Protecting Lives and Livelihoods across the Global Economy
This 2019 report by the World Economic Forum and the Harvard Global Health Institute warned of an outbreak like COVID-19 and told businesses to step up to the increasing risk of pandemics.
A cautionary tale
Launched in January 2019, Outbreak Readiness and Business Impact highlighted the growing risk of infectious disease and cautioned businesses that pandemics were worryingly underrepresented in considerations of risk. It proposed tailored insights on the impact of outbreaks, offering strategies for effective response and resilience. There was stark warning that “the world remains ill-prepared to detect and respond to outbreaks and is not prepared to respond to a significant pandemic threat”. It said outbreaks and epidemics could cause catastrophic economic damage when they occur.
Neurobiologically conditioned, as we are, to pay attention to stark contrasts and sudden changes, we often overlook slow moving changes in our environments that may herald disastrous consequences. The evolution of infectious disease risk is one such change.—Peter Sands, Research Fellow, Harvard Global Health Institute
Just one year later, the novel coronavirus forced the Chinese government to issue the largest quarantine order in human history, affecting an estimated 45 million people. Now, within just a few months, global cases of the virus (as of March 11) have surpassed 120,000, a number of countries with community transmission have closed schools and cancelled mass gatherings and some borders have been closed. The WHO today officially declared the outbreak a pandemic. More disruption will follow.
The WHO is cautiously optimistic about containing the virus, but the impact on the economy may dent that optimism more profoundly than the worrying global health implications of the virus itself. Markets have plummeted due to fears of a coronavirus-driven recession, travel restrictions and quarantines are affecting hundreds of millions of people, disrupting just-in-time supply chains and triggering sales warnings across technology, automotive, consumer goods, pharmaceutical and other industries.
What is the World Economic Forum doing about the coronavirus outbreak?
Responding to the COVID-19 pandemic requires global cooperation among governments, international organizations and the business community, which is at the centre of the World Economic Forum’s mission as the International Organization for Public-Private Cooperation.
Since its launch on 11 March, the Forum’s COVID Action Platform has brought together 1,667 stakeholders from 1,106 businesses and organizations to mitigate the risk and impact of the unprecedented global health emergency that is COVID-19.
The platform is created with the support of the World Health Organization and is open to all businesses and industry groups, as well as other stakeholders, aiming to integrate and inform joint action.
As an organization, the Forum has a track record of supporting efforts to contain epidemics. In 2017, at our Annual Meeting, the Coalition for Epidemic Preparedness Innovations (CEPI) was launched – bringing together experts from government, business, health, academia and civil society to accelerate the development of vaccines. CEPI is currently supporting the race to develop a vaccine against this strand of the coronavirus.
Resilience is a duty of care to society and economies
The report cited economists’ estimations that pandemics would cause average annual economic losses of 0.7% of global GDP over the coming decades – a threat similar in scale to that of climate change. It said that with the risks increasing, “we cannot afford to continue like this”.
Given the panic and neglect cycle of pandemic preparedness, once COVID-19 is contained, much of the world is likely to return to complacency and remain under-prepared for the inevitable next outbreak. Businesses that invest in strategic, operational and financial resilience to emerging global risks will be better positioned to respond and recover.— Richard Smith-Bingham and and Kavitha Hariharan, Marsh & McLennan Advantage Insights
It set out how businesses should become pandemic-resilient by investing in strategic, operational and financial resistance and suggested that these measures present a duty of care to society and economies.
Rather than business leaders being “bewildered bystanders” of global disease outbreaks, the report urged them to step up to the threat of epidemics to shape a safer, more stable world for all. “So when the next infectious disease breaks, the world will be better positioned to respond and recover.”
Outbreaks in numbers
0.7%average annual losses in global GDP that economists estimate pandemics will cause in the coming decades
36hours or less: time it takes for an outbreak to travel from a remote village to any major city in the world
12,012outbreaks, comprising 44 million cases and affecting every country in the world, were recorded between 1980 and 2013
7,000new signals of potential outbreaks occur each month according to WHO (as of January 2019)
80%of countries that have assessed their preparedness are not ready to find, stop or prevent an epidemic
The age of pandemics. Why?
Several powerful global trends explain the increased frequency of disease outbreaks:
- Growth in travel, trade and connectivity. An outbreak can travel from a remote village to any major city in the world in less than 36 hours, and as we’ve seen with COVID-19, the economic or social disruption often travels faster and further.
- Growth of urbanization and associated high-density living, often in unhygienic conditions, promotes the spread of infectious disease. Currently, 55% of the world’s population lives in urban areas, with that proportion expected to increase to 68% by 2050.
- Increases in deforestation spur new outbreaks; loss of tree cover has been rising steadily over the past 17 years, and 31% of outbreaks of new and emerging diseases, such as the Nipah virus, Zika and Ebola, are linked to deforestation.
- Growing displacement of people, driven by persecution, conflict, emergencies or civil unrest, drives large populations to new places, often in poor conditions and with increased exposure to health threats. Among refugees, infectious diseases are some of the major causes of morbidity and mortality, and measles, diarrhoeal diseases, acute respiratory infection and malaria are primary causes of death.
- Climate change is leading to changes in transmission patterns of infectious disease, potentially accelerating outbreaks of Zika, malaria and dengue fever.
Going viral: panic, neglect and misinformation
No medical countermeasures, or insufficient ones if they exist, are available for both unknown pathogens and the majority of the most concerning pathogens. But this is only half the story. The rest is cultural and linked to fundamental flaws in human nature.
The cycle of panic and neglect
In 2005, 196 countries, including all WHO Member States, agreed to the International Health Regulations (IHR), a legally binding agreement to help the international community prevent and respond to acute public health risks that can potentially cross borders and threaten people worldwide.
There have also been promising efforts, such as the WHO R&D Blueprint and the new Coalition for Epidemic Preparedness Innovations, and significant progress has been made since the response to Ebola in West Africa between 2014 and 2016.
But unfortunately, a cycle of panic and neglect is more typical. World leaders are quick to discuss epidemic readiness on the heels of a major outbreak, calling for better preparation and new investments. Such was the case following the Ebola epidemic in West Africa in 2014, as well as the H1N1 and SARS outbreaks before that. While real progress often follows these calls, so does a genuine neglect of epidemic readiness.
Previous outbreaks provide worrying illustrations of this cycle of panic, neglect and ill-preparedness. A report by the World Bank International Working Group on Financing Preparedness charts examples:
- Following a string of outbreaks in the 1990s, calls grew for the IHR to be revised; however, these calls went unanswered until after the SARS crisis in 2002.
- The resulting 2005 revisions to the IHR were largely successful, but the 2009 H1N1 outbreak once again showed shortcomings in the global public health infrastructure.
- Although the IHR urge an international response that avoids unnecessary interference with international traffic and trade, governments often disregard this requirement. For example, throughout the Ebola epidemic in West Africa, WHO issued temporary recommendations advising that general travel restrictions were unnecessary. Nevertheless, WHO detected 41 instances of restrictions deemed to interfere with international travel.
- Despite similar guidance during the H1N1 influenza pandemic, half of the 56 countries responding to a survey advised their citizens to avoid travelling to affected states, while several denied permission to at least one mode of transport to embark or disembark due to illness on board, or closed their borders to citizens of affected states. The lack of a cohesive global approach was palpable then as now.
- Disruptive measures like these accompany most major outbreaks despite their high cost and questionable effectiveness.
Globalization magnifies effects
The potential economic losses from infectious disease outbreaks are massive, as suggested by recent events. Globalization has driven tremendous growth in both developed and emerging markets, and the greater freedom of movement of labour and capital has created increasingly interdependent economies. While this pattern has been a boon for development, it has also increased the risks posed by infectious disease outbreaks, with ripples spreading far.
Technology is an amplifier
Technology has also accelerated “informational contagion” across populations. The global public health community has traditionally focused its surveillance on pathogens themselves, monitoring the spread of viruses and bacteria through human and animal populations. As modern information technology accelerates the spread of information between people, however, “informational contagion” is rapidly growing as a contributor to the economic effects of infectious disease outbreaks.
One recent World Bank estimate suggests that only 39% of the economic losses from outbreaks are associated with effects on infected individuals. Rather, the bulk of the costs results from healthy people’s change of behaviour as they seek to avoid infection.
Consider the 2015 MERScoronavirus outbreak in South Korea: though less than 200 individuals were infected and only 38 died, nearly 17,000 people were quarantined at an estimated cost of $8.5 billion.
In a modern economy, relatively small numbers of infections could have massive economic effects that can extend far beyond the original outbreak’s footprint.
The South Korean MERS-coronavirus outbreak also showed how social media activity helped to thwart the concealment of which hospitals were housing MERS patients. Even if public health agencies publish accurate, timely and actionable information through official channels, many will still get their information on health issues from the media and other sources.
Return on investment: the role of business
The danger we face with COVID-19 is that after outbreaks are no longer in the headlines, epidemic readiness is frequently displaced on budgets and high-level agendas in favour of more immediate and visible priorities. But new outbreaks are certain to occur, and without sustained attention and financing, they are likely to again provoke panic.
For individual businesses, developing a better understanding of infectious disease risks and how they can be managed has clear financial benefits. For policy-makers, the better that businesses manage such risks, the more resilient the overall economy will be. Moreover, when business leaders are more aware of what’s at stake, maybe there will be a different dialogue about global health – from being a topic that rarely touches the radar screen of business leaders to being a subject worthy of attention, investment and advocacy.— Peter Sands, Research Fellow, Harvard Global Health Institute
A new public-private framework is needed to understand and communicate the effects of epidemics.
Businesses are ideally situated to contribute to pandemic preparedness and response, potentially averting losses to their bottom lines and populations at large. Through their ability to affect their employees’ behaviour, as well as through their sophisticated communications infrastructure and capacity to lobby and partner with governments, firms can be important participants in responding to the threat of outbreaks.
Understanding the behavioural effects on economies requires insights that extend beyond the biomedical sciences and draws on fields such as economics, sociology and social psychology.
The spread of COVID-19 is now demanding global cooperation among governments, international organizations and the business community. It has spurred the creation of the World Economic Forum’s COVID Action Platform.The global platform, the first of its kind, aims to convene the business community for collective action, protect people’s livelihoods and facilitate business continuity, and mobilize support for the COVID-19 response. It has been created with the support of the World Health Organization and is open to all businesses and industry groups, as well as other stakeholders, aiming to integrate and inform joint action.
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