📉 Pandemic Aftershocks

Three weeks ago, a significant shift was marked in the economic narrative of Europe as Germany officially plunged into recession and currencies around the globe seem to be doing crazy things.

Such an event has mirrored a broader stagnation across the EU, where the thriving community of venture capital has gradually slowed down as well.

Yet amid this slowdown, Artificial Intelligence (AI) investment appears to be the only area that keeps advancing and war on the continent continues to restructure the world order right in front of our eyes. Aligning with this trend, the persistent layoffs across numerous medium to large companies intensifies the doom.

Yikes.

But what about the pandemic? Are their hidden debt aftershocks? Is their a hidden pandemic calculus at play? I think so.

We had an enormous pull forward effect from the pandemic. So, I think the economic doom we are seeing now is primarily due to post-pandemic effects now catching up with us.

It is true that the pandemic, with its ruinous consequences, paradoxically ignited a flame of innovation within healthcare. The industry experienced a transformative shift towards telemedicine, health apps, online pharmacies, and the breakthrough of mRNA vaccines.

However, beneath the surface, the pandemic exerted a profound econmoic impact on large companies and banks, shocking financially and operationally to a greater extent than they may readily admit.

The pandemic saw many companies resort to overstaffing, a risk management measure that, albeit unintentionally, added layers of complexity to the already socioeconomic complex situation.

And the effects of the pandemic appear to have been following a delayed timeline here in europe in particular, emerging approximately ~10 to 12 months post-pandemic.

Echoing the recent comments of Stanley Druckenmiller, we should anticipate these aftershocks to persist, leaving many corporations in a vulnerable state.

But there is also something more interesting at play.

The rise of remote work, another offspring of the pandemic, has fundamentally reshaped our perception and execution of professional responsibilities.

As someone who enjoys the benefits of working from home, I can attest to the positive impact it has had on my mental health. The reduction in daily commuting stress, for example, has provided benefits I may not fully recognize.

Yet, this shift is not without its tensions.

Large companies are currently wrestling with the complex challenge of reincorporating their remote workforces back into physical offices. This task requires a critical reevaluation of how we utilize office spaces, causing ripple effects in the traditional dynamics of employer-employee interaction and communication.

The repercussions of these changes have extended beyond the confines of the physical office. Workspaces have infiltrated our homes, causing us to question long-standing norms around employee visibility and how we determine the value of labor.

Indeed, the pandemic has redefined "ways of working," leading to the emergence of truly distributed remote and virtual teams. It's a new operational landscape that, while challenging, does provide new opportunities.

However, the public discourse surrounding these emerging working dynamics, both in public and private spheres, has been fragmented.

There appears to be a lack of coherent dialogue addressing these post-pandemic changes.

The increasing ability of companies to operate without a fixed physical workforce and the growing comfort of employees in transient remote employment relationships signify an erosion of traditional employer-employee loyalties.

Furthermore, the rise of generative AI has potentially distracted many companies from focusing more carefully on the post-pandemic effects of work and employer-employee loyalty.

It's complicated I know. Like everything. But let's not overlook it.