In the financial crisis of 2009, governments around the world announced plans to get their economies growing again, and one famous phrase, ‘shovel ready’ was adopted by governments. A decade later and the phrase is back.
Shovel ready projects are infrastructure projects that can be executed quickly, putting a portion of people back to work.
As early as April, Federal Infrastructure Minister, Katherine McKenna announced plans for Canada to rush through billions of dollars of allocated infrastructure funds to stimulate the economy as we exit the emergency phase and enter into the recovery phase. Other countries are following suit.
Perhaps, this is even more important than the previous financial crisis. While the budget deficit is ballooning and quickly, there is a much larger crisis emerging as companies start to evaluate whether they can still survive in the recovery phase without government stimulus. Governments are also grappling with how much stimulus to continue providing. The US is considering a quick end to the scheme and Canada is potentially looking to extend. Stop the scheme too quickly and you risk mass lay-offs.
Those shops and restaurants that are reopening are operating but at a reduced capacity, which makes it extremely difficult to survive longer term. Governments and companies will need to push the boundaries of innovation to keep going and ultimately revive their economies.