3 types of regulatory changes after Coronavirus crisis

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Coronavirus has caused one of the biggest crisis we have experienced post World War Two. To manage the crisis governments are implementing extreme measures such as lockdowns, travel and trade bans, reduction in democracy, and radical changes in funding and human resources. While some of these are necessary temporary measures it is not clear how will governments behave when the crisis ends. Companies should prepare to innovate and adapt to the new rules in all cases.

We recognize three general types of regulatory changes:

Get the economy going
Government control is lower while business support is increased in order to stimulate growth. Economy is the top priority resulting in stronger and faster growth. Specific regulation to prevent the new crisis based on hard experience will be implemented, but this will not protect the society from a new unpredictable crisis. Taxes and regulation will not increase in a significant manner. Innovation will be almost unlimited.

Take it a bit slower
Government control is slightly stricter in order to prevent the emergence of a new crisis. This will result in slower recovery but it might extend the following growth period. Regulation will still be focused on prevention of similar crisis and recovery from this one. Taxes and regulation will slightly increase. Innovation will be slightly limited.

Since we are at it, let’s fix few more things
Government control is substantially stricter in order to fix other issues such as climate crisis or other diseases. Since the power of government was put in full motion its momentum will be used to curb the issues which have been delayed and lingering. This will result in extension of design of the new rules. This period may last for several years. This situation will also be used for changes which are in the interests of specific groups only. Taxes and laws will increase. Innovation will be limited by heavy regulation and resulting conflicts.

Disclaimer: Purpose of this article, like most of our articles, is to inspire specific thinking which can result in higher level of preparation for whatever comes next. Nothing more.

Written by: Nikola Tosic
Publishing date: 15 Apr 2020