Most of the developed world thought COVID-19 was bad enough. But a bird flu outbreak could be significantly worse, particularly for businesses.
Even before March 2020 when the Western world went into lockdown, scientists were busy worrying about the impact of avian flu strains. These viruses have the ability to jump to mammals and potentially spread between them, under the right circumstances. Already, we’ve seen seal populations decimated because of the ability of the virus to hop from one animal to another.
Now, the worry is that the same will happen to humans. The virus may learn how to become infectious among people, without the need for a prior avian host.
It wouldn’t be the first time bird flu outbreaks have occurred if that was to happen. Multiple pandemics over the years broke out because viruses from farmed birds spread to local farmers who then passed it to the rest of the population, following a successful mutation. The same thing could happen again in the near future. In fact, Bill Gates predicted more than ten years ago that a bird flu-like virus would be the “big one” that would cause untold suffering globally.
How A Bird Flu Outbreak Could Harm Businesses
The news media is currently reporting on the outbreak of bird flu among humans in several countries, including Peru and the UK. However, the effect on the economy outside of agriculture remains minimal. Even though widespread culling is taking place, governments are not closing companies or forcing lockdowns.
That could change, quickly, though. When SARS broke out in Toronto in 2003, the city lost over $1 billion in revenues and required more than two years to recover. People didn’t want to go to work, and the government put ordinances in place that made it difficult for many firms to operate.
Back then, most brands weren’t getting ready for a pandemic. (Terrorism was the only real existential threat they were dealing with). However, since 2020, firms are wising up to the risks. COVID-19 taught them a valuable lesson in the ability to adapt to government regulations, disrupted supply chains, and low demand.
Even so, most firms still don’t have the apparatus in place to respond effectively to a pandemic. We’re not seeing the investment needed in hand sanitizer stations, work-from-home arrangements, or supply chain robustness.
Furthermore, even businesses that could cope with another COVID-19-like event probably aren’t ready for a bird flu crisis. During the last pandemic, most workers still agreed to go to work because the risks were relatively low. That calculus changes dramatically when a disease has a 10 to 20 percent fatality rate. Most employees will simply prefer to remain in their homes and avoid the risk, especially if otherwise healthy coworkers become seriously ill.
Interestingly, during the SARS outbreak in Toronto, only 225 residents became sick before authorities got the disease under control. That’s a tiny figure compared to the population of the city. However, it was more than enough to spark panic and cause significant damage to the economy. Imagine what would happen if 225,000 people became infected and 50,000 died. That would be a disaster for the city.
Geography Isn’t Protection
Geography is no barrier to a bird flu pandemic, either. Just like other highly communicable diseases, it will spread to every corner of the globe, as it did before. Countries will close their borders, factories in China will shut down, and basic inputs will grind to a halt. Governments will print more money, central banks will raise interest rates further, and market conditions will deteriorate once more.
Therefore, even spreading out operations probably won’t help brands escape the worst of a bird flu outbreak. No country will remain isolated for long, even if they implement lockdown measures immediately.
Furthermore, firms that distance themselves from their supply chains will face increasing disruption. Companies won’t be able to maintain a consistent service, damaging their brand image and forcing customers to look elsewhere.
Human Capital Costs
Then there are the human capital costs that could come from a bird flu pandemic with a high fatality rate. Unlike COVID-19 which mainly killed non-working-age people, a bird flu pandemic is likely deadly across the board, in-line with prior outbreaks. Therefore, the consequences for human capital will be significant.
There are two main reasons for this:
- Workers may become sick or die from contracting the disease
- Workers may refuse to come to work, train, or take part in the economy during the acute phase of the pandemic
As such, the productive capacity of your workforce could decline. It may not be possible to continue meeting client orders in the same volumes, once a dangerous pandemic becomes more active among the population.
At present, most firms are hoping and praying that a bird flu pandemic won’t hit. But history teaches us that that’s wishful and unrealistic thinking. It’s not a matter of if, but when. Companies must start preparing for the inevitable now instead of believing in business-as-usual.
Of course, many firms simply can’t fathom a situation where 10 percent or more of the population dies. It seems too movie-like to be real. But it has happened in human history before, and given the number of bird flu outbreaks there have been over the last twenty years, it is highly likely to happen again.
Public Health Authorities Are Already Taking A Bird Flu Pandemic Seriously
Public health officials are already doing their part to prepare for a possible avian flu outbreak. The UK Health Security Agency, for instance, is working on various blood tests that can detect antibodies against the virus so that it is ready to respond when the disease arrives.
Currently, investigators are trying to figure out if the virus has the ability to move between humans. Currently, the H5N1 virus doesn’t move easily to human beings, but that could change over the coming years. Now there are more than 850 cases of human bird flu transmission recorded globally, with a worryingly high fatality rate. Businesses need to prepare themselves now to avoid a similar surprise to COVID-19.
