Part 2 | Back to Work Amidst the COVID19 Outbreak
Off The Blocks, Vol 111 | April 21, 2020
|Apr 21|| 4|
The COVID-19 pandemic is creating a lot of turbulence worldwide. Most industries have been shut down and companies will see a sharp fall in their business as both supply and demand are disrupted. After having assessed the situation, we are working with our partners to resolve some of the most complicated and challenging issues to get the economy back on its feet. We are tackling it head-on with our portfolio company Vottun and an ecosystem of partners in the US and Europe. To be a part of the ecosystem, please reach out to Aman Johar (firstname.lastname@example.org).
Part 1 of this series: Back to Work Amidst the COVID19 Outbreak - A Safe Approach
Part 2: Back to Work Amidst the COVID19 Outbreak - Building on A Safe Approach
Quarantines imposed by the coronavirus worldwide have ensured that more people are spending more time with their families. That by itself is a good thing.
There is some grim news too. The demand for products and services has collapsed too, perhaps, because, staying at home curbs expenses. Take oil for example. Just a few short years ago, we couldn’t produce enough to meet the ever-increasing demand. In just the last few weeks of demand disruption (lack of travel), the price of WTI went negative for the first time ever falling to -$37.63 a barrel as we ran out of room to store the excess. By some estimates, the demand today is lower by 29M barrels a day as compared to the year before.
Businesses are now bearing the brunt of the impact of these quarantines. And every industry is impacted. 90% of airline capacity is now idle. Long haul international flights that account for a bulk of an airline's profits are at their lowest capacity, averaging only half a million seats a weak as opposed to an average of 5.9M before coronavirus shut borders. The fresh flower market, an epitome of modern capitalism that accounts for $8.5B of trade annually, is all but dead. As demand has evaporated suddenly, the complex, intertwined, supply chains responsible for delivering fresh flowers in Montreal from Peru via an auction process in Amsterdam are completely broken.
The impact is starting to be felt in perishable supplies and is a major cause of worry. In America, as schools, restaurants and other commercial consumers have closed, milk farmers, unable to adapt their consumer chains, are being forced to dump milk - an estimated 7% of milk was dumped in the last week alone. Meat plants are shutting down as workers start to get infected with the coronavirus. More than 10% of the hog capacity is now closed. Coupled with movement restrictions, lack of transparency and disruptions in the supply chains, the spread of the virus will create problems for food distribution.
Image: Over 4,000 gallons of milk pour down the drain last week at Azevedo Family Dairy in Buhl, Idaho
The longer this lasts, the more acute the impact will be.
It is a hammer blow for millions more who can only eat if they earn a wage. Lockdowns and global economic recession have already decimated their nest eggs. It only takes one more shock – like Covid-19 – to push them over the edge. We must collectively act now to mitigate the impact of this global catastrophe.
- Dr Arif Husain, chief economist at the World Food Programme
The demand shock, at least partially, can be attributed to a lack of consumer trust and confidence. There is evidence that consumers had started to cut back even before the lockdowns came into effect. In San Francisco, restaurant traffic was down 72% as compared to last year. The fear of going out to a restaurant, a ballpark, mall and the general idea of being next to strangers with unknown health status is real and is adding to consumer and business anxiety in unpredictable ways.
The Phase In, Phase Out Approach to Implementation
In this changing world, businesses have an added responsibility to ensure that they can provide a safe and trusted environment for their patrons. Proactive businesses can gain a long term competitive edge and enjoy customer confidence and patronage for a long time to come. In addition, it boosts their local community presence and involvement. So, it is imperative for businesses to be proactive and start aligning the vectors that will benefit them in a post-coronavirus world.
Last week, I outlined a safe approach on how to reopen our economy gradually.
Since then, we have been working together with a tight group of executives to align their resources with the demands of creating such a solution. My conversations have been wide-ranging - from CXOs from startups in the Silicon Valley, to global companies in healthcare, technology, retail, entertainment, insurance, management consultants, and supply chain sectors. Most CXOs that I have interacted with in the last two weeks are not sure where the new normal lies or how to think about aligning themselves towards where the markets might be. One common theme that stood out is that nearly all of them are looking at external leadership to help align the vectors that can help them reopen their businesses that bear some semblance to their pre-Coronavirus operations while allowing them to shed their past inefficient practices.
The logistics of opening up impose an enormous challenge and some of the questions on top of their minds are:
How can we ensure safety for our employees? Safety for our customers? Safety for our vendors?
How do I monitor their health on a continuous basis so that they don’t pose a risk to others?
How do we think about data privacy, HIPAA, and other regulatory issues?
Where is the intersection of federal/state guidelines and available solutions that can help us address our specific concerns?
These are big concerns and won’t be solved by going solo. Nor will they be solved by opening-up every business immediately without proper safeguards that disincentivize people and the creation of hotspots that can potentially spread the virus again. Added to that the data privacy concerns are a big deal for any organization to tackle alone. One way to handle the data privacy concerns is to think about this as a short(er) term solution until a vaccine or a cure is developed and we can put this in the rearview mirror. As discussed in the previous post, such an approach should be able to create immunity passports that layout a “Proof of Health” for people on a periodic basis. Any changes in health status can be monitored and appropriate action can be taken in coordination with local healthcare and government authorities.
We have been talking to employers who are now leaning towards implementing Immunity Passports as a way for the safety of their own workplaces and employees. One such approach that creates a ‘Proof of Health’ certificate could be implemented in three stages:
Phase 1: create an ecosystem of partners including federal/state officials, medical providers, employers to create a process for people to follow. This will allow selected, essential services, employees, and workers to resume operations in a controlled manner. Understand the logistics, tracking and tracing concerns, limit access to health and location data, work with local government and medical providers to keep records. It may not be necessary to keep most records for more than 45 days, and can periodically be purged. For access to records, the guiding philosophy must be based on “What is not explicitly allowed is denied”. Compliance with new laws such as GDPR and CCPA, should be adhered to. Implementation timeline: 2-3 months.
Phase 2: Scale the program to incorporate as many stakeholders is necessary for improved operations, while still encouraging people to work remotely as much as they can. Most companies are already investing in digital infrastructure, so this should not be an issue. As such, many implementations will be localized to the extent that employers or public facilities are implementing the solutions locally for their offices, sports stadiums, etc. Best practices learned from Phase 1 should be benchmarked and evaluated as the system starts to onboard more people. Particular attention should be placed on the interoperability with EMR systems, cross-pollination (both authorized and inadvertent) of data with other data from the business operations. Implementation Timeline: 3 months to when a vaccine/cure is available
Phase OUT: It is imperative to remember that this system does not encroach on the freedoms that we cherish, enjoy and hold dear as a people and society. Constant surveillance should never be allowed to become the new normal in the wake of the severe restrictions that have already been placed on our lives and livelihoods. Like all electronic systems, centralized or decentralized, this system has a potential for abuse and it should never be permitted to encroach on our fundamental rights. Once people have developed antibodies, or there is a cure or a vaccine in the market, the system must recognize a “right to be forgotten”. For medical purposes, the EMRs are capable of adding patient records as necessary and no additional repository of such information is necessary. All other implementations and data stores must be phased out.
These are unprecedented times and call for solutions that transcend competitive barriers and foster a spirit of collaboration. The exact environment and actions would obviously need to be implemented locally, with different approaches that can account for differences in healthcare infrastructure available or the scale of infected communities etc. With close cooperation and collaboration amongst developers, healthcare providers, private and Govt entities, we hope to create an ecosystem of partners incentivized to help countries around the world slow the spread of COVID-19 and accelerate a return of everyday life.
Whether you are a critic or a supporter of this approach, we invite you to join the ecosystem and help us make it better. Feel free to connect with Aman Johar (email@example.com) to jumpstart a conversation.
Proteum is a global blockchain investment and advisory firm that works with public, private and start-up companies to help them transition into the world of blockchains and decentralized applications. We help companies strategically build their ecosystem and unique capabilities so that they can own and control their future. Velocity, our innovation hub, invests in and accelerates the time to market for startups and emerging ideas.