On predictions: the economy after the pandemic

 After my previous speculative post, let's look ahead at an actual catastrophe going on right now, and the long term implications of current events.

First off, it is clear that lockdowns have disproportionately hit some sectors harder than others, and large firms have had a better time than small, individual, and family-owned ones (as this Babylon Bee article satirically points out). I would therefore expect to see even more consolidation as small firms fail to reopen and larger firms either merge or are taken over. Also longer term I would expect there to be less start-up and business creation, with individuals becoming more risk-averse and there being fewer opportunities to attract investment, lower consumer confidence, and higher barriers to raising capital. It would still be possible to have sole trader/self-employed trade like plumbing or decorating, and selling online via platforms like eBay will still be viable, but overall I expect a future where large PLC's and multinationals are an ever-increasing part of the economy.

Looking at individual sectors, hospitality and tourism have been hardest hit so I would expect there to be fewer independent cafes, restaurants, and pubs plus hotels and B&B's. Clothes stores have also been hard hit, with Debenhams and Arcadia already gone, the sector has not been helped by the fact that supermarkets have been allowed to stay open and also sell clothes. The drive to online sales will continue and consolidate into a few mega online brands. The high street will decline further. Live music and nightlife will also struggle to return to normal, as will cinemas- the big multiplexes are unlikely to return (especially with the increase in streaming services. A few art-house cinemas like the Prince of Wales in London might survive for film aficionados. 

As for air travel, I'm surprised there haven't been any major airlines go under yet.) as will tour operators and package holiday firms. I suspect there will be a push not to return to pre covid levels of air travel under the justification of the 'climate emergency ('see', the greens will say 'you didn't need to take a holiday abroad after all' ). We may see a return to the post WW2 era of having only 2 national carriers flying between countries, or the big 3 partnerships (OneWorld, Star Alliance, and Sky Team) fully merge into a 'big 3' global carriers. The worst-case could even see rationing of flights by carbon credits or something similar. Needless to say, with reduced capacity and higher prices flights will be a luxury out of reach for the average person, and jet travel will go back to being a glamorous, high-end pursuit like in the 1950s. 

The rest of us will have to make do with local holidays, so this could result in a revival of the English seaside resort towns, as well as more ferry operators and coach trips. to France, Spain, etc being the only affordable option for foreign travel. Countries like Thailand and Vietnam which had large tourism sectors will be particularly hard hit. Development of aviation technology for the civil sector will largely cease, we might see improvements of existing models but I doubt there will be any new airliners developed, Boeing was already in trouble due to the 737MAX fiasco and will only survive thanks to their military divisions, while Airbus will continue thanks to European subsidy. 

Overall I suspect we have a less diverse economy concentrated in fewer, large firms and adversity to risk leading to less innovation and growth, and a lot fewer travel options, which as a travel junkie this to me is most depressing.