1 00:00:00,160 --> 00:00:02,719 Speaker 1: I have a friend who laughed so much when he said, 2 00:00:02,759 --> 00:00:06,200 Speaker 1: but where did you call to me? The love nowhere 3 00:00:06,800 --> 00:00:11,799 Speaker 1: in And I said, look have a little shop store 4 00:00:11,840 --> 00:00:15,520 Speaker 1: where I can buy my groceries. I have this little 5 00:00:15,560 --> 00:00:19,480 Speaker 1: bank and they have a pharmacy. And there are two birds. 6 00:00:19,560 --> 00:00:21,960 Speaker 1: And then he said, why do you have a pharmacy? 7 00:00:21,960 --> 00:00:30,440 Speaker 1: Where do you need a pharmacy if you have to borrow? Hello, 8 00:00:30,480 --> 00:00:33,199 Speaker 1: and welcome to Stephanomics, the podcast that brings the global 9 00:00:33,240 --> 00:00:36,800 Speaker 1: economy to you. And that was Lowly Garthia, one of 10 00:00:36,880 --> 00:00:39,320 Speaker 1: many who has used the pandemic as a chance to 11 00:00:39,479 --> 00:00:43,760 Speaker 1: escape city life. Where we work, how we work, what 12 00:00:43,880 --> 00:00:46,839 Speaker 1: we're wearing when we work. Is that all really going 13 00:00:46,880 --> 00:00:49,360 Speaker 1: to change forever? More? In a year or two is 14 00:00:49,440 --> 00:00:52,279 Speaker 1: time where we wake up find we're all pretty much 15 00:00:52,320 --> 00:00:55,480 Speaker 1: doing what we were doing before COVID ninety. It's a 16 00:00:55,560 --> 00:00:57,280 Speaker 1: question we keep coming back to you on this show 17 00:00:57,560 --> 00:01:01,160 Speaker 1: because if work changes, the entire shape of our economy 18 00:01:01,360 --> 00:01:05,000 Speaker 1: might change too. Cities could shrink, a lot of low 19 00:01:05,040 --> 00:01:08,680 Speaker 1: skilled jobs in those cities could disappear, and governments could 20 00:01:08,720 --> 00:01:12,520 Speaker 1: find themselves having to completely rethink how they try to 21 00:01:12,600 --> 00:01:16,160 Speaker 1: tackle poverty and stimulate growth. In a minute, you'll hear 22 00:01:16,200 --> 00:01:19,400 Speaker 1: me talk about all of that to Spend Smith, one 23 00:01:19,400 --> 00:01:22,320 Speaker 1: of the co authors of a series of important reports 24 00:01:22,319 --> 00:01:25,600 Speaker 1: on the future of work and the global economy post COVID. 25 00:01:26,319 --> 00:01:29,640 Speaker 1: We'll also here why the Irish government is so keen 26 00:01:29,680 --> 00:01:31,520 Speaker 1: to keep people from going back to work in their 27 00:01:31,560 --> 00:01:34,320 Speaker 1: city offices. They're even going to encourage them to work 28 00:01:34,480 --> 00:01:38,360 Speaker 1: in their local pub. But first, here's our Spanish economy 29 00:01:38,400 --> 00:01:42,080 Speaker 1: reporter Jeanette Newman in Madrid and a quiet corner of 30 00:01:42,120 --> 00:01:56,560 Speaker 1: northeast Spain. I'm walking through some outeror dining spats in 31 00:01:56,560 --> 00:01:59,320 Speaker 1: the west. That's neighborhood in the center of Madrid. This 32 00:01:59,320 --> 00:02:03,320 Speaker 1: neighborhood history centuries ago. The author of Don Quixote and 33 00:02:03,360 --> 00:02:06,600 Speaker 1: other legendary writers lived here and as beautiful plus as 34 00:02:06,600 --> 00:02:09,960 Speaker 1: with fountains and great tapas bars, many of which are open. 35 00:02:11,040 --> 00:02:14,560 Speaker 1: Despite these charms, apparently not many people want to live here. 36 00:02:15,120 --> 00:02:17,560 Speaker 1: To my left, there's an apartment for rent. To my 37 00:02:17,639 --> 00:02:20,960 Speaker 1: right another there are several dozen apartments for rent just 38 00:02:21,040 --> 00:02:28,799 Speaker 1: a few minutes from where I'm walking. So many empty 39 00:02:28,800 --> 00:02:32,440 Speaker 1: apartments is pushing down rental prices. They fell around ten 40 00:02:32,480 --> 00:02:34,880 Speaker 1: percent at the beginning of this year in Madrid compared 41 00:02:34,919 --> 00:02:38,200 Speaker 1: to last in major cities around the world. The story 42 00:02:38,320 --> 00:02:41,920 Speaker 1: is the same. In some central parts of Sydney, London, 43 00:02:42,160 --> 00:02:46,040 Speaker 1: New York, and Chicago, prices are falling. The decline shows 44 00:02:46,080 --> 00:02:49,040 Speaker 1: one way the pandemic has changed US. Urban centers have 45 00:02:49,160 --> 00:02:52,640 Speaker 1: become less appealing. Let's push some city dwellers to move out. 46 00:02:53,120 --> 00:02:55,399 Speaker 1: At the same time, it's slow the number of people 47 00:02:55,400 --> 00:02:58,760 Speaker 1: who would normally move in. This ditching and dodging has 48 00:02:58,840 --> 00:03:03,280 Speaker 1: major implications for rental prices, inflation, the cost of housing, 49 00:03:03,600 --> 00:03:06,959 Speaker 1: and inequality. Let's go to the tiny town of Oust 50 00:03:07,320 --> 00:03:10,560 Speaker 1: in northeast Spain. I traveled there to speak with recent 51 00:03:10,600 --> 00:03:13,600 Speaker 1: city transplants about their new rural life and their post 52 00:03:13,600 --> 00:03:16,560 Speaker 1: pandemic plans. I wanted to find out how permanent this 53 00:03:16,600 --> 00:03:21,839 Speaker 1: global shift away from cities might be. A century ago, 54 00:03:22,200 --> 00:03:26,000 Speaker 1: nearly fred people lived the new said, now they're two hundred. 55 00:03:26,720 --> 00:03:29,120 Speaker 1: The town is located in an area of Spain that 56 00:03:29,200 --> 00:03:32,600 Speaker 1: has an average of around seven inhabitants per square kilometer. 57 00:03:33,080 --> 00:03:35,600 Speaker 1: There are few other places in Europe that are so 58 00:03:35,640 --> 00:03:40,240 Speaker 1: sparsely populated, except the Scottish Highlands and Lapland. That's right, 59 00:03:40,680 --> 00:03:45,120 Speaker 1: villains Subarctic wilderness for decades. Then, who said has been 60 00:03:45,160 --> 00:03:48,320 Speaker 1: a place where people generally didn't want to live. The 61 00:03:48,360 --> 00:03:52,040 Speaker 1: pandemic has changed that. New residents like Lowi Garcia are 62 00:03:52,080 --> 00:03:54,760 Speaker 1: moving in. I have a friend who laughed so much 63 00:03:54,800 --> 00:03:58,040 Speaker 1: when he said, but where did you go to? Middle 64 00:03:58,080 --> 00:04:03,320 Speaker 1: of nowhere in And I said, Luke, half a little 65 00:04:03,520 --> 00:04:07,120 Speaker 1: shop store where I can buy my groceries. I have 66 00:04:07,280 --> 00:04:10,560 Speaker 1: this little bank that it already stole my car. When 67 00:04:10,560 --> 00:04:15,080 Speaker 1: I went to take somebody out. Half a church and 68 00:04:15,120 --> 00:04:18,560 Speaker 1: they have a pharmacy and there are two bars. And 69 00:04:18,600 --> 00:04:21,000 Speaker 1: then he said, why do you have a pharmacy. Why 70 00:04:21,000 --> 00:04:23,040 Speaker 1: do you need a pharmacy if you have two bars. 71 00:04:23,839 --> 00:04:26,680 Speaker 1: Lowly is thirty nine years old. She works in education 72 00:04:26,880 --> 00:04:30,000 Speaker 1: and is studying to become a kindergarten teacher. In September, 73 00:04:30,320 --> 00:04:32,680 Speaker 1: she left her rental apartment in Madrid and moved to 74 00:04:32,839 --> 00:04:35,560 Speaker 1: said with her kids. She wanted space and to be 75 00:04:35,600 --> 00:04:39,120 Speaker 1: near nature and family. Lowly has deep ties too, said 76 00:04:39,640 --> 00:04:41,599 Speaker 1: she spent much of the pandemic in the home that 77 00:04:41,680 --> 00:04:45,640 Speaker 1: belonged to her great grandmother. Lowly enrolled her two boys 78 00:04:45,640 --> 00:04:48,480 Speaker 1: in the town school, boosting the total number of pupils 79 00:04:48,480 --> 00:04:51,560 Speaker 1: to nine. For small towns, like you said, a local 80 00:04:51,560 --> 00:04:55,640 Speaker 1: school is an existential bell Weather when we came like people. 81 00:04:55,920 --> 00:04:58,680 Speaker 1: You can feel that people only love me because I 82 00:04:58,760 --> 00:05:02,599 Speaker 1: have two kids. And a town official called Lowly because 83 00:05:02,600 --> 00:05:04,600 Speaker 1: she didn enrolled two kids in school. She had the 84 00:05:04,680 --> 00:05:07,920 Speaker 1: right to two plots of municipal farmland, hold over from 85 00:05:07,960 --> 00:05:11,400 Speaker 1: an earlier era when the town administered common lands for villagers. 86 00:05:12,000 --> 00:05:14,479 Speaker 1: She didn't want the farmland, but she says the town 87 00:05:14,520 --> 00:05:17,760 Speaker 1: has given her something less tangible and more profound. And 88 00:05:17,839 --> 00:05:21,080 Speaker 1: the thing that I like very much of said is 89 00:05:21,120 --> 00:05:26,279 Speaker 1: the fact of nature and freedom is the fact of time. 90 00:05:26,720 --> 00:05:31,320 Speaker 1: It seems like you have time again to leave something 91 00:05:31,400 --> 00:05:34,680 Speaker 1: that in the cities, no matter how much you try 92 00:05:34,760 --> 00:05:38,800 Speaker 1: to have time, sometimes you always feel running after it. 93 00:05:39,200 --> 00:05:42,800 Speaker 1: I don't know yet if I I'm going to be 94 00:05:42,839 --> 00:05:47,039 Speaker 1: a rural woman for the rest of my life, but 95 00:05:47,240 --> 00:05:50,400 Speaker 1: maybe for two or three more years. It's a fact. 96 00:06:01,440 --> 00:06:04,320 Speaker 1: If Lowly and others stay, it would slow the exodus 97 00:06:04,360 --> 00:06:08,600 Speaker 1: that Alberto Sanchez has seemed diminished his hometown. Alberto is 98 00:06:08,680 --> 00:06:12,120 Speaker 1: thirty three years old and an historic preservation architect. He 99 00:06:12,240 --> 00:06:16,680 Speaker 1: counts the cost of depopulation and who SAIDs abandoned buildings. 100 00:06:16,720 --> 00:06:19,800 Speaker 1: Alberto bought one several years ago. He was supposed to 101 00:06:19,880 --> 00:06:24,240 Speaker 1: spend part of Madrid doing research for his dissertation. Instead, 102 00:06:24,480 --> 00:06:27,080 Speaker 1: he spent much of the pandemic restoring the property. I 103 00:06:27,120 --> 00:06:30,880 Speaker 1: think that this project comes out of both my brain 104 00:06:30,920 --> 00:06:35,360 Speaker 1: gain in a depopulating town, seeing the population firsthand as 105 00:06:35,360 --> 00:06:39,800 Speaker 1: a kid. Even during my lifetime, my town loves about 106 00:06:39,839 --> 00:06:42,919 Speaker 1: half of its population. When I was a kid, we 107 00:06:43,040 --> 00:06:45,719 Speaker 1: had around four hundred people, and now we have around 108 00:06:45,720 --> 00:06:49,440 Speaker 1: two hundred. He shows me around his property, a seventeenth 109 00:06:49,440 --> 00:06:52,520 Speaker 1: century manor house. There's a coat of arms on the facade, 110 00:06:52,800 --> 00:06:56,000 Speaker 1: basking in the sharp Spanish sunlight. The house is regal, 111 00:06:56,160 --> 00:06:59,360 Speaker 1: despite the collapsed ceilings and piles of rubble. I thought 112 00:06:59,440 --> 00:07:02,680 Speaker 1: that I needed to sur buy it in order to 113 00:07:02,720 --> 00:07:06,160 Speaker 1: save it from other destinies that will have awaited her, 114 00:07:06,200 --> 00:07:09,440 Speaker 1: including the militian, which was perhaps the most likely one. 115 00:07:09,840 --> 00:07:12,000 Speaker 1: Alberto bought the house from a family who lived here 116 00:07:12,080 --> 00:07:16,200 Speaker 1: until nineteen at the time tens of thousands of Spaniards 117 00:07:16,240 --> 00:07:19,000 Speaker 1: were to camping to cities in search of better opportunities. 118 00:07:19,680 --> 00:07:22,600 Speaker 1: The house is as the family left. It dishes in 119 00:07:22,600 --> 00:07:25,559 Speaker 1: the pantry, covered in a thick layer of dust, old 120 00:07:25,600 --> 00:07:28,760 Speaker 1: paintings in the attic. Alberto says the family planned to 121 00:07:28,840 --> 00:07:32,200 Speaker 1: return but never did. And look at all the pots 122 00:07:32,240 --> 00:07:37,320 Speaker 1: hanging there. It's beautiful. But again it's like they left 123 00:07:37,400 --> 00:07:39,880 Speaker 1: and then we'll come back, we'll come back, and then 124 00:07:39,920 --> 00:07:44,120 Speaker 1: they never came, and they never came back. For Alberto, 125 00:07:44,560 --> 00:07:47,080 Speaker 1: the house is a time capsule. It tells a story 126 00:07:47,080 --> 00:07:51,600 Speaker 1: about who said and rural life in Spain. Despite the challenges, 127 00:07:51,840 --> 00:07:55,120 Speaker 1: Alberto has become more optimistic about that story during the pandemic. 128 00:07:55,640 --> 00:07:59,040 Speaker 1: What I know is that four houses were built last year, 129 00:07:59,120 --> 00:08:01,360 Speaker 1: and the top four your houses, which is a lot 130 00:08:01,440 --> 00:08:05,640 Speaker 1: for a town this size, and many people are realizing 131 00:08:05,640 --> 00:08:08,160 Speaker 1: that it's much cheaper to live in a town like 132 00:08:08,200 --> 00:08:11,280 Speaker 1: this than to live in a city, especially in large 133 00:08:11,280 --> 00:08:15,160 Speaker 1: capitals like Madrid and Barcelona, where housing is becoming and 134 00:08:15,240 --> 00:08:19,720 Speaker 1: possibly expensive. Some people, though, are worried the charms of 135 00:08:19,760 --> 00:08:22,720 Speaker 1: small town living will wear off once the pandemic fades. 136 00:08:23,040 --> 00:08:26,440 Speaker 1: I traveled deeper into what's known as Las Spanavacia, Empty 137 00:08:26,440 --> 00:08:29,720 Speaker 1: Spain to hear about the challenges in the town of Ourea. 138 00:08:29,920 --> 00:08:32,720 Speaker 1: I spoke to Manuel Marco. He's fifty one years old. 139 00:08:32,920 --> 00:08:34,640 Speaker 1: He and his wife moved to this town of around 140 00:08:34,679 --> 00:08:38,840 Speaker 1: two hundred people just before COVID nineteen hit. During the pandemic. 141 00:08:38,960 --> 00:08:40,800 Speaker 1: He's been happy to see more than a dozen new 142 00:08:40,840 --> 00:08:43,959 Speaker 1: residents come to Aurea, but he's worried they won't stay 143 00:08:44,160 --> 00:08:46,680 Speaker 1: and that others will continue to stay away. The reason 144 00:08:47,000 --> 00:08:50,880 Speaker 1: slow internet. The Spanish government has pledged to spend billions 145 00:08:50,880 --> 00:08:54,240 Speaker 1: of euros and EU pandemic recovery funds to ensure fast 146 00:08:54,240 --> 00:08:57,840 Speaker 1: internet for all, but Manuel doesn't want to wait, so 147 00:08:57,880 --> 00:09:00,280 Speaker 1: he's hatched a plan to tap the fiber optic tables 148 00:09:00,320 --> 00:09:03,040 Speaker 1: have a nearby power plant and extend them to Area 149 00:09:03,280 --> 00:09:06,240 Speaker 1: and several other small towns. He walks me down to 150 00:09:06,240 --> 00:09:08,800 Speaker 1: Area's main street and shows me where he would install 151 00:09:08,840 --> 00:09:14,680 Speaker 1: the cables from that entrance to the town over there, 152 00:09:14,920 --> 00:09:18,880 Speaker 1: all along this road, straight down to the end. Didn't 153 00:09:20,160 --> 00:09:23,200 Speaker 1: My decision to try to install telecommunications in these towns 154 00:09:23,679 --> 00:09:27,000 Speaker 1: is about my intention to help these towns repopulate, so 155 00:09:27,080 --> 00:09:30,320 Speaker 1: people can invest, so people can work, and so that 156 00:09:30,360 --> 00:09:36,280 Speaker 1: the young people don't leave in these towns, don't die out. Okay, 157 00:09:40,360 --> 00:09:42,800 Speaker 1: what does all this mean for the economy? I spoke 158 00:09:42,840 --> 00:09:46,280 Speaker 1: to HSBC Global economist James Pomeroy. So you've ended up 159 00:09:46,280 --> 00:09:48,880 Speaker 1: getting is a big dropping rental demand and a big 160 00:09:48,960 --> 00:09:51,560 Speaker 1: dropping rental prices. And big cities, And you're seeing this 161 00:09:51,840 --> 00:09:53,839 Speaker 1: in pretty much everywhere we can get data BID in 162 00:09:53,880 --> 00:09:56,480 Speaker 1: the US, BID and Europe, BIT and Asia, my rental 163 00:09:56,520 --> 00:09:59,240 Speaker 1: prices and big cities of Plumberton, and that really matters 164 00:09:59,280 --> 00:10:02,680 Speaker 1: for inflation, particularly in the US when rents make up 165 00:10:02,720 --> 00:10:06,160 Speaker 1: about a third of the inflation basket. Cheaper apartments are 166 00:10:06,200 --> 00:10:09,160 Speaker 1: good news for young renters in big cities, but James 167 00:10:09,160 --> 00:10:11,920 Speaker 1: points out there's a flip side. The problem you've got 168 00:10:11,920 --> 00:10:13,920 Speaker 1: if you're one of those young people is, at the 169 00:10:13,960 --> 00:10:17,199 Speaker 1: same time as this rental dynamic is happening, house prices 170 00:10:17,200 --> 00:10:20,240 Speaker 1: are going through the roof because you've got this weird 171 00:10:20,360 --> 00:10:23,400 Speaker 1: environment where all the people who are geographically mobile, who 172 00:10:23,400 --> 00:10:25,800 Speaker 1: have kept their jobs during the pandemic because of being 173 00:10:25,800 --> 00:10:28,160 Speaker 1: able to remote work, have saved a load of money. 174 00:10:28,240 --> 00:10:31,000 Speaker 1: And I've got almost zero interest rates or historically low 175 00:10:31,040 --> 00:10:33,040 Speaker 1: interest rates. And what's that. What that's meant is that 176 00:10:33,120 --> 00:10:36,600 Speaker 1: house prices pretty much everywhere in the world I saw 177 00:10:37,240 --> 00:10:42,000 Speaker 1: the pandemic in that sense has exacerbated income inequality because 178 00:10:42,000 --> 00:10:44,800 Speaker 1: you're taking that home ownership even further out of reach 179 00:10:45,200 --> 00:10:47,640 Speaker 1: of a younger generation who already was going to struggle 180 00:10:47,679 --> 00:10:51,440 Speaker 1: to become home That's why some young people have seized 181 00:10:51,440 --> 00:10:53,959 Speaker 1: on the pandemic to seek out places where home prices 182 00:10:54,000 --> 00:10:57,079 Speaker 1: haven't gone up. People like Manuel are trying to invest 183 00:10:57,120 --> 00:11:02,720 Speaker 1: in infrastructure to make sure they stay. I think about 184 00:11:02,720 --> 00:11:05,360 Speaker 1: the people who left you Said and other small Spanish 185 00:11:05,360 --> 00:11:09,040 Speaker 1: towns decades ago, streaming into cities like Madrid and Barcelona. 186 00:11:10,000 --> 00:11:13,320 Speaker 1: Their exodus helped to concentrate economic and political power in 187 00:11:13,440 --> 00:11:17,079 Speaker 1: urban areas. It drained many parts of the Spanish countryside 188 00:11:17,200 --> 00:11:20,559 Speaker 1: of fatality. Many of those who left you Said decades 189 00:11:20,559 --> 00:11:23,320 Speaker 1: ago thought they would eventually return to small town life, 190 00:11:23,960 --> 00:11:27,520 Speaker 1: and they never did. Maybe this time some of those 191 00:11:27,559 --> 00:11:29,720 Speaker 1: who have left the city to live in the country 192 00:11:30,160 --> 00:11:33,319 Speaker 1: will be the ones who never go back. Jeanette Newman, 193 00:11:33,440 --> 00:11:44,800 Speaker 1: Bloomberg News Now. One of the questions raised by Jeanette's 194 00:11:44,800 --> 00:11:48,120 Speaker 1: pieces should governments be doing anything differently as a result 195 00:11:48,160 --> 00:11:50,720 Speaker 1: of these changes in behavior? And it turns out the 196 00:11:50,720 --> 00:11:54,520 Speaker 1: Irish government thinks they should not only be adapting their policies, 197 00:11:54,559 --> 00:11:58,880 Speaker 1: but actively encouraging these developments as part of their strategy 198 00:11:58,960 --> 00:12:03,079 Speaker 1: to boost rural areas. Dara Doyle is Bloomberg's bureau chief 199 00:12:03,120 --> 00:12:05,760 Speaker 1: in Dublin. Dara, when I Readinette script. I sort of 200 00:12:05,800 --> 00:12:09,400 Speaker 1: dimly remembered I'd read something about Ireland wanting to do this, 201 00:12:09,440 --> 00:12:13,920 Speaker 1: but what exactly is the strategy. Yeah, so back in 202 00:12:13,960 --> 00:12:16,600 Speaker 1: the spring the government launched this new sort of world 203 00:12:16,640 --> 00:12:19,760 Speaker 1: development strategy that one involved and encourage people to, you know, 204 00:12:19,800 --> 00:12:21,839 Speaker 1: continue to work from home where many people have moved 205 00:12:21,880 --> 00:12:23,520 Speaker 1: back and moved out of Dublin over to the west 206 00:12:23,520 --> 00:12:25,640 Speaker 1: of Ireland, the Midlands, that kind of place. So it's 207 00:12:25,640 --> 00:12:28,120 Speaker 1: an idea where you can kind of keep people in 208 00:12:28,160 --> 00:12:29,680 Speaker 1: those areas. And how are they going to do it? 209 00:12:29,800 --> 00:12:31,640 Speaker 1: A number of ways. There's a couple of kind of 210 00:12:31,720 --> 00:12:34,920 Speaker 1: key points that they've talked about. So one thing, for example, 211 00:12:35,040 --> 00:12:38,000 Speaker 1: is they want to develop a whole network of remote 212 00:12:38,040 --> 00:12:40,640 Speaker 1: working homes. I guess the country you know we work 213 00:12:40,720 --> 00:12:43,840 Speaker 1: scenario possibly if you can imagine that pubs. I thought 214 00:12:43,840 --> 00:12:46,920 Speaker 1: that was going to be in old pubs. Yeah, pubs 215 00:12:46,920 --> 00:12:49,600 Speaker 1: have been mentioned. Will say, if you have ever been 216 00:12:49,600 --> 00:12:52,320 Speaker 1: in a Dublin pub or an Irish pub at Leven 217 00:12:52,360 --> 00:12:54,240 Speaker 1: Name in the morning, I'm not particularly sure it's the 218 00:12:54,400 --> 00:12:57,679 Speaker 1: nicest environment to work. In my own experience, it's not 219 00:12:57,720 --> 00:12:59,320 Speaker 1: somewhere I want to be at Leven Name the morning 220 00:12:59,360 --> 00:13:05,000 Speaker 1: after a busy Thursday night in Limerick or something. So yeah, 221 00:13:05,400 --> 00:13:08,240 Speaker 1: so absolutely and these remote hopes including possibly pubs and 222 00:13:08,360 --> 00:13:12,080 Speaker 1: one idea another idea is you know, possibly tax breaks 223 00:13:12,080 --> 00:13:15,680 Speaker 1: to keep people, you know, in a rural environment, although 224 00:13:15,720 --> 00:13:18,920 Speaker 1: again I don't think very significant. Look, it's hard to 225 00:13:18,920 --> 00:13:21,080 Speaker 1: know how significant things are going to be. I mean, 226 00:13:21,080 --> 00:13:23,800 Speaker 1: I thought it was ironic that the tarnished our Deputy 227 00:13:23,800 --> 00:13:26,640 Speaker 1: Prime Minister Leo Rodker when the when the announcing part 228 00:13:26,640 --> 00:13:29,160 Speaker 1: of the strategy actually called us to a press conference 229 00:13:29,960 --> 00:13:33,280 Speaker 1: rather than do Rather than do the launch over Zoom 230 00:13:33,520 --> 00:13:35,400 Speaker 1: did a press conference in Duldt, which I thought was 231 00:13:35,440 --> 00:13:37,200 Speaker 1: kind of ironically. We couldn't work from home while he 232 00:13:37,240 --> 00:13:39,960 Speaker 1: was launching the strategy. So none of the measures have 233 00:13:40,040 --> 00:13:43,200 Speaker 1: been costed. They're all very aspirational and it's you know, 234 00:13:43,320 --> 00:13:45,160 Speaker 1: it's it's a nice idea, but I think we're gonna 235 00:13:45,160 --> 00:13:46,840 Speaker 1: have to wait and see about how effective they're going 236 00:13:46,840 --> 00:13:50,000 Speaker 1: to be. I mean, it's quite interesting for people listening 237 00:13:50,040 --> 00:13:52,199 Speaker 1: from elsewhere in the world because we've tended to think 238 00:13:52,240 --> 00:13:55,920 Speaker 1: that governments will be broadly encouraging people back to work 239 00:13:56,000 --> 00:13:59,679 Speaker 1: because they're so worried about those jobs and businesses and 240 00:14:00,000 --> 00:14:02,959 Speaker 1: city centers that we rely on so much. So, so 241 00:14:03,040 --> 00:14:05,920 Speaker 1: why is it that the Ireland is not worried about 242 00:14:05,960 --> 00:14:08,480 Speaker 1: that so much? So? I think there's one key factor. 243 00:14:08,600 --> 00:14:11,679 Speaker 1: I mean, possibly more than any other country Europe, Ireland 244 00:14:11,720 --> 00:14:15,880 Speaker 1: is incredibly lobside around. Population is crammed into Dublin and 245 00:14:16,000 --> 00:14:20,000 Speaker 1: pushing property prices incredibly high. Such a small, you know, 246 00:14:20,440 --> 00:14:22,880 Speaker 1: European city person on the edge of Europe, you'd expect 247 00:14:22,920 --> 00:14:25,440 Speaker 1: housing prices to be kind of reasonable. That's not the case. 248 00:14:25,440 --> 00:14:27,600 Speaker 1: You could pay at six seven eight hundred thousand to 249 00:14:27,600 --> 00:14:29,840 Speaker 1: buy a nice vombily home in Dublin. And that's partly 250 00:14:29,840 --> 00:14:32,680 Speaker 1: because some of the pressure that's the population prepert that 251 00:14:32,680 --> 00:14:36,040 Speaker 1: that's in Dublin, and at the same place to infrastructure, 252 00:14:36,080 --> 00:14:40,320 Speaker 1: our transport systems are crammed up. Buses are full at 253 00:14:40,360 --> 00:14:42,880 Speaker 1: all points. So in a way it's an opportunity to 254 00:14:42,880 --> 00:14:45,600 Speaker 1: to kind of move people away out of Dublin and 255 00:14:45,600 --> 00:14:48,160 Speaker 1: releasing pressure on the capital city, which is under tremendous 256 00:14:48,280 --> 00:14:51,920 Speaker 1: kind of yeah pressure, But I guess that I mean 257 00:14:52,000 --> 00:14:55,720 Speaker 1: that pressure is partly as a result of Ireland's great 258 00:14:55,800 --> 00:15:03,280 Speaker 1: success in recent years at attracting big international companies to Dublin, 259 00:15:03,600 --> 00:15:07,840 Speaker 1: and maybe a few more financial sector jobs, recently jobs 260 00:15:07,880 --> 00:15:10,360 Speaker 1: moving from London as a result of as a result 261 00:15:10,440 --> 00:15:12,920 Speaker 1: of Brexit. But we've had so much talk on this 262 00:15:12,960 --> 00:15:18,080 Speaker 1: podcast and elsewhere about cracking down on the sort of 263 00:15:18,160 --> 00:15:21,640 Speaker 1: race to the bottom mentality on corporate taxation, and Island 264 00:15:21,640 --> 00:15:26,880 Speaker 1: has built its development strategy on having the lowest tax rate, 265 00:15:27,360 --> 00:15:31,240 Speaker 1: attracting those big companies partly on that basis. Do you 266 00:15:31,240 --> 00:15:36,120 Speaker 1: think the government's also worried about that model long term? 267 00:15:36,160 --> 00:15:37,880 Speaker 1: I mean, you know, first of all, I'm not sure 268 00:15:37,920 --> 00:15:39,840 Speaker 1: I agree with the race of the bottom strategy. Yeah, 269 00:15:39,840 --> 00:15:43,680 Speaker 1: definitely that you do such a term in that kind 270 00:15:43,720 --> 00:15:46,720 Speaker 1: of context. And look, I think there are concerns around 271 00:15:46,720 --> 00:15:48,600 Speaker 1: the model, but these aren't really to do the pandemic 272 00:15:48,640 --> 00:15:50,640 Speaker 1: there to do with the changes coming internet in the 273 00:15:50,680 --> 00:15:54,160 Speaker 1: international tax system. You know, I've been reporting on taxes 274 00:15:54,200 --> 00:15:56,840 Speaker 1: for maybe fifteen twenty years, and this is probably the 275 00:15:56,960 --> 00:16:00,240 Speaker 1: point where I see government most worried. That they're twelve 276 00:16:00,240 --> 00:16:03,520 Speaker 1: point five percent rate is understraates, under pressure. And look, 277 00:16:03,640 --> 00:16:05,680 Speaker 1: the argument cover from the Irish government is that, you know, 278 00:16:05,680 --> 00:16:08,640 Speaker 1: there are other factors that attract companies to Ireland. If 279 00:16:08,680 --> 00:16:11,240 Speaker 1: the fact that it's a relatively well well educated workforce 280 00:16:11,240 --> 00:16:14,520 Speaker 1: it's a relative cheap workforce. We offer you know, access 281 00:16:14,560 --> 00:16:16,920 Speaker 1: to the you know, easy access to the European market. 282 00:16:17,000 --> 00:16:19,400 Speaker 1: So without sounding like a shill for the Irish government, 283 00:16:19,400 --> 00:16:21,520 Speaker 1: they would argue that there are you know, other vantages 284 00:16:21,720 --> 00:16:25,640 Speaker 1: above and beyond tax. But there's no doubt that that 285 00:16:26,000 --> 00:16:27,800 Speaker 1: they are concerned that the model, which is you know, 286 00:16:27,800 --> 00:16:31,760 Speaker 1: it's incredibly important, as you said, as I'm saying very 287 00:16:31,920 --> 00:16:34,840 Speaker 1: on about one of five Irish workers are employed directly 288 00:16:34,920 --> 00:16:37,120 Speaker 1: indirectly by US firmaments that are base here. So it's 289 00:16:37,160 --> 00:16:39,080 Speaker 1: a huge it's a huge factor. But I think that 290 00:16:39,400 --> 00:16:45,560 Speaker 1: including you, not that we'd ever say that was a motivation. No, 291 00:16:46,000 --> 00:16:50,080 Speaker 1: no clear clear clearing off. But but so but I think, 292 00:16:50,160 --> 00:16:51,520 Speaker 1: you know, it kind of goes back to which because 293 00:16:51,520 --> 00:16:54,640 Speaker 1: about this will distract remote strategy working. To me, ultimately, 294 00:16:54,920 --> 00:16:56,600 Speaker 1: there is a desire among a lot of workers to 295 00:16:56,680 --> 00:16:58,480 Speaker 1: move out of Dubland to be based where they're from 296 00:16:58,560 --> 00:16:59,960 Speaker 1: and you live in a nice part of the country 297 00:17:00,040 --> 00:17:02,000 Speaker 1: up in the west of our and whatever. But it'll 298 00:17:02,040 --> 00:17:04,480 Speaker 1: come down to what employers are prepared to kind of accept, like, 299 00:17:04,880 --> 00:17:07,639 Speaker 1: you know, will Google be happy with its staff to 300 00:17:08,080 --> 00:17:11,040 Speaker 1: be three miles away? You know, we'll Facebook be happy 301 00:17:11,119 --> 00:17:13,040 Speaker 1: with somebody to be, you know, down in Cork or 302 00:17:13,359 --> 00:17:14,920 Speaker 1: you know, do people have to be in the office 303 00:17:14,960 --> 00:17:18,240 Speaker 1: to to to to attend meetings as we returned to 304 00:17:18,240 --> 00:17:20,840 Speaker 1: normality over the next year or so. So ultimately, I 305 00:17:20,920 --> 00:17:23,440 Speaker 1: think that just going back to your original questions, the 306 00:17:23,520 --> 00:17:25,879 Speaker 1: successor or otherwise the strategy with large depend on what 307 00:17:25,960 --> 00:17:28,199 Speaker 1: those kind of companies decide what the model is kind 308 00:17:28,200 --> 00:17:29,760 Speaker 1: of going forward. And I know we see lots of 309 00:17:30,320 --> 00:17:32,960 Speaker 1: commentary now about like hybrid working and it's all going 310 00:17:33,000 --> 00:17:34,800 Speaker 1: to change, always be very different. I kind of wonder 311 00:17:34,880 --> 00:17:37,960 Speaker 1: sometimes two years time this is all very different, is it. 312 00:17:38,200 --> 00:17:39,840 Speaker 1: Are we all going to be in a different situation 313 00:17:39,920 --> 00:17:41,360 Speaker 1: that you know, are we all going to be kind 314 00:17:41,359 --> 00:17:43,480 Speaker 1: of working a half time from from home? I'm not sure. 315 00:17:43,720 --> 00:17:46,200 Speaker 1: I guess. Well, I have you sitting in Dublin and 316 00:17:46,240 --> 00:17:47,760 Speaker 1: I can see there aren't very many people in the 317 00:17:47,800 --> 00:17:50,880 Speaker 1: office with you right now. I should I should ask 318 00:17:50,920 --> 00:17:53,240 Speaker 1: you how Aland's doing in the recovery. I mean, we've 319 00:17:53,240 --> 00:17:56,600 Speaker 1: got quite a a big gap opening up between the 320 00:17:56,800 --> 00:18:00,879 Speaker 1: UK and the US on the one hand, and continental 321 00:18:01,000 --> 00:18:04,520 Speaker 1: Europe in the pace of recovery right now, and that's 322 00:18:04,680 --> 00:18:08,000 Speaker 1: very slow pace of the rollout of vaccines and where 323 00:18:08,040 --> 00:18:10,960 Speaker 1: does alim fit into that? So as everyone are and 324 00:18:11,000 --> 00:18:13,000 Speaker 1: it's a it's a fairly complicated picture because we have 325 00:18:13,119 --> 00:18:17,000 Speaker 1: these huge multinationals, your Googles, your facebooks, your big farmer companies. 326 00:18:17,200 --> 00:18:19,119 Speaker 1: The headline numbers that aren't look really good. If I 327 00:18:19,160 --> 00:18:20,600 Speaker 1: can think, really the only country in that you to 328 00:18:20,760 --> 00:18:23,200 Speaker 1: actually grow last year because we had these like massive 329 00:18:23,240 --> 00:18:26,520 Speaker 1: export figures. But of course that doesn't always translate into jobs. 330 00:18:26,560 --> 00:18:28,159 Speaker 1: So at the same time we have that, we have 331 00:18:28,760 --> 00:18:33,680 Speaker 1: unemployment because retail, bars, restaurants were closed down and that's 332 00:18:33,760 --> 00:18:36,000 Speaker 1: continue to be the situation into the first quarter, in 333 00:18:36,040 --> 00:18:38,919 Speaker 1: the first half of this year, and we're under very 334 00:18:38,960 --> 00:18:42,679 Speaker 1: hard lockdown. Still bars, restaurant, non essential stores, bookshops, et 335 00:18:42,720 --> 00:18:46,320 Speaker 1: cetera also closed right now there's no sign and when 336 00:18:46,320 --> 00:18:49,320 Speaker 1: they're going to reopen. So I think it's people are 337 00:18:49,359 --> 00:18:52,760 Speaker 1: still out of work and so so things at the 338 00:18:52,840 --> 00:18:55,960 Speaker 1: moment are tough for people. I will say I would 339 00:18:55,960 --> 00:18:59,159 Speaker 1: expect a massive rebound in the second half of this 340 00:18:59,359 --> 00:19:01,760 Speaker 1: year because like the u k els where people have 341 00:19:02,480 --> 00:19:04,080 Speaker 1: if you if you've been looking at to keep your job, 342 00:19:04,320 --> 00:19:06,040 Speaker 1: you've a math a law savings, there's going to be 343 00:19:06,040 --> 00:19:07,800 Speaker 1: a massive consumer being I think the second half of 344 00:19:07,800 --> 00:19:09,920 Speaker 1: the year, and that will be married with the continued 345 00:19:09,920 --> 00:19:12,000 Speaker 1: success of your of your of your export sector, your 346 00:19:12,000 --> 00:19:14,639 Speaker 1: facebooks or Google's your farmer companies. So I said, so 347 00:19:14,800 --> 00:19:17,440 Speaker 1: things aren't great right now, but I suspect the second 348 00:19:17,440 --> 00:19:20,160 Speaker 1: half of the year I think was the bars, restaurants, 349 00:19:20,240 --> 00:19:23,400 Speaker 1: non as you stories reopened maybe June early July. People 350 00:19:23,400 --> 00:19:24,760 Speaker 1: will be gone on holidays again. I think we'll have 351 00:19:24,800 --> 00:19:26,320 Speaker 1: a very big rebound in the second half of the 352 00:19:26,680 --> 00:19:29,640 Speaker 1: this year. It will be my sense, Dara Doyle, thanks 353 00:19:29,760 --> 00:19:41,360 Speaker 1: very much, Thank you, Stephanie m So We've now had 354 00:19:41,440 --> 00:19:45,080 Speaker 1: two on the ground perspectives from Spain and Ireland on 355 00:19:45,400 --> 00:19:49,480 Speaker 1: people working differently, maybe the other side of this pandemic, 356 00:19:49,840 --> 00:19:53,920 Speaker 1: and maybe government's planning differently in response. So I thought 357 00:19:53,960 --> 00:19:56,840 Speaker 1: we should get an expert take on these issues and 358 00:19:57,040 --> 00:19:59,879 Speaker 1: pull some of the strands together by talking to Spend. 359 00:20:00,040 --> 00:20:02,440 Speaker 1: Smith was one of the co chairs of the McKinsey 360 00:20:02,440 --> 00:20:06,680 Speaker 1: Global Institute and a co author of three important reports 361 00:20:06,800 --> 00:20:09,800 Speaker 1: which the Institute has put out recently on the world 362 00:20:09,960 --> 00:20:14,680 Speaker 1: after COVID nineteen. Spend thanks very much for coming on Stephanomics. 363 00:20:15,320 --> 00:20:18,040 Speaker 1: I mean those reports they tackle not just the changing 364 00:20:18,119 --> 00:20:22,040 Speaker 1: world of work, but also changing consumer behavior and indeed 365 00:20:22,240 --> 00:20:26,560 Speaker 1: whether we're going to see more innovation and growth coming 366 00:20:26,600 --> 00:20:29,640 Speaker 1: out of this crisis. But let's focus just for now 367 00:20:29,920 --> 00:20:33,760 Speaker 1: on the changing world of work. Peace Ash. You start, 368 00:20:33,800 --> 00:20:37,080 Speaker 1: I guess by asking, does your research support the idea 369 00:20:37,200 --> 00:20:40,080 Speaker 1: that the work is going to be more widely distributed 370 00:20:40,200 --> 00:20:43,480 Speaker 1: in a geographical sense, less concentrated in cities as a 371 00:20:43,520 --> 00:20:48,159 Speaker 1: result of the pandemic. So Stephanie, thanks for having me. 372 00:20:49,280 --> 00:20:52,159 Speaker 1: I think it does support that. You know, the future 373 00:20:52,160 --> 00:20:54,840 Speaker 1: of work has been a conversation that was already their 374 00:20:54,920 --> 00:20:58,080 Speaker 1: pre COVID, and it used to say that fifty of 375 00:20:58,280 --> 00:21:01,639 Speaker 1: tasks could be automated with a lable technology. But the 376 00:21:01,680 --> 00:21:04,720 Speaker 1: good news was that there would be equal amount of 377 00:21:04,840 --> 00:21:07,960 Speaker 1: jobs gained that's lost roughly even it was so that 378 00:21:08,080 --> 00:21:10,600 Speaker 1: the net gain was actually slightly positive, so the future 379 00:21:10,640 --> 00:21:14,000 Speaker 1: work was actually nicely imbalanced. If you look at the 380 00:21:14,040 --> 00:21:17,880 Speaker 1: shifts that are now happening, which is remote work, which 381 00:21:18,000 --> 00:21:21,720 Speaker 1: is e commerce, which is automation, they are accelerating the 382 00:21:21,800 --> 00:21:27,119 Speaker 1: pre COVID trends, and with that they also shift I 383 00:21:27,240 --> 00:21:30,320 Speaker 1: think the tension in future work faster on the point 384 00:21:30,359 --> 00:21:34,920 Speaker 1: of due special distribution of work that is accelerating because 385 00:21:34,960 --> 00:21:37,560 Speaker 1: of the remote work, which is a new one. And 386 00:21:37,680 --> 00:21:39,320 Speaker 1: I think the one thing that we say in our 387 00:21:39,440 --> 00:21:42,840 Speaker 1: report is that the new lens that COVID has brought 388 00:21:43,080 --> 00:21:48,240 Speaker 1: beyond the acceleration is basically the notion that proximity is 389 00:21:48,280 --> 00:21:49,920 Speaker 1: a new lens to look at it when is it 390 00:21:50,040 --> 00:21:53,480 Speaker 1: needed and when is it not. And we at least 391 00:21:53,600 --> 00:21:56,200 Speaker 1: think that one more day of remote work per weak 392 00:21:56,359 --> 00:21:59,680 Speaker 1: week is possible for the average of the workforce. And 393 00:21:59,760 --> 00:22:01,879 Speaker 1: that would of course mean that people could live outside 394 00:22:01,920 --> 00:22:06,440 Speaker 1: cities for more of their time at least and commutes 395 00:22:06,520 --> 00:22:08,560 Speaker 1: and so one could be sort of dampened a little 396 00:22:08,600 --> 00:22:11,080 Speaker 1: bit from that. And the you know, the pressure on cities, 397 00:22:11,160 --> 00:22:14,600 Speaker 1: so I think there is a potential. We don't see 398 00:22:14,680 --> 00:22:17,560 Speaker 1: it as you know, people everybody will basically no longer 399 00:22:17,640 --> 00:22:20,320 Speaker 1: work at all together in a physical space because people 400 00:22:20,400 --> 00:22:23,920 Speaker 1: still need to meet. I mean, you talk about the 401 00:22:24,000 --> 00:22:26,359 Speaker 1: pressure on cities, and we heard about it in Dublin, 402 00:22:26,400 --> 00:22:28,399 Speaker 1: but in some sort of cities have also been the 403 00:22:28,440 --> 00:22:30,680 Speaker 1: salvation for quite a lot of economies. It's been the 404 00:22:30,760 --> 00:22:33,200 Speaker 1: great thing that you could bet on the last ten 405 00:22:33,240 --> 00:22:36,800 Speaker 1: to twenty years that there would be more jobs and 406 00:22:37,040 --> 00:22:41,840 Speaker 1: more prosperity being driven by cities. If you're a government, 407 00:22:41,880 --> 00:22:44,520 Speaker 1: should you be just thinking that that model has been 408 00:22:44,600 --> 00:22:47,000 Speaker 1: turned on its head or has it just been toned 409 00:22:47,040 --> 00:22:51,040 Speaker 1: down a bit? I would say it's a shift, not 410 00:22:51,440 --> 00:22:54,399 Speaker 1: a on its head. So when we say you go 411 00:22:54,640 --> 00:22:58,320 Speaker 1: from average about one day a week remote work to 412 00:22:58,440 --> 00:23:00,720 Speaker 1: two days a week, so adding a day to the 413 00:23:00,760 --> 00:23:03,159 Speaker 1: average workforce, of course, but for some parts of the 414 00:23:03,200 --> 00:23:06,119 Speaker 1: workforce it's much more, and others it's much less. That 415 00:23:06,320 --> 00:23:08,520 Speaker 1: is not yet turning the model up and its head. 416 00:23:08,880 --> 00:23:11,600 Speaker 1: But you see impacts on rent prices already, you see 417 00:23:11,640 --> 00:23:14,720 Speaker 1: some impacts on where people choose to live and so on. 418 00:23:14,880 --> 00:23:18,040 Speaker 1: So it is a real shift. Whether that's something that 419 00:23:18,200 --> 00:23:21,920 Speaker 1: then will accelerate or it's sort of is a level shift. 420 00:23:22,040 --> 00:23:25,560 Speaker 1: I think that the jury is still out, and there's 421 00:23:25,600 --> 00:23:31,200 Speaker 1: a big inequality piece because the people, as we've learned 422 00:23:31,560 --> 00:23:33,840 Speaker 1: over the months, of people who can work from home 423 00:23:34,080 --> 00:23:37,480 Speaker 1: and will maybe be taking advantage of voice opportunities buying 424 00:23:37,560 --> 00:23:41,119 Speaker 1: houses in the country and building up prices. There are 425 00:23:41,280 --> 00:23:46,560 Speaker 1: people who already relatively well off, whereas the lower half 426 00:23:46,640 --> 00:23:49,439 Speaker 1: of the income distribution, what what are all these changes 427 00:23:49,480 --> 00:23:52,520 Speaker 1: going to mean for them? So I think it is 428 00:23:53,080 --> 00:23:57,480 Speaker 1: um you know, disadvantaged groups are going to be impacted more. 429 00:23:57,600 --> 00:23:59,639 Speaker 1: I think there's two kinds of pressures that we need 430 00:23:59,680 --> 00:24:03,080 Speaker 1: to take into account. As I said, pre COVID, the 431 00:24:03,720 --> 00:24:07,280 Speaker 1: jobs gained jobs lost was imbalanced and even slightly positive. 432 00:24:08,040 --> 00:24:10,680 Speaker 1: We think about a hundred million more jobs will be 433 00:24:10,800 --> 00:24:17,080 Speaker 1: displaced by COVID and faster because everything is going across 434 00:24:17,119 --> 00:24:19,040 Speaker 1: lots of different acrourse how many countries I'm just trying 435 00:24:19,040 --> 00:24:23,879 Speaker 1: to and so you get a hund million more jobs 436 00:24:24,000 --> 00:24:27,640 Speaker 1: displaced earlier. So it used to be lots of jobs 437 00:24:27,720 --> 00:24:29,600 Speaker 1: displaced to more than two one a million, but you 438 00:24:29,680 --> 00:24:31,960 Speaker 1: get off that tournament, you get on a million that 439 00:24:32,040 --> 00:24:35,560 Speaker 1: are let's call it earlier, And by being earlier, the 440 00:24:35,720 --> 00:24:39,560 Speaker 1: mismatch might be bigger, which means that real skilling needs 441 00:24:39,600 --> 00:24:41,720 Speaker 1: to go a lot faster. One of the things that 442 00:24:41,840 --> 00:24:44,440 Speaker 1: makes this makes it all easier is if you have 443 00:24:44,600 --> 00:24:48,040 Speaker 1: faster growth. And the big thing that determines whether or 444 00:24:48,119 --> 00:24:54,080 Speaker 1: not we do grow more quickly is productivity. We've had 445 00:24:54,119 --> 00:24:56,800 Speaker 1: relatively slow productivity in the last growth in the last 446 00:24:56,840 --> 00:24:59,200 Speaker 1: few years and making more stuff with the same number 447 00:24:59,240 --> 00:25:03,680 Speaker 1: of people. Uh, if you listen to what you're talking 448 00:25:03,720 --> 00:25:08,760 Speaker 1: about in terms of more automation and more things online, 449 00:25:10,080 --> 00:25:12,680 Speaker 1: people working differently. It sounds like productivity is going to 450 00:25:12,760 --> 00:25:15,560 Speaker 1: go up. Is that what you found in your report? 451 00:25:15,960 --> 00:25:18,399 Speaker 1: What we wrote in the report Productivity and Growth, is 452 00:25:18,440 --> 00:25:22,560 Speaker 1: that the productivity potential has accelerated and could actually lift 453 00:25:22,680 --> 00:25:26,840 Speaker 1: one or two points in multiple brackets. And therefore the 454 00:25:26,920 --> 00:25:31,879 Speaker 1: productivity potential exists for a significant growth and so we 455 00:25:31,920 --> 00:25:34,280 Speaker 1: should say, sorry, just but one or two percentage points 456 00:25:34,280 --> 00:25:36,920 Speaker 1: for productivity. That's a big deal because the average is 457 00:25:37,000 --> 00:25:40,600 Speaker 1: between one and two potentially. So we think that on 458 00:25:40,680 --> 00:25:45,359 Speaker 1: a GDP per capital basis, if you have the nice 459 00:25:45,440 --> 00:25:49,280 Speaker 1: world of that productivity and demand, you can get to 460 00:25:49,400 --> 00:25:53,240 Speaker 1: a three percent growth for the next decade. If you, however, 461 00:25:53,760 --> 00:25:55,840 Speaker 1: are in a place whether demand doesn't come and this 462 00:25:55,920 --> 00:25:59,159 Speaker 1: productivity stays tepped as you described, you know, you're more 463 00:25:59,200 --> 00:26:02,480 Speaker 1: in the below one percent uh typic. And of course 464 00:26:02,760 --> 00:26:05,639 Speaker 1: you have an art scenary where the productivity comes the 465 00:26:05,760 --> 00:26:09,080 Speaker 1: demand doesn't, and that will lead to lots of labor 466 00:26:09,520 --> 00:26:12,200 Speaker 1: tension again because then basically we use the productivity to 467 00:26:12,280 --> 00:26:15,920 Speaker 1: do the same work with less. You know, the goldilocks 468 00:26:16,000 --> 00:26:20,000 Speaker 1: are that we do the productivity and demand and the 469 00:26:20,119 --> 00:26:23,479 Speaker 1: one thing that we have learned. I think in COVID 470 00:26:24,520 --> 00:26:26,959 Speaker 1: is it is possible to stimulate the demand. We can 471 00:26:27,000 --> 00:26:30,160 Speaker 1: have a whole debate about that point, but the reality 472 00:26:30,400 --> 00:26:37,320 Speaker 1: is we have secured an economy in twenty twenty, and 473 00:26:37,440 --> 00:26:39,480 Speaker 1: we're probably going to come out with a reasonable economy 474 00:26:39,560 --> 00:26:44,680 Speaker 1: now because we support it, and so then demand and 475 00:26:44,720 --> 00:26:47,359 Speaker 1: supply of time could be in sync. If it's not 476 00:26:47,520 --> 00:26:49,920 Speaker 1: in sync, this productivity will lead to more tension on 477 00:26:49,960 --> 00:26:52,760 Speaker 1: the job market, pressure on the job market story, I 478 00:26:52,800 --> 00:26:54,560 Speaker 1: should say, So there's a I mean, there is a 479 00:26:54,640 --> 00:26:57,720 Speaker 1: big difference in those two scenarios, and it feels like 480 00:26:59,200 --> 00:27:03,439 Speaker 1: the lower the demand that you see, the more likely 481 00:27:03,520 --> 00:27:07,680 Speaker 1: you're going to have this very unequal outcome with even 482 00:27:07,800 --> 00:27:11,879 Speaker 1: more even worse impacts for the people who have already 483 00:27:11,920 --> 00:27:14,640 Speaker 1: not done that well out of the last ten years 484 00:27:14,760 --> 00:27:17,040 Speaker 1: or so. So, if you're a government trying to make 485 00:27:17,080 --> 00:27:18,960 Speaker 1: sure that you're in the good scenario and not the 486 00:27:19,040 --> 00:27:23,520 Speaker 1: bad scenario, what should you be doing right now? I 487 00:27:23,680 --> 00:27:28,000 Speaker 1: think this exit out of the stimulus area needs to 488 00:27:28,119 --> 00:27:31,600 Speaker 1: be very carefully done, and it's not easy because it's 489 00:27:31,600 --> 00:27:36,960 Speaker 1: stuff that we haven't done at this scale. H Ever, 490 00:27:37,119 --> 00:27:38,720 Speaker 1: I think, or in at least in a long time 491 00:27:39,280 --> 00:27:42,320 Speaker 1: at this broad base across the world. But if you 492 00:27:42,400 --> 00:27:45,919 Speaker 1: kind of pull back before the engine runs, you might 493 00:27:46,000 --> 00:27:48,240 Speaker 1: actually get a temporary standstill, and you're more in the 494 00:27:48,320 --> 00:27:50,680 Speaker 1: negative scenario. If you hold it too long, of course, 495 00:27:50,720 --> 00:27:53,680 Speaker 1: it could be overheating, which is another discussion. But what 496 00:27:53,840 --> 00:27:56,040 Speaker 1: you would love to sort of say is, so take 497 00:27:56,119 --> 00:28:00,440 Speaker 1: the stimulus gas off when the underlying engine runs, because 498 00:28:00,480 --> 00:28:03,119 Speaker 1: then you know it will sort of at this and 499 00:28:03,359 --> 00:28:05,840 Speaker 1: and that that's a careful balancing act. If you look 500 00:28:05,880 --> 00:28:09,280 Speaker 1: at recoveries in the US that we studied over the 501 00:28:09,400 --> 00:28:13,159 Speaker 1: last seven years, you had once where it was in 502 00:28:13,320 --> 00:28:16,120 Speaker 1: sync post Wars, of course one of the bigger ones 503 00:28:16,920 --> 00:28:21,200 Speaker 1: um and where it was less in sync. Uh. And 504 00:28:22,119 --> 00:28:25,040 Speaker 1: also there have been disparities about that between the US 505 00:28:25,119 --> 00:28:27,760 Speaker 1: and Europe. I would say in the global financial crisis, 506 00:28:28,920 --> 00:28:32,320 Speaker 1: the US had more of a multiplier effect of stimulus 507 00:28:32,480 --> 00:28:35,680 Speaker 1: at the outset, not even at the highest levels. Then 508 00:28:35,720 --> 00:28:37,800 Speaker 1: Europe at at the moment, Europe is actually catching up 509 00:28:37,800 --> 00:28:40,480 Speaker 1: on the stimulus levels. So I think in that area 510 00:28:40,480 --> 00:28:42,760 Speaker 1: there's a lot of learning going on whether that will 511 00:28:42,800 --> 00:28:46,160 Speaker 1: be enough to put the demand and supply in sync. 512 00:28:47,280 --> 00:28:50,280 Speaker 1: But is any demand the right kind of demand? Because 513 00:28:50,360 --> 00:28:52,120 Speaker 1: this has obviously been one of the debates about the 514 00:28:52,160 --> 00:28:55,960 Speaker 1: stimulus in the US. It's it's massive in scale. But 515 00:28:56,120 --> 00:28:58,920 Speaker 1: one of the criticisms has been from the likes of 516 00:28:59,240 --> 00:29:01,960 Speaker 1: Larry Summers and others, is if you're going to spend 517 00:29:02,000 --> 00:29:04,840 Speaker 1: two trillion dollars and you want to be maximizing the 518 00:29:05,400 --> 00:29:09,680 Speaker 1: long term impact on growth and productivity, this isn't necessarily 519 00:29:09,800 --> 00:29:11,800 Speaker 1: how you would spend the money. I mean, do you 520 00:29:11,920 --> 00:29:15,520 Speaker 1: think is there a risk that this money is going 521 00:29:15,560 --> 00:29:18,560 Speaker 1: to be sort of gone in the next year or 522 00:29:18,600 --> 00:29:21,880 Speaker 1: two and you're still left with a need to do 523 00:29:22,120 --> 00:29:24,600 Speaker 1: the kind of investment infrastructure and other things that you 524 00:29:24,680 --> 00:29:26,960 Speaker 1: talk about in your report in order to really make 525 00:29:27,080 --> 00:29:31,080 Speaker 1: that longer term growth come through. You would always prefer 526 00:29:31,600 --> 00:29:34,600 Speaker 1: good long term growth as long as it also has 527 00:29:34,640 --> 00:29:36,280 Speaker 1: the short term growth in it, so because you don't 528 00:29:36,320 --> 00:29:38,520 Speaker 1: want that short term dips. So there's there's a nirvana 529 00:29:38,640 --> 00:29:42,360 Speaker 1: here that you would like to have. Um I think 530 00:29:42,440 --> 00:29:46,440 Speaker 1: we're i would say, in an experimental phase where we're 531 00:29:46,480 --> 00:29:49,760 Speaker 1: learning how this will work out, whether the productivity potential 532 00:29:49,800 --> 00:29:52,719 Speaker 1: will be balanced in the right way or not. Anyone, 533 00:29:53,440 --> 00:29:55,640 Speaker 1: Like we say you can't predict the business cycle, I 534 00:29:55,720 --> 00:29:57,920 Speaker 1: don't think you can really predict how this will fully 535 00:29:57,960 --> 00:30:01,800 Speaker 1: play out in the sentiments of people, uh, in how 536 00:30:01,840 --> 00:30:03,959 Speaker 1: it will be spent. But of course you would love 537 00:30:04,000 --> 00:30:06,080 Speaker 1: a fair share of this to go to long term investment. 538 00:30:06,680 --> 00:30:10,280 Speaker 1: But at the same time, you don't want a massive 539 00:30:10,520 --> 00:30:13,320 Speaker 1: restructuring wave to occur right now at the moment the 540 00:30:14,280 --> 00:30:17,360 Speaker 1: said handover things. I think the thing where we're now 541 00:30:17,480 --> 00:30:20,000 Speaker 1: learning we knew little about the virus. I think we 542 00:30:20,080 --> 00:30:23,120 Speaker 1: know very little about this handover moment where you need 543 00:30:23,200 --> 00:30:25,440 Speaker 1: to keep people in business, but you also trying to 544 00:30:25,840 --> 00:30:28,920 Speaker 1: achieve structural change. I mean it says it's a difficult balance. 545 00:30:29,280 --> 00:30:31,480 Speaker 1: Just going back to the world of worth, the big 546 00:30:31,600 --> 00:30:33,880 Speaker 1: numbers that you were talking about in terms of people 547 00:30:33,920 --> 00:30:37,920 Speaker 1: having to change jobs and reskill. Um. You know, the 548 00:30:38,000 --> 00:30:40,600 Speaker 1: great thing about your research is that you're always looking 549 00:30:40,720 --> 00:30:46,080 Speaker 1: at the experience around the world. Are there positive stories 550 00:30:46,160 --> 00:30:50,520 Speaker 1: you can tell about reskilling those workers because a lot 551 00:30:50,560 --> 00:30:52,480 Speaker 1: of governments are, certainly in the UK, there's a thing 552 00:30:52,560 --> 00:30:55,800 Speaker 1: that we're just not very good getting people from one 553 00:30:56,200 --> 00:30:59,160 Speaker 1: sector into another if they perhaps don't have the right 554 00:30:59,240 --> 00:31:02,960 Speaker 1: kind of skills. So I think there are a couple 555 00:31:03,000 --> 00:31:05,840 Speaker 1: of angles of positivity here. One is I think companies 556 00:31:05,960 --> 00:31:09,480 Speaker 1: are taking more responsibility for this task. Let's just be 557 00:31:09,560 --> 00:31:12,800 Speaker 1: clear this is also out of self enlightened interest because 558 00:31:12,880 --> 00:31:15,040 Speaker 1: many of the workers you need in the future are 559 00:31:15,080 --> 00:31:18,040 Speaker 1: not available in the places where people are located. So 560 00:31:18,120 --> 00:31:22,560 Speaker 1: companies are taking a larger share of this work in 561 00:31:22,680 --> 00:31:26,080 Speaker 1: retraining their workers. Another interesting thing which is a more 562 00:31:26,320 --> 00:31:31,280 Speaker 1: policy idea that is I think getting more attraction, which 563 00:31:31,320 --> 00:31:34,760 Speaker 1: is that it's no longer about job to job, degree 564 00:31:34,800 --> 00:31:38,160 Speaker 1: to to degree, but it's task to task. So let 565 00:31:38,240 --> 00:31:39,640 Speaker 1: me give you an example. If you have a job 566 00:31:39,720 --> 00:31:42,040 Speaker 1: but tent task and the new job had another tent task, 567 00:31:42,120 --> 00:31:45,440 Speaker 1: it could take four years to relearn it, whereas if 568 00:31:45,480 --> 00:31:48,479 Speaker 1: you go from tent task to you specialize in two tasks, 569 00:31:48,560 --> 00:31:51,880 Speaker 1: the relearning could be one or two years, and so 570 00:31:52,120 --> 00:31:55,840 Speaker 1: that thing gives a little bit more of potential for 571 00:31:55,960 --> 00:31:58,520 Speaker 1: speed of reskilling and the from from those two tasks. 572 00:31:58,560 --> 00:32:01,560 Speaker 1: People can of course an upskill to more tasks, but 573 00:32:02,000 --> 00:32:05,840 Speaker 1: it's no longer directly if you go away from you 574 00:32:05,920 --> 00:32:07,760 Speaker 1: have to have the full degree for the full job 575 00:32:08,920 --> 00:32:11,800 Speaker 1: to something that is more doable. In ref skilling, you 576 00:32:11,920 --> 00:32:14,640 Speaker 1: open up the gates for that. Some regulation changes are 577 00:32:14,720 --> 00:32:18,360 Speaker 1: sometimes needed because the regulation is sometimes oriented towards jobs 578 00:32:18,400 --> 00:32:20,960 Speaker 1: with full degrease rather than the task level. And it's 579 00:32:20,960 --> 00:32:23,240 Speaker 1: actually at the task level where the change is happening. 580 00:32:25,080 --> 00:32:26,680 Speaker 1: I guess finally we should say, I mean, do you 581 00:32:26,760 --> 00:32:30,240 Speaker 1: ever think about we've we've you've written a lot and 582 00:32:30,600 --> 00:32:33,080 Speaker 1: an enormous amount of energy has been focused on how 583 00:32:33,200 --> 00:32:35,760 Speaker 1: the world's going to change as a result of COVID. 584 00:32:36,080 --> 00:32:41,000 Speaker 1: Do you sometimes, maybe in the bath or something, wonder 585 00:32:41,080 --> 00:32:44,440 Speaker 1: what would happen if a year's time everything is exactly 586 00:32:44,480 --> 00:32:46,800 Speaker 1: the same and we've we've gone back to work and 587 00:32:46,880 --> 00:32:49,200 Speaker 1: we've actually decided that we really enjoy being at work 588 00:32:49,320 --> 00:32:52,720 Speaker 1: five days a week, and a lot of these long 589 00:32:52,840 --> 00:32:55,320 Speaker 1: term changes have just not happened. I mean, do you 590 00:32:55,400 --> 00:32:58,000 Speaker 1: think that's possible that this is all just a big overreaction. 591 00:32:58,760 --> 00:33:02,120 Speaker 1: I think there will be a fairer amount of you know, 592 00:33:02,280 --> 00:33:07,120 Speaker 1: catch up demand in parties, in bars, in travel, and 593 00:33:07,240 --> 00:33:10,840 Speaker 1: we see the early signals of that. So business travel 594 00:33:10,920 --> 00:33:12,240 Speaker 1: we don't see it yet, but we see it in 595 00:33:12,600 --> 00:33:16,160 Speaker 1: commercial travel, in personal travel. And I don't think people 596 00:33:16,240 --> 00:33:18,360 Speaker 1: have lost They need to go on all the day, 597 00:33:18,440 --> 00:33:20,520 Speaker 1: they need to go be together and solved. I don't 598 00:33:20,560 --> 00:33:24,120 Speaker 1: think that has changed. But will people make more careful 599 00:33:24,200 --> 00:33:27,920 Speaker 1: choices for what they will travel in business? Will they 600 00:33:28,040 --> 00:33:30,760 Speaker 1: more more careful choices when to stay one more day 601 00:33:30,800 --> 00:33:33,040 Speaker 1: at home and be efficient that way, I think that 602 00:33:33,160 --> 00:33:35,840 Speaker 1: will have shifted. I have a very simple framework and 603 00:33:35,880 --> 00:33:39,040 Speaker 1: that might help you think about this. If everybody likes 604 00:33:39,120 --> 00:33:42,760 Speaker 1: what happened, it's gonna stay. If nobody likes it, it's not. 605 00:33:42,920 --> 00:33:45,600 Speaker 1: Let me give you two examples. In telemedicine, on first 606 00:33:45,680 --> 00:33:48,960 Speaker 1: line contact, there's a big step up. The doctors actually 607 00:33:49,040 --> 00:33:51,400 Speaker 1: like it, the patients like it, the regulators like it, 608 00:33:51,480 --> 00:33:53,240 Speaker 1: and government likes it. So I do think there will 609 00:33:53,280 --> 00:33:56,280 Speaker 1: be heightened levels of telement in first line contact and 610 00:33:56,360 --> 00:33:59,640 Speaker 1: just got a lot better, like people actually like digital 611 00:34:00,160 --> 00:34:05,360 Speaker 1: with the bank. However, home schooling, the kids don't like it, 612 00:34:05,800 --> 00:34:08,480 Speaker 1: the parents don't like it, and the teachers think it's 613 00:34:08,520 --> 00:34:11,760 Speaker 1: better done in class. So guess what, when we open schools, 614 00:34:11,840 --> 00:34:13,920 Speaker 1: we went back, and when they're not open yet, when 615 00:34:14,000 --> 00:34:16,520 Speaker 1: we open them, we will go back. And so to me, 616 00:34:16,719 --> 00:34:18,600 Speaker 1: that might be a way to think about what sticks 617 00:34:18,640 --> 00:34:20,680 Speaker 1: are not And lots of things will be on a 618 00:34:20,760 --> 00:34:23,080 Speaker 1: spectrum in between these things, but that might be just 619 00:34:23,160 --> 00:34:26,920 Speaker 1: a way to think about it. Spencemit Coachure of the 620 00:34:27,080 --> 00:34:30,200 Speaker 1: Kinsie Global Institute. That was very clear. Thank you very much. 621 00:34:30,880 --> 00:34:41,440 Speaker 1: Thank you. So that's it for this episode of Stephanomics. 622 00:34:41,480 --> 00:34:43,520 Speaker 1: I'll be back next week with a lot more from 623 00:34:43,560 --> 00:34:46,359 Speaker 1: around the world. In the meantime, please if you could 624 00:34:46,440 --> 00:34:48,719 Speaker 1: take the time to rate the show, it would help 625 00:34:48,800 --> 00:34:51,600 Speaker 1: us broaden our reach. And for more news and analysis 626 00:34:51,640 --> 00:34:55,280 Speaker 1: from Bloomberg Economics, you can follow at Economics on Twitter. 627 00:34:56,200 --> 00:34:59,520 Speaker 1: This episode was produced by Magnus Hendrickson, with special thanks 628 00:34:59,560 --> 00:35:03,800 Speaker 1: to Janett Newman, Alonso Soto, Dara Doyle, and spend Smid. 629 00:35:04,440 --> 00:35:07,320 Speaker 1: Lucy Meekin is the executive producer of Stephanomics and the 630 00:35:07,400 --> 00:35:09,640 Speaker 1: head of Bloomberg Podcast is Francesco