Some changes in Covid-19 lockdown will be tough, but could be beneficial in years to come – Alan Knott-Craig

For many businesses, being in a lockdown due to the coronavirus means you have to be inventive to ensure that you remain productive and take most of your business online. It also means an end to the extensive business trips which may be a relief for some. For those who have been working online like Biznews; it is much easier to adapt. The fact that some services are supercharged like telemedicine and internet schooling could in fact be good for society and the business world. In times of crisis, nations are bolder in trying disruptive innovation. Many of the advances of modern society are powered by the technology of war. Alan Turing and his team developed the world’s first computer at Bletchley Park in the United Kingdom when they were trying to break the code generated by the Germans. Entrepreneur Alan Knott-Craig looks at the possible changes that will come to South Africa because of the coronavirus lockdown and says the concept of “Universal Basic Income is likely to be more widely accepted” and “schools will go online”, but also warns that some parts of the economy will simply cease to exist. – Linda van Tilburg

Never give up

By Alan Knott-Craig*

Ok, it’s time to panic.

The economy is taking a major hit.

Some parts of the economy will simply cease to exist.

The world is changing.

Cinemas will go out of business as studios release their movies directly to VOD platforms like Netflix.

Factories will fully automate to compensate for lack of workers (and the workers won’t strike).

Schools will go online. Not only will they go online, but the mediocre schools will fail.

Why limit the intake of a good school to only the number of kids who can fit in a classroom?

Same for universities.

That’s bad news for mediocrity. Why would you chase a mediocre in-person education in Pretoria East if you can opt-in for a great online education from Pretoria Boys/Girls?

The big sacrifice is that you can’t attend classes in person. The wealthy will still be privileged to afford in-person attendance, and the concomitant advantages of networking and deeper learning that come with it. But at least the rest of the world will not be locked out of the top educational content.

That doesn’t mean mediocre schools will cease to exist.

Kids still need to be minded whilst parents are at work. And kids still need to learn social skills (ie: how to bully, how no to bully, how to survive being bullied.)

Courts will change. No more driving the prisoners from jail to court every day. Just dial them in on Zoom.

Business will DEFINITELY change.

Many people are already realising that they don’t need to fly to Jhb for every single meeting.

Same goes for car-commuting. Why drive from Pta to Jhb in rush hour, every day, when you can structure your work affairs to be able to work from home and travel when roads are quiet.

This is good for the climate. Less travel = less carbon emissions.

The concept of Universal Basic Income (UBI) will be more widely accepted. Even the most libertarian of Americans are now calling for the government to give all citizens a monthly cheque of $1,600 to alleviate the financial pain of the economic crisis.

Many families will starve without these monies.

Once the UBI seal is broken, it will become more widely adopted. That’s good news, because all the car factories that have had to send their workers home will be replacing those workers with machines.

Those workers will not have jobs in the long run. UBI is here to stay.

Fortunately, UBI is not a giant leap for South Africa. We already pay monthly grants for the elderly, the disabled, and single parents. It won’t require a political revolution to include the unemployed.

The world’s governments are pumping liquidity into financial systems. Printing money. Lowering interest rates.

So will South Africa.

Debt will actually get cheaper. Possibly much cheaper. You may even be tempted to take out a loan simply to benefit from low interest rates.


Credit will kill you if you can’t service your monthly repayments. Taking out debt to buy the house you live in? Dumb idea.

Taking out debt to buy a commercial property that generates enough rental income to service the debt? Great idea. Unless the tenant is a real estate agent. Because that real estate agent is about to go out of business (and stop paying rent).

SA’s property market was already soft. It is now limpid.

That is terrible news if you’re trying to sell your property. Especially if you have debt behind that property.

It will take a while for the property market to recover. A year, or two, or three. Better to face reality today. If you can take the hit, do it and move on. If not, vasbyt.

The service & hospitality industries are probably the worst. Waitrons, Uber drivers, cleaners, all being put on unpaid leave, or laid-off, or idling at the airport pick-up zone.

The owners of these businesses are also under strain. They have monthly overheads to cover, debt to service.

If the restaurant owner goes under, then there will be no jobs when the crisis is over and people start eating out again. That means permanent unemployment for the previous staff.

On the bright side (excuse the pun), the idle state of the economy has alleviated electricity demand, which means no load shedding.

How will our government alleviate the pain?

Grants to businesses. Tax holidays. Loan repayment freezes.

These are powerful short-term measures to staunch the bleeding.

What about the long-term? How do we jump-start a stalled economy in 2021?

For that we need transformational projects. UBI is a good idea, but it requires tax revenues.

Tax revenues are directly correlated with GDP, ie: our economy.

Our economy is going to finish 2020 down.

That means less tax revenues, and no room for UBI.

We need transformational projects that grow the economy before we can implement transformational projects that support vulnerable communities.

The obvious one is broadband. Give every household in SA access to fast affordable broadband, enable home-schooling, and tele-commuting, and home-entertainment, and economic opportunity.

The World Bank estimates that for every 10% of broadband penetration, GDP is boosted by 1.28%.

SA currently has less than one million fixed broadband connections out of a total of thirteen million households. That is less than 10% penetration, which equates to 11.58% (9 x 1.28%) of untapped economic growth.

More than enough to fund UBI, enable online learning, and generally set SA on track for prosperity.

We have hope.

For those of us lucky enough to work in the broadband industry, that’s a purpose worth fighting for.

In the meantime we have to remain optimistic.

How to do that?

Let’s go back 79 years.

1941 was one of the direst years in the history of Great Britain.

Winston Churchill had been made prime minister, even though his party, the Conservatives, hated him.

In the midst of war, they were scheming to unseat him as leader. Politics were prioritized over what was good for the country.

Meanwhile, Nazi Germany controlled Europe and was launching bombing raids over London every day. Thousands of people were dying and being left homeless.

Britain’s warships and merchants were being sunk by U-boats. There was rationing of food.

There was no light at the end of the tunnel.

Sound familiar? A bit like South Africa today. A president battling his own party, fighting internal enemies whilst doing his best to save the country. Economic storm clouds everywhere, the Rand falling to R17,61/$, and the cherry on top:

A global pandemic that has already killed thousands, but is guaranteed to trigger the greatest economic crisis since Lehman’s went under in 2008.

No light.

In the midst of 1941, someone asked Churchill how he could remain an optimist.

Craig Rivett shares his answer:

“One evening, two frogs — an optimist and a pessimist — were hopping around a dairy.

Distracted by the number of flies and cows, they both fell into a vat half fill of milk.

Upon seeing the high of the walls and realising that there was no escape, the pessimist frog crawled into a ball and sank to the bottom.

The optimist frog saw the same walls and came to the same realisation as the pessimist frog, but instead of giving up, he decided to keep on swimming. He believed that if he stayed afloat long enough, something would save him.

So, he kept swimming and swimming, right through the night.

The next morning, because of his kicking, some of the milk had been churned into butter. He was then able to stand up and jump out to safety.

The moral of the story? No matter how bad it seems, keep swimming. You have no idea how the story is going to end, until it has ended.”

Churchill survived his party machinations. Japan attacked Pearl Harbour. The USA declared war on Japan. Germany declared war on the USA. The USA allied with Great Britain. And the Allies defeated the Axis Powers, ultimately resulting in liberal democracy prevailing as the winning form of government globally, and English becoming the lingua franca of the world.

From the darkest of dark places, Churchill (and Britain) triumphed. How?

Because he never gave up.

Remember that.

No matter how bleak the news of the world, keep swimming and paddling and kicking. You never know what’s going to happen.

Stay in the game.

Never give up.

PS: I was joking about “time to panic”. Don’t panic.

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