The pandemic cost the United States an estimated $16 trillion, and the World Health Organization estimated in May that about 15 million people have died worldwide.
The numbers are stunning, aren’t they?
Meanwhile, “another pandemic probably will happen in the next 50 years,” Michael Kremer, the University Professor in the Kenneth C. Griffin Department of Economics at the University of Chicago.
In any given year, the likelihood of a pandemic happening that’s half the severity of COVID-19 has been calculated at 2.6% a year.
I watched Kremer give the annual Richard Goode Lecture at the International Money Fund on Wednesday. Here’s what I took away:
• Billions, not trillions. As long as we spend billions on preparing or mitigating the next major pandemic, we’ll be ahead.
• Among the areas to consider investing in: social innovations to improve vaccine take-up, UV lights and better air filters to kill germs, and rapid-response institutions to do things like rapidly figure out how effective masks are.
(Here’s our Times of E story from early in the pandemic about scientists’ wish lists.)
The costs of climate change are similarly so large that almost any amount – as long as it’s in the billions, not trillions — will be worth it.
Here are four areas Kremer mentioned:
• Advances in geothermal energy
• Better weather forecasting to help farmers plant the right crops
• Improving the manufacturing process for steel
• Feed additive for animals to reduce methane
He also suggested establishing more innovation funds and offices. Development Innovation Ventures, USAID’s open innovation fund, invests in three tranches: $100,000, $1 million and higher. Before an idea or company moves up to a new investment level, it’s subjected to rigorous measurements about how many people it is reaching. Venture capital reinvented early-stage investing over the past 50 years or so; now, it’s time to adapt the financial structure to innovations where the social good outweighs the private market’s incentives.
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