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The COVID-19 test

COVID-19 is a huge public test of governments’ capacity to lead their societies through a crisis. Many thousands of lives have already been lost, yet we are still assembling a crude map of where we find ourselves and how we got here, let alone where we might be headed. We have no timescale for how long the journey will take, an evolving sense of what obstacles we may encounter and what life might be like when eventually we reach our destination – with the novel Coronavirus hopefully contained by a combination of a vaccine, surveillance and our own constrained behaviours.

At a global level, the crisis is still in its early days. Generalisations are therefore dangerous. Yet we are beginning to form a picture of the societies that appear, so far, to have limited the spread of the disease and the resulting loss of life. And we are beginning to appreciate some of the questions with which we will need to grapple in the coming months and years.

Successful states have dynamic capabilities

Our early perceptions of what worked in tackling the crisis were heavily influenced by China’s draconian lockdown and the state’s mass mobilisation of health resources. That initially suggested that large, authoritarian states might do better. But as the virus spread beyond Hubei province and across the globe, we have had the responses of a much wider range of states upon which to draw.

States that seem to have done relatively well – in terms of limiting the loss of life, so far – have included the relatively authoritarian, like Singapore, but also the avowedly democratic, like Denmark; the large, like Germany, but also the small, like Taiwan; the urban, high tech and digitally adept, like South Korea, and the more rural, agrarian and dispersed, like New Zealand.

So what are the common features of these diverse places that have meant they have coped better?

All have been able to mobilise national responses. The crisis has underlined the importance of the nation state to protect its own citizens. Nationalisation has been a hallmark of the early responses: tight border controls; government underwriting of companies and wages. That contrasts with the 2008 financial crisis which brought a swift global response from central banks. The financial crisis perhaps marked the high point of globalisation; the COVID-19 crisis may accelerate a retreat from it, even if in time the crisis demands global coordination.

What has enabled nation states to respond effectively?

It seems clear that well-prepared states have done better. Those with more recent experiences of coping with an epidemic have more current institutional memory to draw upon. The obvious examples are those in southeast Asia that experienced the SARS crisis – which includes not only Singapore and South Korea but also Malaysia, Vietnam, Burma and Thailand. The UK, once having been well-prepared, may have let its guard down. One criticism of the US response is that the once mighty Centre for Disease Control, like other Federal machinery, has been dangerously run down, withering that institutional memory.

As well as preparedness, speed has also mattered. The governments that have done well have learned fast, made the most of early warnings, and turned on a sixpence when required. The Czech Republic was one of the few places to impose a lockdown before it had a confirmed case. Australia made the most of learning from the unfolding catastrophe in Europe: on 29 April when the UK reported more than 4,000 new infections, Australia reported 10. The New Zealand Government initially said a memorial service to mark the anniversary of the Christchurch terrorist attacks would go ahead and then overnight decided to impose one of the strictest lockdowns in the world; in late April it announced that it had eliminated community transmission of the virus.

As well as speed, successful government action has orchestrated its different arms to meet a common goal. Effective action stems from the dynamic combination of different capabilities. It is not about one thing – testing, ventilators, ICU capacity, important though these all are – but about pulling together many systems at the same time, public and private, social distancing and health care, testing and businesses large and small, civil society and trade unions. Seattle seems to have had better outcomes than New York, partly because their government has worked more effectively with health services. Similar reasons might be why the Italian region of Veneto has done so much better than nearby Lombardy.

Effective states have also found the right balance between centralised and decentralised initiatives. China managed to localise the outbreak to Wuhan by making it a national priority and then pouring the huge resources of the national state into that region. Germany’s system of regional subsidiarity has coped well. The US response, in contrast, has been marked by constant tensions between federal and state politicians.

All of this has provided a very public test of the quality of political leadership. Capable political leadership has risen above partisanship and party fragmentation, through a mixture of the considered and evidence-based with the bold and decisive; the technocratic with the emotionally intelligent; the display of strength combined with vulnerability. Emmanuel Macron has candidly admitted to making mistakes. It has been argued that governments with female leaders have done relatively well; Mette Frederiksen in Denmark and Jacinda Ardern in New Zealand among them. Certainly Angela Merkel, a scientist by training, has been able to talk with authority about transmission rates and yet also connect with people emotionally.

However, perhaps the most important point about effective leadership is that it is not about individuals, whether they are men or women: effective leadership has been a shared endeavour with politicians working with scientists and public health officials, sharing the responsibility and the limelight.

Systems and solidarity

Yet governments and their leaders can only do so much. What successful places also seem to have done is to find a dynamic combination of systems and solidarity.

Societies that can rely on strong yet adaptive systems seem to be doing better. Some of the most important systems in this crisis are obviously countries’ health systems. That said, in the UK it’s becoming clearer that the focus on that system of acute hospitals initially diverted attention from the challenges faced in the far more dispersed and often overlooked care sector with its 58,000 local care homes, run by hundreds of local authorities and companies. It remains to be seen whether one outcome of the crisis might be for health and social care to be seen as a more integrated system.

Yet hospitals can only work if the systems around them are effective. Germany’s methodical testing is a case in point. South Korea is leading the way in tracking and tracing systems using digital technologies. Procurement and sourcing is a critical – and often overlooked – skill. Systems only work if people are prepared to collaborate across different disciplines, because they understand why different systems need to connect, from the macro to the micro.

Effective systems are not enough on their own, however. They depend on a matching capacity for social solidarity, especially in the face of grave human costs. In South Korea, which has the most comprehensive systems for testing, tracking and tracing, that takes the form of collective conformity and compliance. Eom Joong-sik, an infectious-disease physician advising the government, told the New Yorker magazine: “All of the control and containment procedures essentially rely on the same thing: the cooperation and responsible conduct of the citizenry.” Denmark has coped well because its well-developed, citizen-centric welfare state already marries flexibility with security.

Not all these models come from the developed world. One of the most impressive examples of a capable state, with a good health system, working in close co-ordination with an active civil society to bring the outbreak under control, is the Indian state of Kerala – which mounted an early and aggressive response. Kerala has been helped by its long history of participatory planning, high levels of literacy and extensive, grass-roots, primary health care. In 2018, it had a dress rehearsal when it managed an outbreak of the deadly Nipah virus.

In South Korea and China, state-led systems have been dominant, keeping a check on citizen behaviour. But in other places, well-organised systems of social solidarity seem to have made up for state weakness. For example, Greece’s protracted economic crisis has created highly resilient, battle-hardened citizens, who are used to helping one another rather than relying on the state. At the outset of the outbreak the Greek Government understood that after a decade of austerity its health system would not cope unless most of the burden of stopping the spread of the virus was carried by civil society.

Public and private

Another important aspect of how countries have responded – and will likely fare in the coming months – is the way public and private have worked together.

Markets have proven remarkably resilient where they have been able to operate. We still buy food from supermarkets and greengrocers. The supply chains leading to our fridges have held up well (although these food systems will need to be reconfigured as the crisis unfolds). In Germany and South Korea, both vaunted for their responses to COVID-19, health services rely on social insurance, as well as private provision. There are clearly many areas where markets can operate more efficiently than the state.

However, efficiency can be the enemy of resilience. States and systems which relied upon just-in-time contracts to deliver vital services or supplies have done less well than those which have kept a degree of spare capacity.

Moreover, there is no free market solution to this crisis. In 2008, the state stepped in as the lender of last resort to the banking system. The state is now the employer and investor of last resort: the US Federal Reserve has taken the unprecedented step of buying corporate bonds. Out of necessity, the state has taken on a much larger role in the economy, and this may prove difficult to unwind, at least anytime soon. The possible consequences of those emergency actions are just starting to become apparent. A lengthy recession will require the government to continue to be intensively involved in keeping the economy afloat, perhaps taking stakes in the firms it ends up supporting.

However, it is unfeasible to imagine the government being able to support the entire economy, other than temporarily. So in time the state will have to make painful choices about which companies, regions and industries it supports. On what basis will these decisions be taken if the normal market economy is still suspended, subordinated to a larger public purpose: to protect citizens?

Inevitably, we will eventually return to a market economy of sorts. That future economy may be more digital and less face-to-face: high street retail was already in deep trouble before the crisis and may well never recover. Trade will be curtailed for some time, as will travel, tourism, hospitality and airlines – some of which may never rebound. Economies with a significant manufacturing sector may do better than those, like the UK, where so much economic activity depends on people gathering in shops, restaurants, bars, clubs, theatres and stadiums. Making and trading physical things made in factories full of machines but with very few people may be a good business model for the recovery.

Financial markets will still be there, not least because they have helped to supply the credit to help us through the crisis. What we do not know is what kind of market economy this will be. Will the state retreat from its role as emergency funder of last resort, or will it step forward to play a more active role in shaping a purpose-driven economy, organised to protect citizens (from various threats, including the climate crisis as well as pandemics) rather than to promote consumption, profit and growth? The COVID-19 crisis has made that question a very real one, not merely a theoretical possibility.

The path forward

What kind of innovation will eventually bring us out of this crisis, and help us adapt to the post-crisis world? A different story might be emerging.

The crisis could be a vindication of the Silicon Valley model: digital platforms will likely emerge more powerful. (The video conferencing service Zoom, founded in 2011, is now worth more than all the US airlines put together.) Disruptive bio-tech startups, funded by venture capital, may yet produce a vaccine. Many of us will adopt mobile health monitoring apps. When, and if, a vaccine becomes available it will likely be made by private pharmaceuticals companies.

Yet all of this will depend on a collective, shared effort to find vaccines, which relies on public and philanthropic funders, and global scientific cooperation. And apps and vaccines alone will not provide a long-term solution to our many problems without the public, social and civic innovation to create new systems of health and social care. Other important social innovations may emerge from the crisis. As of 24 April, 151 countries had planned, introduced or adapted 684 social protection measures in response to COVID-19. These include experiments with forms of universal basic income. This could be a passing phenomenon, just a response to an emergency. Or it could mark the start of a new kind of social safety net for those in insecure employment.

This may mark the emergence of a new model of mass, mission-driven innovation as an alternative to the search for Silicon Valley Unicorns.

Leaders and citizens

Based on what we have seen in these first months of the crisis, the societies that appear to be doing better have decisive leaders; who can combine effective systems and high levels of social solidarity; within a cohesive, national narrative; in which the market follows the government’s lead. The ability of a society to avoid crude and costly lockdowns will likely rest on the combination of intelligent, well-informed comprehensive systems for testing, tracing and treatment, combined with citizen solidarity, responsibility and mutual care.

What is far less clear is how this period of becalmed containment, combined with deep uncertainty, will influence the ideas, values and cultures of citizens. Will it change what we want from governments?

The boundaries between the public and the private are being redrawn – not just economically but legally and culturally. After remarkably little debate, many private property rights have been suspended: shops and businesses have been told when they can open. Citizens’ have been trusting and acquiescent as their freedoms of movement and association have been curtailed.

This crisis could leave many people seeking greater certainty and control, which may only come through acceptance of mass testing, monitoring and tracing - and with that a communitarian view that individual freedom has to be heavily conditioned by our obligations to others. It is hard to know whether this will prove temporary, or create an entirely new map of the relationships between freedoms and obligations. It is already pushing societies to think hard about the values to which they adhere.

Certainly, this is a period of civic heroism, especially among health and social-care workers making extraordinary sacrifices on behalf of all of us, but also by bus and delivery drivers, shop assistants, refuse collectors and other key workers. Will a spirit of shared responsibility and solidarity be one of the lasting legacies of the crisis, an antidote to the spirit of angry, divisive populism that came before it? Or are the current disagreements (and in a few places skirmishes) over lockdowns a harbinger of much more intense debates about rights to freedom, responsibilities to others, and the powers of the state? Do the COVID-19 culture wars beckon?

As we said, we still know so little, other than that the crisis will unfold in waves and affect people and places in quite different ways. For that reason, we will revisit this analysis in three- to six- months’ time to see what was right, what was wrong, what was missed and what has changed. The question is where might we be headed beyond the fog of uncertainty that envelopes us. That is the topic of the next essay.


Charles Leadbeater

Charles Leadbeater is a Nesta Fellow and leading authority on innovation and creativity. He has advised companies, cities and governments around the world on innovation strategy.

Ravi Gurumurthy

Ravi Gurumurthy

Ravi Gurumurthy

Group Chief Executive Officer

Ravi Gurumurthy is Group Chief Executive Officer, joining Nesta as Chief Executive in December 2019.

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Christopher Haley

Christopher Haley

Christopher Haley

Head of New Technology & Startup Research

Chris led Nesta's research interests into how startups and new technologies can drive economic growth, and what this means for businesses, intermediaries and for the government.

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