Innovation is cause for pandemic optimism

THE United States is entering a postMpandemic era. This is hapM pening primarily because of the one aspect of this pandemic that difM ferentiates it from all previous ones in history — the triumph of science. Within a year of CovidM19’s outbreak, the …orld sa… the emergence of several highMquality vaccines. This is truly breathtaking. A decade ago, the scientific consensus was that it took 10 to 15 years — and a lot of luck — to produce a vaccine for a ne… disease.

Over half the adult population in the United States has received at least one dose of the vaccine. Daily infection and hospitalizaM tion rates are dropping fast almost every…here; some states are even reporting zero daily Covid deaths. Of course, there are still dangers. Vaccination rates are slo…ing do…n, and ne… variants are cropping up.

Yet even …ith those caveats in mind, …e can look at the United States and imagine life after Covid. The forecast is mostly sunny.

The most striking aspect of postM pandemic America is likely to be a big economic boom. Unlike the 2008 financial crisis, the pandemic paralysis …ill probably be follo…ed by a sharp rebound. That’s partly because of the differing nature of the crisis, but largely because WashM ington has flooded the economy …ith money, so both businesses and individuals have cash to spend.

The last great pandemic, the 1918 influenza outbreak, was followed by the Roaring T…enties. It is too soon to tell …hether this one …ill usher in that kind of sustained gro…th, but there are reasons for optimism.

The most important of these is inM novation. Crises al…ays lead people to find new ways to do things, adopt ne… technologies and cast a…ay old practices. In the United States, the ability of large parts of the economy to function and excel in the digital realm — …hen the physical econoM my …as broadly shut do…n — has surprised even technoMoptimists.

These gains could endure. A salesM person told me, “I miss being able to meet …ith people in person. You lose something important. On the other hand, I have used the ne… technology to make literally 10 times as many sales calls every …eek comM pared to before Covid. It’s opened up a …hole ne… …orld for me.”

Even governments are innovatM ing. Ne… York City has announced that side…alk dining …ill become a permanent feature. It has officially abolished sno… days for schools, replacing them …ith online school. (Strangely, children do not see this as productivityMenhancing.)

We understand innovation mostM ly in hindsight. Fe… predicted in the early 1990s that productivity …ould rise sharply because of the …idespread use of information technology; nor did they foresee that it …ould taper off just as mysM teriously a fe… years later. But at a micro level, …e are …atching so many businesses, governments and people adapt to the Covid crisis, abandon old …ays and optimize for the future that productivity gains seem likely. Add to that the posM sibility of massive ne… investments in science and technology, and …e could see a virtuous cycle.

Europe is one step behind the United States because its vaccine rollout became mired in bureauM cratic problems. In many …ays, Europe’s vaccine debacle looked like America’s stumbles in the first phase of the pandemic. Now Europe has gotten its act together. Meanwhile, it has actually made a far more conseM quential decision: to borrow money backed by the continent’s strongest economies — Germany and France — and let all countries spend it on Covid recovery. This suggests Europe might soon look like America in its o…n second phase, marked by …idespread vaccinaM tions and a soaring economy. The

Europeans’ bold fiscal innovation could also mean a stronger EuroM pean Union in the future.

The dark side of this picture right no… is the developing …orld. CovidM19 is ravaging India, and it may also surge in places that so far have been largely spared, includM ing Africa. But even then, it’s still possible to imagine benefits. The crisis has jolted India to its core, shedding a harsh light on the counM try’s spra…ling, corrupt and badly run government. The country has flourished in the past few decades not because of its public sector but rather because of the rise of a dyM namic and efficient private sector. The pandemic is a …akeMup call that might force real government reM forms, particularly in public health, …hich could then trigger change in other dysfunctional sectors such as education. As it searches for gro…th and faces challenges in borro…ing, India is already enacting longM delayed economic reforms. Another sign that India might bounce back is its stock market, …hich has been stunningly resilient in the face of the Covid catastrophe.

I’m trying to look at the bright side of a terrible situation. There are real grounds to be optimistic that, grim as the pandemic has been, it could open up progress across the …orld.