As Australia emerges from lockdown, economists are debating if business will resume as usual or a “new norm” will emerge.

Ruthven Institute founder and economic futurist Phil Ruthven said this morning the crisis might make profitability more important for businesses. But he thinks the economy as a whole will not fundamentally change.

Ruthven pointed to the recovery of Australia’s economy after every single crisis it has faced. While these are interruptions of year to year performance, the long-term growth trend resumes quickly.

“Australia has experienced five depressions, 27 recessions, two world wars, and several severe pandemics since modern settlement some 230 years ago,” Ruthven said.

“These events punctuated and punctured our standard of living. However, they did not alter the emergence of the ages of the economy’s development and its products.

“Australia’s recovery from COVID-19 will not be centred on managing a different economy, a different mix of industries, and a different trading arena of products and nations – rather, it will be centred on managing our corporations up to world’s best practice.”


Profitability more important than ever

Ruthven admitted the crisis could claim some victims, but the best run businesses would not only survive but thrive.

“Well-strategised and well-led corporations that are at, or close to, world’s best practice profitability and functionality will survive and continue to do better than the rest of corporate Australia,” he said.

“They will last longer in the war of attrition, will be able to raise necessary capital, and will go on to even greater success on the aftermath of the pandemic.

“For a population of a mere 26 million, we have already developed an industry mix that makes sense.

“We need corporations to know the modern ways to achieve world best practice profitability via strategy, plans and functionality.”