Before starting our publication, let´s revisit our outline for the week:

1. Antecedents or Preliminary Background of the Coronavirus. Done last Friday 20th of March. √
2. The shape of this viral infectious disease. Done on the 23rd of March.√
3. Effects when lacking preparedness (concerning an uncertain pandemic).  Done on 24^th of march. √
4. Society isolated.  Benefits and Issues. Done yesterday. √
5. The global economy and its bemols when it comes to health contagion.Today´s objective. √
6. Disruptive technologies and methodologies applied to attack the sickness. Different approaches. Pros and Cons.
7. How to keep going when in times of a pandemic.

Today we will share with you some reflections about the 5^th outline subject: The global economy and its bemols when it comes to health contagion.

Globalization has been hit at its roots. The pandemic “venue” has been and it is thrilling the premises of globalization without clemency. Globalization is a model of doing business that has prevailed after WWII. Its fundamental premise rests in the philosophy of a more integrated and interdependent global economic system to produce where it is more convenient to create shareholder value, expand revenues, drive down costs and boost net profits. Regardless of the political economy of a country, let´s bounce from the more or less socialist or capitalist, the globalization has proved to be a business model with an excessive concentration in creating wealth for the shareholders, at expense of the common good in the society.

From national to global. The globalization started once nations decided to move progressively away from a world in which national economies were relatively isolated from each other by: barriers to cross border trade or investments, location, distance-time zones, languages, different national government regulations, culture and of course, national competitive strategy business systems. Globalization, to my point of view, has two main philosophical veins:

1. A single global market place. A global market is almost standard. That is why globalization started with commodities and communications. Whatever we buy either consumer goods, industrial materials, technology inputs or financial services, these needs are global and a certain degree of homogeneity across markets is required.
2. Globalization of production: The sourcing of goods and services from different locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labor, energy, land, and capital). The idea is to lower the overall cost structure or improve quality conquering efficiency and economies of scale on the global order.

The drivers of globalization are the decline in trading barriers to the free flow of goods, services, regulatory norms and availability of international capital that has occurred since the end of WWII; and technological change, mainly through the internet, in communications, information processing and logistics (transportation). Recently the NAIQI combo tech has been added to the Internet (Nanotechnology, Artificial Intelligence, Quantum Supremacy, and the Internet)

“Closing the eyes to Disruption Technologies”. An aquarelle exercise by Eleonora Escalante. Made with love on paper Fabriano Artistico 300GSM. Size: 28cm x 20cm Photo reference: HYM glasses.

Globalization wouldn´t have been possible without technology. The role of technological change has been one of the crucial pillars for globalization. The development of microprocessors enabled the explosive growth of high-power, low-cost computing, and the telecommunications global highway. The internet revolution (starting in the 90s) and the wave of the communications privatization catapulted the global economy. Information technologies were transformed to become not just the channel, but the backbone structure of its robust model. E-commerce has facilitated the global electronic market place, and recently the social media tools opened a door for communications for everyone, through the cheap smart-phones that we hold in our pockets. In addition to the development of communications and information technologies, transportation technologies have added their share to globalization: jet air-crafts, super-freighters, and containerization. The containerization revolutionized the transportation business, significantly lowering the costs of shipping goods over long distances.

If the crisis continues for more than a quarter of a year (4 months), be sure that the whole global system and its industries will collapse. No industry can be saved in the case of a pandemic. For the techies´ bullies:  even if the information technologies, communications, and journalism can continue to do their job for some days at its best after the global pandemic was pronounced by the World Health Organization; regardless if countries are more capitalists than socialists or the other way around, the whole world will go down the drain.

First, as we have already observed in the news, the pandemic has hit the combo of industries directly connected to mobility in the “global village”: tourism-hospitality services, transportation, transit, and its related economic sectors. Then if the pandemic is not restrained, once the amount of infected exceeds the capacity of the health care and sanitary system, the pandemic strikes the whole “cure” system value chain (because of lack of personnel, hospital supplies, health equipment (like ventilators), etc. Hospital infrastructure facilities crash, and of course the funerary industry can´t bear the exponential if not a logarithmic increase in the number of casualties. A global epidemic disease without a cure as this one has to be attacked by lockdowns, safer stay-at-home strategies, social distancing, etc. to avoid the spread of the virus within a minimum amount of days. Otherwise, we cultivate the expansive wave of the sanitary crisis.

An economic-financial crisis unfolds. When people can´t work nor produce, trade or keep their business afloat how do you expect us to survive? Government rescue packages are a palliative method, a temporary measure to help those who are unproductive because of the lockdown… but if the sanitary crisis is not controlled, inevitably, and even with rescue packages, a whole economic crisis will proceed.  Food security and money flows are not for a lifetime: a door is opened to a financial-economic global disease. Without liquidity the rest of industries (including the governments and public administration) can´t continue as normal: please visit the NAICS to revisit the list of economic sectors, industries, subindustries prepared by the Office of the President of the USA.  https://www.census.gov/eos/www/naics/2017NAICS/2017_NAICS_Manual.pdf . All these industries crumple in the event of an economic-financial crisis.

Society crisis begins and we will become zombies. Without financial sponsors, even the most robust and strong information technologies sectors won´t be able to stay afloat for longer days. In consequence, the whole internet and its related NAIQI technologies (Nanotechnology, Artificial Intelligence, Quantum Supremacy, and the Internet) will be shut down. Inescapably.

The domino effect from one single sickness in China which started in December of 2019, can banish the whole globalization system, including our past history and survival. Once people are in chaos, the zombies’ tales that we have seen at the cinema or TV series will become a reality. Unavoidably.

Au revoir!.

Tomorrow we will continue with the subject number 6. Disruptive technologies and methodologies applied to attack the sickness. Different approaches. Pros and Cons.

Published by eleonoraescalantestrategy

Corporate Strategy Artist, San Salvador, El Salvador View all posts by eleonoraescalantestrategy