To flatten the curve of the COVID-19 outbreak, radical measures of social distancing are currently being rolled out in an increasing number of countries. People are being urged – or instructed – to isolate themselves at home. In many countries, schools are closed. The same is true of theatres, bars, and cinemas. Travel for both leisure and business is advised against. Borders are shutting.
Most people presume that all these measures to combat the virus will be temporary, and that at some point — in two, six, or perhaps 12 months — life will be back to normal and business as usual. To some extent, this may be true. But many changes could well be permanent.
Social systems, be it whole economies or individual organisations, are inert and very hard to change. Over time, firms develop into complex and bureaucratic structures, with so many ingrained routines that they are almost impossible to change. Economies too follow a largely path-dependent trajectory. This means that they usually resist radical change, and instead follow a path which more often than not is triggered by a small event or historical accident. Even if the Democratic presidential candidate, Bernie Sanders, and his supporters might like to see it, the US will never become Denmark.
But in times of fundamental crisis, a window of opportunity for change opens up. Sometimes, this window of opportunity is purposefully leveraged to change the course of action. For example, in the wake of the Fukushima disaster in 2011, Chancellor Angela Merkel decided, quite haphazardly, that Germany would discontinue its reliance on nuclear power. In other cases, revolutionary change happens almost by accident, as was the case with the fall of the Berlin Wall.