Post-Covid and the New Normal
Scott Galloway is author of the new book Post Corona: From Crisis to Opportunity, professor of marketing at NYU Stern School of Business, and a serial entrepreneur. He spoke with City Journal associate editor Daniel Kennelly about what the future holds for Big Tech, New York, and other cities.
You say that one of Covid-19’s most enduring impacts will be as an “accelerant” of preexisting trends. What do you mean?
Take any trend—social, business, or personal—and fast-forward ten years. Even if your firm isn’t there yet, consumer behavior and the market now rest on the 2030 point on the trend line—positive or negative. If your firm had a weak balance sheet, it’s now untenable. If you’re in essential retail, your goods are more essential than ever. If you’re in discretionary retail, you are more discretionary than ever. In your personal life, if you were fighting with your partner, your rows are worse. Good relationships now have another ten years of history and goodwill.
Big cities like New York saw a massive exodus of tourists, office workers, and residents this year. Are the losses permanent? What can cities do to bring people back?
Forty years ago, it was fashionable to predict the death of cities, but they came roaring back. Young people revived cities because they wanted to live near other young people and to get access to culture and entertainment. That instinct will never change.
But remote work is here to stay (along with remote education, remote socializing, etc.) Twitter, Facebook, and Slack have all announced the move to a near 100 percent remote workforce. In New York, new office space is coming into the market only 59 percent leased, down from 74 percent. Fewer office workers means less street-level retail and fewer restaurants and dry cleaners. Post-coronavirus, we will still need office space, but much less, and it needs to be more flexible.
What can cities do? Cities are victims of their own success because the young people who make them great cannot afford to live in them. America’s cities face acute housing shortages at every price point, and that drives many other problems. But the silver lining to the coming commercial real estate crash is the opportunity to repurpose twentieth-century offices into twenty-first-century residences. When industry left New York City, we converted the buildings left behind into desirable loft condos. Our kids are going to do the same with midtown office towers. More housing in the city means less commuting traffic (and fewer cars overall, which means less space wasted on parking), more support for local businesses, greater civic engagement, and just better cities.
Big tech has enjoyed a banner year, but do you see that trend reversing once workers begin coming back to the office and life returns to “normal”?
No. First, there will be a new “normal” post corona. An NYU colleague of mine observed that in just a few weeks this spring, the median faculty member went from “online education over my dead body” to “I’m not stepping foot in a classroom until there’s a vaccine.” By the time there is a vaccine, they will have spent a year learning how to teach remotely, getting comfortable with the technology, and thinking about possibilities, not limitations. That’s happening in health care, inside corporations, in the arts, everywhere.
Second, the economic crunch will work to the advantage of the biggest players. Amazon, Apple, Google, Facebook, and Microsoft are going to emerge from this crisis with deeper pockets than ever, better entrenched customer relationships than ever—and weaker competition. When the rains return, there’s more foliage for fewer elephants.
Post Corona strikes a somewhat dour note when it comes to government, society, and our capacity to rebuild post-pandemic. Why is that?
There’s too much optimism in tech. It’s an institutional code not to recognize the externalities of scale that led to Cambridge Analytica and content on YouTube that radicalizes young men. Anyone who asks “Have we thought about if this happens?” or, more generally, gets in the way of the answer to the profound question—“How would we go from 10 to 200 million daily active users?”—gets sent to the Island of Misfit Careers.
It’s not enough to just trust the market to sort these things out. The free market has no moral compass; it is not a natural, self-regulating system. The world is what we make it, and it’s time we took more responsibility for the world we are making. Don’t get me wrong, optimism is America’s superpower, but we can’t let it blind us to the challenges we face.
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