My name is Andrew Allum. I'm a partner at L.E.K., and I lead our transport and logistics practice in Europe. The pandemic has left us with very high debts and very high taxes due to the government's response. I think this is likely to constrain business investment going forward. It's also led to a change in people's attitudes away from enterprise and towards bureaucracy, which, again, is likely to constrain business opportunity and business investment. But as far back as January 2020, our logistics clients were telling us about problems in China, empty vessels coming across the ocean. We could see just how big a problem was coming and how important it was going to be to the whole of society.
Changes is profound as these always lead to opportunities as well. We see, at the moment, the jobs market is very strong. There's opportunity for workers and also a stronger incentive for businesses to invest in automation to take out some of the drudgery in jobs and to move to more value added jobs. I think the UK and other advanced economies have come out of the pandemic better than many expected. This flavor of opportunity is what we see our clients trying to capitalize on. As businesses face the disruption that's coming, following the pandemic and the waves of changes in society, I think it's important to step back and think about the big decisions and think about what we've really learnt from the pandemic and what are the changes that we've seen will be sustained and how many things will go back to how they were before.
I think picking apart those two factors and working it through very carefully is crucial looking ahead. Our passenger transport clients faced enormous changes as people stopped traveling as the virus spread. Then, there were lockdowns, and they were told not to travel. Because in this country most public transport operators take revenue risk, they were no longer viable. They couldn't afford to run buses of the trains. Then, some of them were stopped. These changes were sudden and drastic. They had to think how they could continue to be viable businesses, how to take care of their staff, how to plan for reopening, what capacity to organize, how to keep their business and their assets and their staff together in a viable way for the future.
The biggest challenge in transport is how to rebuild patronage to get people back onto the buses and trains. That makes it viable. At the moment, with so few passengers, the revenues are down. Then, you have a question of what system you organize to balance. What should the timetable be? How much capacity should there be? That leads to, then, a lot of taxpayer subsidy. We have to remember, even before the pandemic, the buses and trains were heavily subsidized. It could be even bigger now. There's an important question where rail users/passengers on the train are typically wealthier than the average. They're getting this subsidy. I think policymakers and businesses need to think very carefully about this balance going forward.
In both transport and logistics, we've been helping our clients navigate this through focusing on the evidence, what's really going on in the market, in consumer habits, in the competitive environment around them, and helping bring that to bear when they need to make really crucial decisions. I think all decisions, in the end, are emotional, what feels like the right thing to do. You have to believe your advisor is on your side. Also, you need to be fully informed in terms of the evidence and the analysis that's relevant to make the best informed and the best decisions for your business. Because I think as we put the pandemic or the worst of it behind us, there are lots of lessons we've learned from new habits, new technologies, new things we've had to do that we can use to our advantage in society and in business in the future.
The one piece of advice I would always give is to remember the two brains from the famous book Thinking, Fast and Slow, and to always step back and use the slow brain that depends on analysis and careful thought when there are really crucial decisions to make.
