Maybe it was all the Zoom toasts over the holiday pledging a return to in-person celebrations next year, but I’ve heard too much talk about the timetable for a return to “normal.” That is, there seems to be an expectation that after enough immunizations, life can somehow resume the rhythms and patterns that defined life in 2019. I don’t share this expectation: we have seen consequential political transitions in the EU, UK, and US, for starters. There has been a global financial recession. 2020 saw extreme climate events, including wildfires and hurricanes, that presage more such disasters. Nobody knows how many more businesses will close, permanently, in 2021. For one example, many people assembled Airbnb empires of multiple rental properties that now present impossible mortgage payments. It’s one thing to prevent evictions in the pandemic, but I doubt courts will stop foreclosures of such speculative properties whose impact on residential neighborhoods is not wholly positive. That’s just an initial accounting of the impact.
Here are a few questions identifying sectors, markets, and institutions that will emerge from 2020-21 forever changed.
1) What is the new media mix?
The breakout of TikTok into mass consciousness has certainly been noteworthy over the past year, but it’s not the only important story. The game platform Roblox has been around for about a decade, but its hold on the under-10 demographic is stronger now than ever. TikTok is a key player in 12-24, and podcasts consumed voraciously by middle-agers are seeing huge investment by Amazon, Spotify, and others. YouTube has gained traction among every segment from 5 to 95. Two questions: who wins 21-34, especially if Facebook must divest Instagram? Also, what happens to legacy media: radio is in trouble for sure, and it’s not clear that network television can adapt to the streaming model. ABC, given both its Disney parent and its ESPN sister network, should be in better shape than CBS, for example, but how will we know?
2) What is the future of “date-night” entertainment?
Music venues are getting some bailout money, iirc, but I’m guessing Live Nation and its kin will see money sooner than small-footprint venues. Musicians are but one class of artists hit hard by the Covid recession, and many are doing clever podcasts, instructional videos, and the like to keep the electric bill paid, but this industry will bear watching. Similarly, what is the future of movie theaters? What, in particular, is the future of movie theaters in shopping malls, which have their own existential changes to confront? Going to the mall for a meal, some strolling, and a movie will not be as appealing in 2022 as it was in 2002, for lots of reasons. Restaurants, meanwhile, are closing by the thousands: how will new entrepreneurs address the mix of meal delivery, carry-out, catering, and interior table service? Will new ethnic cuisines fill some of the empty storefronts? Will the meal-delivery apps’ attractiveness persist post-Covid? A larger question informs many economic ones: how much will our cocooning get thrown off in a collective binge of sociality, and how much will staying in (from dining, from work, from shopping) define the new normal?
3) What’s ahead for the tech sector?
Will there be a new category of device or application that rearranges the landscape as the PC, Internet browser, search engine, or smartphone did? Will so many revenue streams continue to be ad-based? How will computer/app/smartphone companies address the mobility market (see #6 below)? How many Internet platforms will survive? Is Pinterest, for example, a feature or a product? Will health tech be a major new consumer market? Will Silicon Valley maintain its primacy? HP, Oracle, and Palantir are leaving, Google is distributing its operations, and California’s many drawbacks — regulatory, climatic, and cost-of-living — provide other areas with ample opportunity to demonstrate their attractiveness, particularly in a work from home world.
4) How will governments address budget shortfalls?
Covid-related expenses coupled with drops in tax receipts are presenting many cities and states with a grim scenario for the next few years. Education, social safety nets, policing, and other functions will shrink: many states have balanced budget provisions that preclude any form of borrowing. States with large tourism sectors (Nevada and Hawaii for starters) are especially hard hit. How will private philanthropy co-evolve with shrinking state and local programs? How much seed corn will be destroyed? That is, how many qualified job applicants will lack key skills in 2 or 10 years? How many foregone investments, in whatever form, will deprive future years of returns on industrial attractiveness, after-school programs, or mass transit maintenance? How many “deaths of despair” and “diseases of despair” will plague our towns and states going forward?
5) What happens to education?
Apart from the budget crunch noted above, schools will cope with Covid-related fallout for years. How many teachers will get sick and/or burn out after this trying year? How will pedagogy evolve to include remote learning as a routine component? At the college and university level, schools with large endowments have enjoyed robust investment returns; all institutions with seen exceptional (one-time) costs soar, particularly for investments with no long-term payoff. Plexiglas shields come to mind, but so do (in the instance of Syracuse University) hundreds of thousands of saliva tests. Academic hiring freezes are prudent, given the uncertainties involved, but are creating logjams in PhD programs in which advanced students are staying on rather than graduate, see student loans come due, and face bleak job prospects. Maybe the biggest question: how many of the critically valuable (for both their skills and their tuition dollars) international students a) will be allowed and b) will choose to attend college or graduate school in the US vs Australia, Canada, France, Germany, or elsewhere?
6) How will people get around?
Electric cars are obviously big news, but bicycles are even more interesting, especially at the global level. Paris is changing its infrastructure to be more bike-friendly, driven by 2020's modal shift from subways (where the fear of Covid dropped ridership) to cycling at a mass level. Like bikes, standing desks are enjoying a work from home sales surge, but cycling is far healthier still. As the electric conversion proceeds, charging will continue to be an issue, for urban street-parkers in particular. As work from home changes the frequency and nature of commuting, what happens to urban office space and the associated parking infrastructure?
Many eyebrows were raised by the recent news story that Apple’s Project Titan is still targeting a consumer-facing automotive product for 2024 or so. More interesting, to me, is Amazon, which has made no announcement. Consider:
-Amazon is learning a lot about drones, including path planning, machine vision, and vehicular control: three key competences of autonomous driving.
-Amazon employs some of the best machine learning talent on the planet.
-Amazon is building a fleet of more than 100,000 delivery vehicles (for comparison, the USPS fleet numbers about 200,000). Using autonomy internally or in a B2B scenario could be a smarter play than targeting individuals: Google Glass would have fared much better had it targeted industrial and commercial use cases rather than consumer behavior, a fact not lost on Jeff Bezos I’m sure.
-Amazon has effectively infinite computing capacity (and vast programming capacity) on tap.
That’s four reasons, constituting a unique footprint (UPS lacks AI server farms; Google lacks a massive fleet of vehicles), why Amazon could shake up mobility. Oh, and they just bought these guys.
That’s a cursory list: work, dining, mobility, education, entertainment, and media are all in play. I’m similarly interested in travel (who’s buying airline or ski resort stock right now?), supply chains/manufacturing (can Boeing reclaim its mojo?), and most important, health care. Ohio State just found heart damage in 15% of athletes who had tested Covid-positive (a scary-big percentage), but there’s no diagnostic as of yet to inspect the virus’s long-term impact on the brain regardless of whether senses of smell/taste rebound.
Yes Covid-19 has a relatively low death rate, so far, but in the nightmare scenario, millions of people worldwide could be cardio-pulmonary-neurological time bombs. It’s not improbable that we’ll see lung scarring, heart malfunction, and/or cognitive/emotional damage on a massive scale, threatening long-term debilitation (possibly including accelerated onset of Alzheimer’s) of huge numbers of people, some of whom were silently infected in 2020. (I’m not free-form speculating here: see here and here for starters.) That sure doesn’t sound like “the good old days” to me.
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