zocdoc is just one example of the growth underway. Twilio’s usage, measured by peak concurrent participants, has surged by 850% since mid-February (and by 500% in terms of daily video minutes). The firm now plans to launch a free-to-access HIPAA-compliant Zocdoc video service.