TLDR: As COVID19 vaccines are finally starting to come online, the question for business is shifting from “when will a vaccine be approved”, but rather “when will a vaccine enable a return to normal.” The most important units of analysis are moving away from epidemiology and toward geopolitics, supply chains, and healthcare delivery. The implications are that timelines for back to normal will differ widely – by country and by demographic.
What we’re talking about: Every decision-maker needs to know when the world can return to normal following the COVID-19 pandemic, especially in industries where demand is dependent on the return of customers being able to put worries about infection behind them. For the largest global companies, significant geographic exposure makes this a multi-billion dollar question.
Most of the discussion so far in planning for an end to the pandemic is about vaccines, focusing on when a vaccine might be approved and epidemiological questions about immune responses and viral proteins. We believe much of this discussion is not helpful for businesses, for three main reasons:
- Vaccine approval in and of itself is not the answer– herd immunity that enables a return to normal is
- The timeline for vaccine approval is increasingly shortening and the real uncertainty driving the timeline of vaccine-driven herd immunity is thus moving away from questions of epidemiology, and toward questions of geopolitics, supply chains, and healthcare delivery
- The outcomes will vary widely by country, making much of the business question at the country, rather than global health, level
In sum, decision makers need to switch attention away from vaccine approvals, where the timeline is shortening and uncertainty decreasing, and towards the path to herd immunity, where time ranges are wide, uncertainty high, and country outcomes will vary widely.
Lessons to learn: What’s needed for business decision-makers is an understanding of the moving pieces involved in a “return to normal”, an accurate forecast of the timeline in each market, and a way to continually update this forecast with new information in a fast-changing environment,
Developed in consultation with public health and supply chain experts, we believe there are six main elements to focus on in order to understand the path to herd immunity by country (see figure 1).
Figure 1 – Path to normal framework
The issues are complex. Each area has its own factors driving uncertainty, its own types of data available, and interacts with the other issues in numerous ways. However, with the right data, logic, and assumptions, it is possible to understand the outlook at a detailed level.
In environments of macro uncertainty, the goal for decision makers is to create clarity in planning in spite of fast-changing outlooks and significant amounts of noise. Achieving this on the question of “returning to normal” would enable a range of improvements in outcomes, from demand-planning precision, efficiencies in operational choices about opening and closing, market opportunity identification, cost optimization, supply chain risk management, capital investment decisions, and trade-offs around worker safety.