What if the 2020s Became the Roaring Twenties of Our Generation?
The reasons for hope are legitimate.
The coronavirus pandemic took the world by surprise in early 2020. Within a few months, all the certainties we thought we had were gone. Everyone then realized how uncertain the world we were living in was.
For almost a year now, we have been living at the pace of this coronavirus pandemic that has brought most of the world's major economies to a standstill. The rapid arrival on the market of vaccines that are more than 90% effective against this coronavirus, however, seems to clear the way.
Massive vaccination campaigns have started all over the world. At the current rate of progress, everyone hopes that the days will be beautiful in the fall. Once we are all vaccinated, we will be able to resume our lives almost as before.
I say almost because we will all necessarily want to enjoy life tenfold after the long, gloomy months we have known since the beginning of 2020.
Of course, it is easier to imagine dark scenarios. By mutating, the coronavirus could escape the vaccines already injected into tens of millions of people, or the treatments that researchers are currently finishing developing. Worse still, society's awakening could see many companies that have been kept alive by state stimulus plans go bankrupt.
Money could eventually run out for the banks or the States, triggering a terrible financial crisis. The fact that global debt has reached $277T by the end of 2020 is obviously not reassuring. The risk of a global debt crisis hangs over the world more than ever.
The current situation is reminiscent of the one that prevailed before the Roaring Twenties
However, the situation we are currently experiencing is reminiscent of the one experienced by previous generations a century ago. At the time, it was already easy to imagine a grim future. The First World War had just killed 20 million men and women. The Spanish flu epidemic had killed even more people.
The economic fabrics of the great world powers were in tatters. Public debt was colossal for many countries. Yet production began to jump dramatically in the decade of the 1920s around the world.
Hundreds of millions of people were eager to live and enjoy life. This stimulated the world of culture, be it painting, music, dance, or literature. This energy of the 1920s would give birth to a decade of phenomenal prosperity that would later be called the Roaring Twenties.
Even more than the result of a furious desire to live, these Roaring Twenties were the culmination of a new industrial revolution that began before the First World War. In the factories, electricity replaced steam. Ford assembly lines were multiplying. Work became better organized. Mass consumption began, with the appearance of household appliances and cars.
At the time of writing, we are in February 2021. Nothing like this seems to appear yet. However, at least three major technological breakthroughs are already at work. The coronavirus pandemic has made it possible to loosen the brakes that limited their ripple effect.
The digital revolution is still in its infancy
The first breakthrough at work here is also the one that seems to you the least effective: the digital revolution. Indeed, the Internet entered our lives a quarter of a century ago. The computer is even in its seventies. However, artificial intelligence is still in the making. Let's not forget that oil and electricity did not change the lives of most people overnight.
Tackling, testing, and exploiting such general-purpose technology always takes time. A whole generation is not too much.
To understand this, three American economists, Erik Brynjolfsson, Daniel Rock, and Chad Syverson, identified what they called the Productivity J-Curve. Initially, new technologies bring gains that we don't see. Productivity even seems to slow down. Then these productivity gains suddenly become very visible.
What these three researchers describe is exactly what happened with computer science, and could happen again in the years to come with artificial intelligence.
The pandemic has shown a breakthrough underway in the field of biology
The second breakthrough at work is in the field of biology.
The most obvious advance can be seen in the arrival in less than a year of a vaccine against a pandemic such as the coronavirus. This feat was achieved by using a new approach, via messenger RNA (mRNA), which had actually been the object of research for three decades.
In this field of biology, other major advances are underway.
I am thinking here, for example, of the three-dimensional description of proteins, which will allow us to better understand how they function. This has been achieved by the AlphaFold artificial intelligence program of DeepMind, the startup bought out by Google.
The ecological and energy transition becomes a priority
The third area I am thinking of is the ecological and energy transition. It's not just the creation of a Tech bubble that explains Tesla's arrival among the ten most valued companies in the world.
After more than a century where oil was king, things are going to change. In particular, the car is going to change energy. Beyond that, immense progress has been made in renewable energies, even if storage is still a major obstacle.
All the stimulus plans decided last year in the world's major economies have given pride of place to the ecological transition. This is now becoming a major issue. Investors are also increasingly looking in this direction.
Some hedge funds are even asking for compliance with specific ecological criteria before investing.
The Roaring Twenties could be waiting for us once the pandemic is behind us
For the three revolutions I have just mentioned, the coronavirus pandemic has broken big locks. On the digital side, companies have had no choice but to exploit to the full the possibilities offered by new tools to organize work away from the office.
A good example of this is the phenomenal success of the Zoom videoconferencing system. The system has been in existence since 2013, but the number of users increased 20-fold last year to 200 million. In an emergency, changes that seemed impossible were made in a matter of days.
On the biological side, the acceleration has been tremendous on vaccines. In 2018, Bill Gates warned that the world was not ready for a global pandemic that was bound to occur in the future. Bill Gates said that as it stands at that time, it would have taken 4 to 5 years to produce an effective vaccine against the sudden appearance of a new, unknown virus.
The need to act quickly in 2020 paved the way for new funding models combining grants and purchase commitments. This has enabled the creation of an effective vaccine in just nine months.
Finally, on the environmental side, governments and businesses worked hard during the pandemic instead of putting the issue on the back burner. This courageous and responsible attitude surprised many people.
Even if the indicators of success will not be the same as those of the 1920s, the reasons to hope that the 2020s will become the Roaring Twenties of our generation are quite legitimate. If these Roaring Twenties do take place, then it will be time to remember the lessons of the past so that these joyous years are not followed by sinister 1930s, as was, unfortunately, the case in the 1930s.
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