What do workplace cultures, drone deliveries, and interest rates have in common? 

They have each been profoundly shaped by the COVID-19 pandemic. But right now—to the chagrin of investors and those who study markets—we don’t yet know to what extent they may have been transformed forever. So many of us are working to recalibrate our businesses and investments amid these uncertainties.

These are just some of the topics covered during my latest “Q Factor” podcast with Dr. Nicholas Christakis, Yale social scientist and physician and author of Apollo's Arrow: The Profound and Enduring Impact of Coronavirus on the Way We Live. In our conversation, Dr. Christakis takes us through the shifts in our society that earlier pandemics have brought about, and what we can expect in the aftermath of COVID-19. 

As Dr. Christakis puts it, “plagues are not new to our species, they are just new to us.” There’s a lot we can learn, as investors and as a society, from the pandemics we’ve confronted since the beginning of human history—to prepare us for life and commerce after COVID-19.  

Risk and Innovation 

We see some early evidence that the COVID-19 pandemic is dampening risk tolerance. I’ve seen signs of this myself already in the rising savings rate across the economy. And Dr. Christakis’ research bears this out as well: Historically, people become more risk-averse during and immediately after a pandemic, because they see saving money as a hedge against a health catastrophe or economic collapse. Over the long term, though, Dr. Christakis says that plagues don’t seem to change our overall risk tolerance as a species. In fact, we often see a reversal in these trends once the threat of the pandemic has passed—just think of the Roaring Twenties in the years after the 1918 flu pandemic. So we shouldn’t expect this time of austerity to last much longer. 

Dr. Christakis also offered some examples of innovations that were born out of the pandemic that could explode in popularity and adoption. Drone delivery, videoconferencing technology, and mRNA vaccines all existed before the pandemic, but COVID-19 effectively “stepped on the gas” and spurred their development. And there are more innovations in the pipeline that are not yet widespread—with inventors stuck at home, patent filings actually rose throughout the pandemic. We both see a greater role for entrepreneurial risk-taking and development in the years ahead.

The Workplace and the Workforce

As the father of a 19-year-old college student about to enter the workforce, I’ve been feeling like this is an exciting time to be an innovative young person who’s about to start their career. Dr. Christakis agrees—he notes that COVID-19 has accelerated some workplace trends, and upended others, making this a particularly dynamic time to be in the labor force. As measured by the Job Quality Index I’ve helped develop, we still have much more work to do to ensure that the jobs we are creating in this era and beyond harness the full talent and creativity of all workers and treat them with respect and dignity. Either way, we know we aren’t going back to the way we used to work, and businesses large and small are figuring out how to develop workplace cultures in an increasingly online world. 

While these wage and employment trends are obviously still developing, Dr. Christakis has found that pandemics tend to cause wages to rise and interest rates to fall over the twenty years that follow, with mass death shrinking the workforce while demand for labor stays the same or grows. But since COVID-19 was, fortunately, not as lethal as other pandemics—especially not for younger, working-age people—we may not see a similar effect. And despite some early evidence, it’s still too early to conclude whether COVID-19 caused a “baby bust” that will ripple through the economy in the decades to come. 

The Future of Cities 

Like other pandemics before it, COVID-19 caused masses of people to flee from large cities. Think of your friends in New York City who headed upstate in March 2020 or the millions of young people who temporarily moved back in with their families. While many are returning to cities, the past year raises important questions about whether people will continue to want to live in expensive, densely-populated areas. Additionally, the rapid shift to telework has prompted business leaders to rethink the real estate they need, and some are already scaling down their presence in large cities. 

Dr. Christakis takes a brighter, longer view on the future of cities—8,000 years longer, to be exact—in which we’ve seen a progressive rise in urbanization. Time and again, he has seen cities rally from pandemics, because they are stimulating, exciting places that people want to be. Of course, we now have groundbreaking technology that allows people to experience some of that excitement and connection from a distance. But despite these alternatives and temporary challenges, we can likely expect cities, and real estate prices, to come roaring back before too long. 

It was a thought-provoking look at the past, present, and future of pandemics. Listen to our full conversation: Nicholas Christakis: How COVID-19 Changed Culture

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