– March 12, 2020
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With coronavirus fears accelerating and nations and organizations across the world grappling with how best to contain and mitigate the harm, it becomes increasingly difficult to be optimistic about the immediate future. What are the prospects for the American public and for the 2020 economy? Will we see a sharp and extended increase in sickness and fatalities? Will we observe a sleepwalking economy with hardly any GDP growth? Might we experience one of the more serious recessions of the last 20 years?

Well, we are cautiously optimistic. We are trained economists rather than public health professionals, but our backgrounds lead us to think that coronavirus will rise and fall relatively quickly and that the nation’s GDP growth will mirror those effects. Look for growth to fall significantly in 2020’s first half, maybe becoming negative, but rise again and recover as the year progresses. No, we do not expect to see 3.0 percent GDP growth any time soon, but look forward to seeing 2.0 percent growth again at the end of this year.

Optimistic? Some might call us irrational or something even worse. But following the extraordinary thoughts of Matt Ridley’s 2010 book, “The Rational Optimist,” we are convinced that markets—to the extent they are allowed to operate—working together with high-speed communications technologies, will significantly reduce the harm that could befall us. Let us explain.

Make no mistake about it: We face a serious health threat and should all follow the advice and counsel of the Centers for Disease Control (CDC) and our health professionals. But interestingly enough, projections from epidemiologists indicate this could be the first global pandemic in the age of the smartphone, artificial intelligence, ubiquitous cellular and internet connectedness, and globally connected communities through social media. As a result, society is better prepared to deal with a serious health threat than ever before.

So while the virus is already resulting in significant disruption, loss, and real tragedy, yes, there is cause for some optimism in times such as this. Enhanced by ubiquitous, unprecedented, and rapidly improving and inexpensive technology, we can bring innovative solutions to bear on this serious problem.

A comparison with earlier pandemics:

Let’s consider a few observations from the first two pandemics of the 21st century: severe acute respiratory syndrome (SARS) in 2002 and the “swine flu” (H1N1) in 2009. In the case of SARS, five months elapsed before the World Health Organization (WHO) and CDC issued global alerts. The Canadian Global Public Health Intelligence Network (CGPHIN) picked up information from Chinese message boards indicating a novel flu-like illness in November 2002. This information was not translated to English by the WHO and made available until January 21,2003—primarily due to systems and technological limitations. It took five months to definitively identify the virus. The pandemic was contained before an actual vaccine was developed.

In the case of H1N1, the first flu pandemic in 40 years, the development of improved technology and related advances allowed for improved public health response times, more rapid genome sequencing, and advanced clinical trials and vaccine development and availability. Notably, clinical vaccine trials were underway within five months of the outbreak.

In the case of the coronavirus, a cluster of pneumonia-like illnesses were reported in the Wuhan province of China in late December 2019, with a declaration by China to the WHO on December 31. Within 24 hours, the source of the outbreak had been identified, and the virus was definitively identified by January 7. By January 9,two days before the first death, the genome of the coronavirus had been sequenced.

The first case was reported in the United States on January 21, with CDC test kits available by January 27. Less than a month later, multiple pharmaceutical companies and health research organizations had begun the clinical vaccine trial process. A vaccine developed by Moderna Therapeutics was initially sent to the National Institute of Allergy and Infectious Diseases (NIAID) on February 24, less than two months after the identification of the virus half a world away.

How communications linkages have expanded:

Next, let’s look at some improvements the market has delivered from the time of SARS, to H1N1, and now the coronavirus. In 2002, only 59 percent of the U.S. population had access to the internet, growing to 76 percent by 2009 and 90 percent by 2019. Home broadband use increased from only 9.0 percent in January 2002 to 73 percent in February 2019.

Equally important in this case are mobile device and social media use. In 2002, the current conception of social media didn’t really exist. The percent of the U.S. population using social media in 2008-09 was approximately 10 percent, ballooning to nearly 80 percent by 2019. In 2002 there were no mobile devices for internet access. In 2011, only 35 percent of the U.S. population had access to mobile devices, with 81 percent having access by 2019. Nearly every American who desires internet access, social media access, and a mobile device now has it.

What does this mean for core societal functions like education in the event of coronavirus-inspired disruptions? Consider that in 2002-03, only 30 percent of public K-12 school districts offered online learning options, growing to 53 percent by 2009 and 75 percent by 2013-14. It is estimated that nearly all U.S. public schools now have online courses. In just the past week, we have seen major universities such as Stanford, MIT, and the University of Washington adjust and innovate to continue operations while simultaneously protecting against the spread of the virus. At the University of Washington, all spring quarter classes have been moved online.

Across the globe, we are shifting to virtual meetings, telepresence, and other remote solutions to limit the risk of disease transmission. All of these advances are contributing to a future in which public health can be better protected, while simultaneously sustaining important economic and societal functions.

What about China, the coronavirus epicenter?

China, with Earth’s largest population and second-largest economy, is worth its own look. In 2009, an estimated 28 percent of Chinese citizens had internet access, increasing to 54 percent in 2017, with rates over 70 percent in major population centers. There are now more internet users in China than in any other country. 98.6 percent of Chinese users access the internet through mobile devices. Only 26 percent of Chinese citizens were using social media in 2013, growing to 60 percent by 2016. Going forward, even with government intervention, it is difficult to conceive of a situation in which important public health information is unavailable or delayed to the extent that it has been during previous periods like SARS and H1N1.

Not only is access to technology significantly greater, but the power and capacity of technology is increasing exponentially. The world is quickly transforming from a 4G to a 5G platform, which is said to deliver 50 times faster speed, 10 times less latency, and 1,000 times the capacity of 4G. We have yet to fully tap its potential, but the implications for artificial intelligence, public health, commerce, and education are significant—perhaps signaling even greater optimism that we can fight a future outbreak.

Final Thoughts

Coronavirus is deadly. We have not yet come close to solving the problem and must take it seriously. But better information is leading to public health improvements in early detection, screening, treatment, education, disease containment, mobilization of medical resources, rapid data capture and analysis, as well as rapid and effective vaccine development and delivery. More broadly, improvements are being developed in supply chains, manufacturing solutions, virtual organizational structures, business continuity strategies, online education, and the list goes on.

Most are market-driven technological advances to meet basic and simple incentives stemming from consumers’ needs. As a society, we would be wise to support regulatory and policy innovations which reward the continued development and dissemination of technological advances, drug development and dissemination, the free and unfiltered access and exchange of information, alternative education delivery methods and nimble and flexible approaches to challenges of all sorts.

We can’t change the fact that the coronavirus is here, but we can be optimistic that people (the greatest natural resource on Earth) will learn, adjust, create, innovate, and ultimately manage this problem and create lasting improvements as a result. At the present time, the most productive course of action is to heed the advice of the experts—while maintaining our rational sense of optimism rooted in a proven history of human innovation, creativity, and hard work. Let’s wash our hands, take time away as needed, and get back to work.


Written with Brett Dalton, vice president for finance and operations at Baylor University.

Brett Dalton

Brett Dalton is the chief business officer at Baylor University. He previously served as executive vice president of finance and operations at Clemson University. Mr. Dalton has a bachelor’s and master’s degree in economics from Clemson.

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Bruce Yandle

yandle

Bruce Yandle is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of the Clemson University College of Business and Behavioral Science.

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