More national industry and less sun and sand? Economic sectors rethink their future after the virus

Traffic crash has reduced pollution in half in the main Spanish cities. Flats converted to Airbnb have passed to the traditional rent, which together with the economic stoppage could alleviate the prices in pressured neighborhoods. The Government has realized that having an essential industry at home is necessary in order not to see ourselves in another like this. Researchers and health officials point out that when the pandemic ends, our country must invest more in its health.

The coronavirus crisis has changed many things in a very short time and is forcing companies, organizations and countries to draw scenarios on what the next day will be like. And not only that: it also opens the closure to the field of "opportunities", of "good times" to "rethink" strategies and change. Industry as an example. "In this crisis it has been seen that industry is part of the solution (...) It is a good opportunity to relocate a certain essential industry that Spain and Europe lost," acknowledged Minister Reyes Maroto in an interview in The country.

"A fundamental element of the 'futures' is that they are only achieved when you talk about them and work to feed them. It is the first thing you learn when you work on this: you identify a possible scenario and define the strategy for its fulfillment," he points out. Ángel Barbero, founder of the consultancy Recúbica, which works with companies that want to anticipate trends and prepare for them. "You can't always enforce one hundred percent compliance, but by verbalizing it you define certain things and combine wills to make the strings move and occur."

What will the post-pandemic economy be like? Or, more specifically, how will companies, governments and citizens want it to be? Will more houses with terraces be built now that they are such a precious asset? Or with office spaces, if teleworking increases? Will cities be reorganized so as not to return to contamination levels prior to confinement? Will Spain continue to live on sun and beach tourism? Will you prioritize healthcare in future budgets? Will the applause to health workers and employees of the crisis remain a gesture, or will their work be valued with better salaries given that they have been shown to be essential?

More investment in healthcare

"I imagine we will learn," says Mercedes Sánchez-Granjel, professor of the History of Medicine at the University of Salamanca. "Since the end of the 20th century, there has been a boom in infectious diseases. The term emerging disease was coined to refer to them. An important factor is the cut in the health budget. There is naive confidence among the population in the possibilities of science and a dismantling of health resources because everything is believed to be controlled and not considered a priority. When a pandemic comes, we see the consequences. "

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In the professor's opinion, the Government put economic and political reasons before adopting preventive measures to prevent the virus from spreading. The surprising thing, he adds, is that this is not new. "It has happened throughout history. It was so with the plague and cholera. The WHO said in late February that the probability of the epidemic spreading to Europe was high. And Spain did not take action until thirty days after the first deceased. They have put our health at risk. "

Health systems changed after previous epidemics. The coronavirus could have the same effect. At the prevention level, quarantines and essential hospitals (such as tuberculosis sanatoriums) have a long tradition. "Following the 1918 epidemic or the AIDS pandemic, investment in medical research increased," he continues. "I want to think that this situation will lead our politicians to give priority attention to health. We have always boasted of having one of the best in the world. Now it has been seen that we did not have sufficient resources."

According to Barbero, whose company works with a public hospital manager, the hospital management sector handles two scenarios. "The most important question is how much weight does the private have in the public-private model. It is what is in question," he explains. "But we run the risk that nothing will happen, that everything will be applauded and that public health will not be reinforced."

"From a business point of view, one scenario is for public health to be strengthened. But the resources are not sufficient to build and manage, so there will continue to be private management of the public or assignment of that management," he continues. "Perhaps the terms of hiring will change. Until now, it has been subcontracted with efficiency criteria. And that efficiency has been questioned. Possible centralization will also be important. Hospital management companies are based on agreements with right-wing autonomous governments. If the model changes, they will have problems. "

Less sun and beach

Time before the coronavirus, Spain, which based its recovery on tourism, was considering whether it should reduce its dependence on the famous sun and beach, based on large volumes of tourists that leave little margin. Last summer, hoteliers in the Balearic Islands and Mallorca had to throw prices before the recovery of cheaper destinations such as Egypt, Tunisia, Morocco and Turkey.

"There was a certain unanimity in which the model had to be varied," says Fabián González, analyst at PhocusWright, who participated this week in an event with industry heavyweights to analyze the future of the sector. "With the financial crisis that is coming, many hotels will stay on the road. Perhaps it is a good time to rethink strategies on which tourism model we want. We are in a bad scenario, there will be a change and taking advantage of it we have to change.

The Military Emergency Unit in Benidorm

The Military Emergency Unit in Benidorm

EFE / Manuel Lorenzo

The government's plans are to boost national tourism this year and reinforce the idea that Spain is a "safe destination" later. That the health crisis does not affect our image abroad. It is counted that the 83 million international tourists will not return en masse this 2020 and that the Spanish will prefer inland destinations. "Common sense dictates that crowds and urban tourism will be avoided this year. There will be more inland tourism, rural tourism, large open spaces, mountains and towns," continues González. "Movement to wellness categories is also anticipated: spas and spas."

The recovery of tourism will go through classes. On the one hand, the increase in unemployment, the fall in disposable income and the possibility that many people do not take vacations because they are making up for lost hours will cause not everyone to travel. "People will travel with money. And the highest segments will grow, with four or five stars and luxury, because they are supposed to have a higher position in cleanliness and hygiene standards," added the analyst.

In contrast, large hotels that base their business on volume, common in coastal destinations, will have a worse time. "People will not want to be with a thousand tourists from all over the world. Crowds will be avoided. And these hotels are only profitable with high occupancy," he concludes. "They can be saved with ICO credits, but what then? What if that demand does not return and clients no longer want mass tourism? I think it is the debate that they will be having in the government: how to save companies without squandering resources, because saving a company that is doomed to failure is tough. "

The return of the factories

The problems of supplying sanitary materials have revealed a reality: the relocation of factories to cheaper countries ends up taking its toll when, in times of crisis, domestic production is necessary. In addition to stressing that the coronavirus is an "opportunity" to bring the industry back, the Government announced the creation of a map that will measure the production of sanitary equipment in Spain in real time.

"Right now, this is a totally atypical economy. The priority is the health of the population. In the health sector, we must see how to reconvert some industries -chemistry, pharmaceutical- where the percentage of imported inputs is relatively high, "said Miguel Cardoso, chief economist for Spain at BBVA Research." In the short term, there is the need to replace them. "

Image of a Shanghai mask factory, which has added production lines to increase its capacity to 120%

Image of a Shanghai mask factory, which has added production lines to increase its capacity to 120%


The question is how to make that short-term need a long-term priority and what effect it will have. "Whether it becomes permanent in the medium term is more debatable. Much of the automobile production process is based on production chains around the world. Does it make sense to return to an environment where we buy domestically produced automobiles?" Cardoso continues. "This is excessively expensive. Much of the reduction in the prices of these products is based on productive specialization at a global level. Going back would entail significant costs."

The Ministry's proposal involves relocating "part" of the essential industry. The textile sector, dismantled in the last decade, argues that it could diversify and bring part of the production back. From BBVA they consider that this bet must assess which sectors provide the most added value.

"At a global level, the industry is losing weight, both in employment and in added value. Technological improvements automate a series of processes and high added value services gain weight. I would not speak of reindustrializing, but rather concentrating on sectors that they grow and in which the added value is high, "concludes the economist. "Where there are major technological advances and growth in demand. I do not want to give frivolous examples, but there are many people developing entertainment applications and things to do remotely. Before, there was not so much demand. Construction should generate another type of habitability. .. ".

Return, or not, to high levels of contamination

The succession of epidemics in the past led to the sanitation of cities, the creation of extensions and sewerage systems to avoid overcrowding and new diseases. According a Harvard analysis, air pollution is related to taHigher mortality rates for people infected with Covid-19. Is it an opportunity to change urban design and start lowering it?

"Many of us are projecting wishes and what we would like to see happen," says Miguel Álvarez, from the group specialized in urban planning and mobility, Nación Rotonda. "But it seems a bit short to make such a judgment, because the opposite effect may happen. In past epidemics more hygienist cities were madeBut that also started with a lot of bourgeoisie going outside to leave the polluted center. And it was contemporary with the creation of the railway. Some say that we could see an increase in the demand for villas. But that intersects with other trends: people's ability to move is not so great. "

Barcelona breaches the legal limits of air pollution

Barcelona breaches the legal limits of air pollution

CC by-sa Albert Torelló (Flickr)

In the field of transport, Álvarez points out that there is consensus on two variables. "There will be an aversion to using public transport due to the possibility of contagion, although nobody knows how to quantify that in terms of modal transfer: how many people are going to exchange that trip for the car, bicycle or walking," he says. "The other is that mobility in general will decrease due to the drop in activity. That already happened in the previous crisis, traffic and public transport trips fell. What we do not know is how much it will fall."

The interesting thing will be what trend is imposed. "If the transfer of public transport to the car is much greater than mobility decreases, we could find ourselves, paradoxically, with more traffic jams than before," he continues. "And they can lower wages and people have less money to travel by car ... but in a context of lower gasoline prices and garages, perhaps they will end up taking more."

Before the coronavirus, the scheme to drive mobility with fewer emissions was based on three layers: reduce, change and improve. "Reduce non-essential traffic, trade dirty trips for clean trips, and make dirty ones cleaner," he explains. In the last days, and after weeks ignoring its international relevance, the Government has begun to give prominence to the bicycle for post-confinement trips.

As in other sectors, part of the changes will be driven by the demands of the population. "There is a part of the campaign and public debate," concludes Álvarez. "It has happened with the bike: there was a certain movement in the networks to promote it and in the end, Minister Ribera came out to say that it was a good idea, they asked Almeida and said that Bicimad will open ... We will see if the actors end up marking the agenda".


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