Here are a few idle thoughts and personal takeaways about the impact of the COVID-19 pandemic and the ensuing panic among the public, in the financial markets, etc.:
- Supply chains that are built around the concept of enabling sellers to provide products at the lowest possible price don’t weather pandemics very well. Depending so heavily on a single country for manufacturing is clearly susceptible to a Black Swan event like the one in which we’re currently embroiled. As investors are almost always advised to diversify their portfolios, manufacturers should diversify their supply chains to weather disruptive events more effectively.
- Nation-state actors and cyber terrorists have been provided with an excellent example of how they might be able to severely disrupt life in developed countries, particularly the United States. While COVID-19 is a certainly a serious issue that requires the appropriate level of response, the panic buying of toilet paper, flour, sugar, milk, eggs, cake mixes, baby formula, diapers, cat litter (yes, cat litter!), etc. is clearly an overresponse when food-related supply chains, at least in the United States and many other developed nations, are still largely intact.
- To the point above, imagine if a nation-state actor or terrorist organization were successful in taking a handful of power plants off-line with the threatening message that more would be taken off-line in the near future. As demonstrated with the COVID-19 panic, there would be a huge run on not only basic necessities, but also on things like batteries, generators, flashlights, and hundreds of other items. It wouldn’t just be grocery stores and Costco stores with thousand-foot lines, but also Home Depot, Lowes and lots of hardware stores.
- Our residential broadband infrastructure seems to be holding up quite well with the addition of several million home-workers now suddenly added to the traffic burden. While I’m sure there are instances of poor broadband services for residential workers because of the additional load, they seem to be few and far between.
- One of the positives that may come out of this crisis is the realization by many decision-makers that lots of in-person meetings that incur significant travel costs can be easily replaced with on-line meetings. While not good for the already decimated travel and hospitality industries, we might experience a new wave of meeting efficiency that we hadn’t anticipated.
- There is likely to be a major increase, at least temporarily, in the number of victims of cybercrime and data breaches. As employees use their home computers – with inadequate endpoint protection and networks that incorporate hackable routers – to access corporate email and data assets on the corporate network, the security defenses that normally defend sensitive data resources will be bypassed in many cases. Expect a major uptick in security problems until organizations adapt to the new, hopefully temporary, reality of most or all of their workforce working remotely.
- Similarly, expect a major increase in social media-related cybercrime because people are hungry for information about COVID-19, and they’ll click on links that purport to offer information about it. As noted by Brian Krebs six days ago, a live Coronavirus map developed by Johns Hopkins University is being exploited as part of an infection kit that uses the tool as a component of a Java-based malware deployment plot.
In short, lots of problems to be expected in the near- to mid-term until a combination of decreasing infection rates and whatever new crisis is in the offing move our attention to some different topic.