World faces delayed economic recovery due to Covid pandemic, CEOs claim

The world is facing a long and difficult road towards full economic recovery despite the benefits of advanced technology, the potential imminent development for a vaccine for the Covid-19 virus and government stimulus packages that have so far pumped $10 trillion (€8.58 trillion) into the global economy, according to a panel of business and trade leaders at the 2020 Global Manufacturing and Industrialisation Summit (GMIS).

The heads of Mubadala Investment Company, Honeywell, Siemens and Schneider Electric Company joined a keynote panel on day 2 of the summit where they discussed how the government are best dealing with crises in an age of advanced technology.

The panellists were united in their praise for swift government action to protect jobs and businesses amid the widespread lockdown restrictions much of the world had put in place to quell the spread of the virus. However, many warned that it would lead to economic stagnation that could last until at least 2022, especially given the looming threat of a second and future waves.

Khaldoon Khalifa Al Mubarak, Managing Director and Group Chief Executive Officer, Mubadala Investment Company concurred that swift government actions may have prevented business shutdowns, but may have yet-unseen long-lasting economic ramifications.

He said: “We have seen the positive economic reaction to the financial steps taken by most governments, particularly in the large economies around the world. Getting back to a more stable period of economic activity, and visibility into business growth will take time.”

Darius Adamczyk, Chairman and CEO of Honeywell, agreed that governments had acted quickly and decisively and said that attention must now turn to financing the vast economic stimulus that has been required to support the world’s economies during the pandemic.

He said: “There’s been an incredible level of stimulus in the United States, the EU and other economies as well. Now governments around the world are going to have to figure out a smart way to pay for this that doesn't damage the economies going forward.”

He added that economic stimulus was the way forward to dealing with a crisis on this level, adding that medical solutions were likely to be a catalyst for a full recovery.

Jean-Pascal Tricoire, Chairman and CEO of Schneider Electric, warned there was a danger there would be a lost generation of youth who would struggle to find opportunities in a depressed economy in the coming years.

He said: “Protective measures have understandably focused on vulnerable older people in our societies, but the people who are getting punished because they can’t get jobs are the youngsters, and they are the future of our world.

“We work closely with governments and other institutions to propose internships, and try to make sure that there is not a generation that is left behind.”

Tricoire added that government stimulus should also be directed towards SMEs which provide the lifeblood of the economy.

He concluded: “Large companies like us live within an ecosystem of many suppliers and smaller companies and it's very important that we help those companies through the crisis and actually use it to help them modernise and digitise, to be more sustainable and prepare for the future.”

Joe Kaeser, CEO of Siemens, agreed that it was vital for government rescue packages to be channelled into the right areas, such as future-oriented businesses.

He said: “It's crucially important that we not only have trillions of dollars of government money and stimulus but also that this money is invested into future-oriented and not backwards-oriented industries because they are going to die anyway. And if we are not mindful about this today, we risk forfeiting much of the future.”

He added it was likely there would be a vaccine soon enough that could aid in full global recovery.

The panellists generally agreed that a crisis such as this will act as a catalyst towards accelerating digital transformation in most sectors of the economy as well as a greater emphasis on sustainability.

Many of them have begun shifting their portfolios with a greater emphasis on sustainability and innovation within the industry.

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