Introduction
Our way of life will change radically as a result of the ongoing global pandemic and the likely recession (or worse) that will follow. In this essay, a group of Stikeman Elliott partners have collected some of our early thoughts on the challenges and opportunities that may emerge. We recognize that, at times like this, it is even harder than usual to resist the lazy reflex to seize the moment as an opportunity to show why what we already thought has been proven to be true. Hopefully, our readers will challenge us on this!
It's impossible to predict the future. We hope that by sharing with clients and friends some of our thoughts and musings/speculations, those of you inclined to do so might respond in kind with your own. Over time, we hope to "drill down" on some of these issues (and others). We would also be happy to consider the implications of our predictions, and others, for those interested in such discussions.
Milton Friedman famously commented that:
Only a crisis – actual or perceived – produces real change. When that crisis occurs the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and credible until the politically impossible becomes the politically inevitable.1
A Changing Social Contract
Through the course of this crisis, the vulnerability of segments of our own society (and of individual and global inequalities) will be thrown into even greater relief. Think, for example, of the elderly who lack social care or of the low paid and self-employed who have no financial cushion to fall back on and upon whose work society relies. Older workers who have lost much of their savings will likely have to work longer (which, in turn, will impact younger workers for some time to come). The pandemic is placing a dangerous strain on pre-existing inequalities — in personal and national wealth, labour forces, and intergenerationally (as we borrow heavily from the future to try to maintain current standards of living).
A stronger sense that we are members of a collective whole could lead to increased public demands for more interventionist measures to protect our disadvantaged — a development that governments will find harder to resist after their current readiness to override the primacy of markets. Likewise, the massive public expenditures being made could lead to a wholesale redesign of tax mechanisms with an increased focus on issues such as equity, taxing out of country suppliers, and reducing global opportunities for tax avoidance.
In the world of business, companies will increasingly be expected to play a different role than one of pure value maximization. There will be increased demands on companies to address the greater good and act as leaders and in ways that serve a broad range of stakeholders, often when governments are not up to the task2. Those who understand and can effectively respond to this insight, already reflected in the tendency of our courts to respond and give meaning to such expectations3 , are more likely to survive and prosper.
Changing Nature of Work, Education, Health Care and other Services
It is likely that many of the new forms of behaviour we adopt through necessity during this crisis will prove to be sticky. Most involve staying at (or closer to) home or how and what we consume, and will likely have profound impacts on how we work (remotely and with substantially less need for commuting), how we are educated, and how we receive health care. A slew of businesses that have hesitated to embrace digital technologies are being forced to do so in order to survive (and are unlikely to revert to traditional operations). This will introduce extraordinary opportunities to innovate and develop more cost-effective business models, while potentially allowing most businesses to be "global" simply by being local. The importance of robust telecommunications, financial and public service delivery infrastructure has become paramount, and the monopolies of localized or geographically concentrated service providers (think, for example, of education) will be contested. The disruption to certain sectors will be extreme while the opportunities that will be afforded to others are virtually unlimited. These macro changes will introduce other changes. Think again here, for example, of shifts in energy usage patterns.
While innovation is continuous, the singular focus on the pandemic and the responses to it is uniquely engaging the medical and healthcare industry, which is already facing a large population of "baby boomers" with longevity expectations and the means to pursue "healthfulness". This focus should yield startling results that transcend the current pandemic, potentially altering society in significant ways.
Footnotes
1. Milton Friedman, Capitalism and Freedom (University of Chicago Press 1962).
2. The decision of the NBA to suspend its season has been credited for demonstrating the gravity of the pandemic to many Americans.
3. A notable example was the Supreme Court of Canada's decision in BCE Inc. v. 1976 Debentureholders [2008] 3 SCR 560, in which the court articulated its stakeholder (vs. shareholder) based view of directors' statutory duties and specifically discussed its willingness to "look beyond legality, to what is fair, given all of the interests at play" to address conduct that is "wrongful even if it not actually unlawful" (para 71). Although behaviour did not change radically, the language of the court did, presaging future changes. We have already seen this begin to play out in a variety of commercial contexts, including judicial intrusions on the concept of limited liability in corporate law and the willingness of courts to re-arrange priorities in the context of insolvency law, in each instance focused on protecting a broader set of stakeholders.
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