This article contains an exclusive excerpt from the new bestseller by Marc Friedrich: The Greatest Opportunity of All Time—What we must learn now from the crisis and how you can profit from mankind’s greatest wealth transfer.
The year 2020 will go down in history books as the beginning of a lasting change of times. Worldwide, the Corona pandemic made us all painfully aware of how fragile our highly complex and advanced de facto economic and financial system is. Within days, the just-in-time production and supply chains collapsed or even came to a complete standstill—and the trigger was an invisible virus. This crisis has shown us in a hard and bitter way that our system is not resilient, it has shown what weaknesses it has, how big the cluster risks are and in what dangerous dependencies we find ourselves in this globalized world. It became clear to many people that nothing is set in stone for all eternity. Gigantic economic stimulus packages by the states and support programs worth billions by the central banks, excessively overwhelmed and mindlessly activist politicians, but also empty shelves, idle assembly lines, and a sharp rise in the number of short-time workers and unemployed make the historic scale of the situation clear.
Even if many do not want to admit it: We are in the midst of a historic paradigm shift. As bitter as it may be for many, we will no longer wake up in the old, familiar world and return to our old lives. Everything will change forever:
- how we work
- how we will move around in the future
- how and what we buy
- how we manage, travel, think, live, pay, invest
- how and what we produce
Such points in history are the foundation and the opportunity for sustainable change that humanity would never voluntarily initiate out of convenience and fear. Those who look to the past see that true and profound change is always forced by external circumstances. Through crises what has become obsolete becomes obvious, old things are sorted out and new things emerge. Both on a small scale and large scale. Not only our personal lives are affected, but entire industries, societies, political systems and countries. It is only through climate change that we have been forced to look for alternatives in energy production. The same is true for vaccines, medicines and technical developments. Only when man is powerless and sees no other way, is he ready for true reforms and (r)evolutions. Crises contain extreme risks, but also phenomenal chances.
The evolution of mankind is characterized by crises
Crises are essential for the progress of mankind. Humans learn through failure—trial and error. Crises serve as a springboard for human development. Only through catharsis is humanity ready to initiate change. It must be clear to everyone that profound transformations are always accompanied by losses and growing pains. Even if it sounds paradoxical, crises are important and they are great opportunities for humanity. We should welcome and embrace crises. After every crisis, humanity has evolved and gained in knowledge and prosperity. It will be the same this time. The economist Joseph Schumpeter calls it creative destruction. Such destruction is necessary for something new to emerge. The greater a crisis, the greater the opportunities it brings. Currently, we are facing the greatest transformation process of our lifetime. Various cycles are now ending and a new, great cycle is beginning. This has already been noticeable in the last few years: we were already in permanent crisis mode before Corona. One crisis was followed by a new and even bigger crisis: financial crisis, euro crisis, refugee crisis, climate crisis, demographic crisis, car crisis, economic downturn and debt crisis. And now, in a sense, the Corona crisis is being added as an accelerant. Now, within a short period of time, we are seeing rapid developments in many areas, all around the globe. Germany in particular will experience extreme changes and should see this as a process of renewal.
We feel too safe in our perfectly organized everyday lives with supermarkets open all the time, permanent distraction, sprinkling and sound from iPhone, TikTok, Netflix, and the freedom that we take for granted.
The lockdowns shook this world, which we thought was safe, to its foundations. Since then, we have been in an exceptional situation and more divided than we have been in a long time. Some are afraid of Corona and fear for their health. Others are afraid of unemployment and insolvency and fear for their very economic existence. Still others are afraid for civil liberties and democracy. All these fears are legitimate and understandable. They must be respected and taken seriously and not ridiculed. In order to make society healthy, we have to approach each other, listen to each other and tolerate and respect each other’s opinions. Unfortunately, at the moment I often observe exactly the opposite: that we divide ourselves and are afraid of each other—anyone could be contagious.
It is important to look at the facts objectively and come up with constructive solutions. Politicians must begin to tell us the full truth and not engage in salami tactics. To date, we do not know how great the economic damage is, but also the social, political and psychological damage. Especially among the youngest members of our society, the pandemic and the measures taken to contain it are likely to have had significant consequences.
2020 was a major turning point. The world we will live in in the future will not be the same. A completely new era will begin—regardless of how long the Corona pandemic keeps us in suspense.
The cards will be reshuffled
Germany’s economy is dominated by mechanical engineering, the automotive industry, and other manufacturing companies. It is generally known that our key industries have simply missed or even ignored one trend or another. Only now, through the accumulation of crises, will our economy be forced to reinvent itself or fail. Volkswagen has already embarked on a new path and is fully committed to electro-mobility. Others are trying their hand at hydrogen and car sharing. Which strategy will be the right one and who will survive remains to be seen. The fact is: Doing nothing is not a solution! Standstill is death! Movement is life! Only companies and industries that embrace change and actively shape it will survive. This is true for all of us! The great sifting has begun. If we do not have the courage now to break new ground and reinvent ourselves, we will have to bid farewell to our prosperity.
What can we do?
How can we as companies, as people and as a society emerge stronger from crises and prepare for them? A long-standing principle helps here: prevention is better than aftercare. Diversification, innovation and decentralized systems make sense in order to reduce dependencies.
At the same time, one should not rely too much on politics, but take action themself. True change always comes from below, from us the people. What is often missing in politics, we now have more and more in the form of groundbreaking technology: for the first time, we have great helpers on our side in the form of digitalization and artificial intelligence. All of this presents an enormous opportunity to master the crises and emerge stronger. Never before has humanity had this opportunity.
We must all be clear: If we cling to the old, as many politicians and decision-makers are desperately trying and propagating at the moment, the collateral damage for all of us will become ever greater—economically, monetarily, socially and politically. It is a law of nature that the developments that progress and change, take place in cycles, and these cycles cannot be stopped. Either we are prepared to acknowledge progress and ongoing change, or we will be overrun by them.
We cannot avoid crises, but we can use them and learn from them. The development of mankind is an incredible success story. But it has always been accompanied by crises. Crises have always been part of human history.
The greater a crisis, the greater the leap forward it makes possible. The coming crisis has the potential to initiate a complete reboot and catapult us to a new level of consciousness. Because this time, it’s not just a local crisis or the crisis of only an industry or one country. This time it’s a global crisis and we as humanity are being called upon to work together to overcome it. This is exhausting and new, but essential for our development. If we make the right decisions now, pull together as a human race, end trench warfare, break down mental barriers, use technology for all of us and not to maximize the profit of individual countries, companies or other players; if we have the courage now to make the right and uncomfortable decisions, tread new, unknown paths and cut off old braids, then a golden age will begin for all of us.
The content of this article was translated from the German original: https://www.friedrich-partner.de/blog-post/krisen-sind-wichtig-krisen-sind-chancen loaded 22.11.2021