According to Ipsos data, the fears of 54% of Italians of a pandemic outbreak in April have ebbed considerably. The June data show less concern over contagion (one-third of Italians) and more over economic recession. The Covid-19 contagion peak triggered a broad sharing of values such as social cohesion, interdependence, civic sensitivity, the importance of volunteerism and a greater assumption of responsibility for social capital and faith in institutions – with the exception of the court system and the European Union. We are now witnessing a steady decline in social cohesion, a gradual return to social fragmentation and major concern over economic measures aimed at ending the recession and reviving the economy.
Advertising market data – the real business thermometer – confirm this trend: the first quarter of 2020 showed a 22% slump in investments in advertising that spiked to 42% in April. Even digital advertising – the strongest pre-Covid – has seen a 10% drop. Estimates for the whole of 2020 are grim, with predicted losses of 1.5 billion euro for the overall sector. This dramatic scenario would call for additional tax credits beyond the exiting 50% (the current 50 million euros already earmarked cannot possibly even minimally offset the losses), the creation of new, more adequate platforms for managing the crisis and a major push toward digitalization and the improved digital literacy of the work force.
The quality of leadership has been a determining factor for all those Italian companies – especially those quoted on the stock exchange – that have been able to weather the pandemic’s impact. The ability not only to read numbers and big data, but also to react rapidly, create empathy and decide what choices to make have permitted corporate leaders to produce good performance during the most difficult crisis since 1929. Boards of directors have also worked well when they have chosen to advance realistic agendas and promote dialogue and unity. On the financial front too, companies made more prudent by the 2008 downturn have been able to employ instruments and methodologies that have helped them avoid collapse.
The greatest determining factor for the future is going to be time: the duration of our co-existence with the virus and resolution of the healthcare problem. A period of just 12-18 months would wreak heavy damage not only on Italy but also on the entire global economy. If the pandemic were to prolong itself, a serious collapse of the entire financial system is not to be ruled out. It is going to be critical to protect Italian family incomes and to boost domestic consumption; it must not be forgotten that, despite Italy’s excellent record on exports, the domestic market accounts for 60% of consumption.
Certainly, the prevailing impetus toward digitalization will both remain constant and gain momentum; indeed, eight weeks of pandemic have been equal to five years of digital development. The US and other stock exchanges witnessed the growth of high tech, e-commerce, healthcare and logistics firms, with an exponential increase in business volumes that has not automatically led to increased revenues due to the rising costs of the pandemic. In any case, technology will be central to resolving present and future health crises, and companies – especially in the pharmaceutical sector – are already getting ready.
Among other unprecedented phenomena, the pandemic has brought out a return to specialized skills – neglected over recent years in favor of a bewildering “everyone can do everything” credo – and the delegation of authority, which are going to be decisive to the recovery and to reviving of the role of middle management and institutions.