Executive
Perspectives

Omicron fact pack:

Is Omicron Signaling a
Shift to Endemic COVID?
Entering the Third Year of COVID-19
January 2022

OMICRON IS A CONCERN DESPITE LOWER SEVERITY – BOOSTERS CRITICAL

BCG Executive
Perspectives

Studies of the variant show it is more transmissible than Delta, as it evades prior immunity. But it
is less severe: it has a 40-45% lower risk of hospitalization, with reduced infectivity of lung cells
compared with Delta. Nonetheless, the variant will put pressure on health care systems in someareas given its high transmissibility, which is likely to render containment measures less effective.

IN THIS DOCUMENT

Vaccine boosters are critical for reducing the risk of infection (60%+) and severe illness (~90%),
and an mRNA booster can restore the effectiveness even of some non-mRNA vaccines.

LEADERS NEED TO SUPPORT THE TRANSITION TO ENDEMIC COVID-19
We need to prepare to live with COVID-19 in the years ahead and continue to evolve interventions
and collaboration to support the transition toward endemic COVID-19. We are better prepared now
to do so – given the availability of vaccines, antivirals, and infusion therapies; reliable diagnosing
and sequencing; and improved health care system capacity.
Yet there are many areas we still need to improve on. Governments should accelerate support for
global equity in COVID-19 testing, vaccines, and therapeutics; invest in infrastructure to enable speed
at scale for fighting new variants; increase vaccine adoption; and normalize the response to newwaves. Businesses should work closely with governments and build flexibility in their operations.
1. Reported cases on 13th January (note: not a seven-day rolling average) – the highest peak till 17th January 2022;
Sources: BCG analysis and case experience; sources for numbers quoted within the document

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

Omicron, now the dominant COVID-19 variant, caused significant spikes in cases – reaching 3.3
million daily cases globally in January1, more than three times the previous waves' peaks.

2

BCG Executive
Perspectives
AGENDA
Our Dec 2021 Executives
Perspectives edition
focused on early insights
into the Omicron variant

Latest developments on Omicron
Scenarios for 2022 and potential move to endemic COVID-19
Implications for public and private sector leaders

UPDATED ANALYSES AND IMPACT
COVID-19 economic and business impact

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

COVID-19 | UPDATES AND FUTURE SCENARIOS

3

The Omicron wave has swept across nations, infecting millions

COVID-19 cases and fatalities continuing to grow globally

Imperative to bolster boosters

329M 56M

5.6M

80%+

5.4x

89%

# of cumulative
confirmed cases(since beginningof the pandemic)# of cumulative
fatalities(since beginningof the pandemic)

Percentage of
new cases inmajor countries
that were
Omicron1 in past
two weeks

Higher riskof reinfection vs.
Delta variant2

Booster
effectivenessagainsthospitalization
upon infection
with Omicron# of active
COVID-19 cases
currently

1. Countries include the US, the UK, Canada, Australia, South Africa, India, Indonesia, Japan, Israel, Romania, Spain, Mexico, Colombia, etc. 2. Imperial College study. Sources: Johns Hopkins CSSE; Our World in Data; Worldometer, BCG

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

As of 17 Jan 2022

4

Summary

Is Omicron signaling a shift to endemic COVID-19?

1

2

3

Omicron: latest
developments

Future of thepandemic:
scenarios andpredictions

Implications
for leaders

2

Vaccines continue to protect - boosters are critical for reducing risk of infection (60%+) and hospitalization (~90%). The increasein hospitalization rates has been driven largely by the unvaccinated and nonboosted population

3

Vaccines are <20% effective against infection 3 months after the second dose. mRNA boosters can significantly recover protection

4

Impact of COVID-19 waves depends on the “immunity wall” (a function of natural immunity from previous infections, andvaccines and booster type, uptake, and timing) – which differs by country, and the progression of the virus

5

Case study: UK built strong immunity wall via early robust booster rollout, reducing hospitalizations, and restrictions

6

Cases expected to peak in January in most regions – followed by declines; some East Asian countries with peaks in February-March

1 Despite the emergence of new, more transmissible variants, we are better prepared this time compared with 2 years ago. But
we must continue to solve for global inequity in resources to fight the virus
2 Two scenarios for 2022 – with a transition to endemic COVID-19 the most likely scenario
3 Endemic state: COVID-19 will continue to be present, with normalized infection rates, only localized flare-ups & limited disruptions
1 Transition to endemic state is rooted in equitable booster rollout and increased demand for vaccines – supporting shifts ingovernment intervention and behaviors
2

Public sector: Prepare for emerging new variants and support global equity, while positioning for endemic COVID-19

3

Private sector: Localize COVID-19 requirements, support easy diagnosis and access, and build flexibility in op model

Source: BCG research, analysis, and experience

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

1 Omicron has dwarfed previous peaks, quickly displacing prior variants. It is more transmissible than Delta but less severe

5

1.1

The new wave driven by Omicron has dwarfed previous case peaks,
quickly displacing prior variants

Omicron's spread in Europe, North America and Asia drove
an unprecedented peak of cases in the past month

It became dominant variant within amonth – now 95%+ of all cases in the US3

Daily new cases (7-day rolling average)
3,000,000

100%
90%

North
America

2,000,000

Asia1

80%

South
America

70%

North
America50%

Africa1,000,000

Europe
0
Jan
2021
0%

Feb

Mar

Apr

May

-35% +20% +60% -15%

Jun

Jul

Aug

Sep

-40% +30% +25% -20%

Oct

Nov

Dec

Jan
2022

60%

40%
30%
20%
10%
0%

Nov 20 Nov 27 Dec 4 Dec 11 Dec 18 Dec 25 Jan 1
2021
2022

-20% +25% +55%

Month-on-month growth of new cases2
1. Includes Oceania (Australia, New Zealand, Papua New Guinea, and surrounding island nations of the Pacific Ocean). 2. Calculated monthly as average of daily cases comparedwith previous month’s daily cases and rounded to nearest 5%; 3. Week ending 1/1, Nowcast estimates. Sources: Johns Hopkins CSSE; Our World in Data; Worldometer; CDC, press search; BCG research and analyses

Other

Delta

OmicronJan 8

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

As of 17 Jan 2022

6

What the science has told us:
Omicron is more transmissible but less severe than Delta

Omicron is more transmissible than Delta due to higher
immune evasiveness...
Household secondary attack rate (%)1
Unvaccinated

28%

Delta

OmicronFully vaccinated/previous infection

Booster

32%

29%

40-45%

reduction in the risk of
hospitalization relative to
Delta at a population level2

74%

fewer ICU
admissions
relative to Delta

25%

19%
11%

Similar transmissibility
among unvaccinated…however, infections are less severe

Higher transmissibility as Omicron
evades prior antibodies(e.g., 5.4x higher risk of reinfection vs. Delta)

in length of hospitalization for those
70% decrease
infected with Omicron relative to Delta

Low severity because Omicron variant affects primarily the upper
respiratory cells – but has reduced lung cell infectivity

Very fast-moving variant, which will put pressure on health systems (despite lower hospitalization rates) –given higher transmission rates, Omicron is likely to render containment measures less effective.
1. Proportion of those who got the virus variant after being exposed to it from someone else (primary case) who had the variant in the household. 2. When using hospitalization lasting 1 day or longer or hospitalizations with the ECDS discharge field recorded as “admitted” as the endpoint;
Source: SARS-CoV-2 Omicron VOC Transmission in Danish Households study by medRxiv (founded by Cold Spring Harbor Laboratory, Yale University, and BMJ) (left side) and Imperial College London and "Clinical outcomes among patients infected with Omicron (B.1.1.529) SARS-CoV-2 variant
in southern California,” Joseph L., et. al (right side), FT, BCG research and analyses. Note: Data might be skewed given concentration of Omicron outbreaks among younger groups, and higher vaccination rates (protecting against hospitalization) now vs. at peak of Delta

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

1.1

7Vaccines continue to protect – boosters are especially critical for reducing risk ofinfection, severe illness, and hospitalization

Vaccines less effective against Omicron, unless booster applied.
Booster offers strong protection against hospitalization

Rise in hospitalizations driven by
the unvaccinated and nonboosted
Example: New York City3

Dose

1

2

2

Booster

Weeks after dose

4+

2-24

25+

2+

Number of hospitalizations
3,500
3,000

Reduced risk of symptomatic
Omicron vs unvaccinated people1

26%

18%

2%

63%

2,500
2,000
1,500

Vaccine efficacy against
Omicron hospitalization1,2

94%

89%

Vaccinated

12/19

0

12/12

10+

12/05

2-9

11/28

500
11/21

Booster

11/14

Weeks after dose

Booster

10/31

Dose

11/07

1,000

Unvaccinated

1. 95% confidence interval, all vaccine brands combined in the UK (BioNTech Pfizer, Moderna, AstraZeneca, etc.); 2. Study focused on those aged 65 years or older. The percentage of those not hospitalized, out of those infected by Omicron, falling in the category (e.g., vaccinated with one dose,
boosted, etc.) Sources: Technical briefing, Update on hospitalization and vaccine effectiveness for Omicron VOC-21NOV-01 (B.1.1.529) UK health and security agency 31st Dec 2021; 3. NYC Department of Health and Mental Hygiene. Sources: Business Insider, CDC, BCG research and analyses

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

1.2

8

Oxford-AstraZeneca significantly less effective,
but an mRNA booster can improve effectiveness

Pfizer or Moderna vaccines less effective against Omicron (vs Delta),
but a third booster can recover effectiveness to 60-70%
Vaccine effectiveness against symptomatic disease
Pfizer-BioNTechsecond dose

Pfizer-BioNTech
boosterModernaboosterModernasecond doseModernabooster

100%

100%

100%

80%

80%

80%

60%

60%

60%

40%

40%

40%

20%

20%

20%

0%

0%

0%

2–4 5–9 10–14 15–19 20–24

2–4 5–9 10+

2–4

5–9

2–13

13–26

26+

2–9

9+

Oxford-AstraZeneca
second dose

Pfizer-BioNTech
booster

2–4 5–9 10–14 15–19 20–24

2–4 5–9 10+Modernabooster

2–4

5–9

Time since vaccine taken (weeks)

OmicronDelta

Source: UK's SARS-CoV-2 variants of concern and variants under investigation in England Technical briefing: Update on hospitalization and vaccine effectiveness for Omicron VOC-21NOV-01 (B.1.1.529); to estimate vaccine effectiveness against
hospitalization the odds ratios (OR) for symptomatic disease were multiplied by the hazard ratios (HR) for hospitalization among symptomatic cases: VE hospitalization = 1-(OR symptomatic disease x HR hospitalization); BCG research and analyses

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

vaccines, two doses are <20% effective against infection with Omicron
1.3 Acrossafter 3 months – but mRNA boosters can recover effectiveness to ~60-70%

91.4 The impact of COVID-19 waves is a function of the “immunity wall” andThe immunity wall varies by country and region,
given differences in its three main “building blocks”

Type of vaccine
It will define the rate of infections and hospitalization,need for new booster cycle, and preventive measures

mRNA

Viral
vectormRNA-based vaccines show higher
effectiveness against new variants

Vaccination/booster rates

Population vaccinated by 2 doses
and booster, timing of vaccination

Natural immunity

Population infected in previous
wave. Timing of infections – giventhat immunity wanes over time

1. Antigenic drift
Source: BCG research and analyses

Pace of mutation
Faster mutation likely
to require more
frequent boosters

Extent of changes tothe virus’s proteins1
Large shifts may render somevaccines ineffective and require
speedy R&D and deployment

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

progression of the virus

10

1.5

Case study: UK built a strong immunity wall through early booster rollout; theslower booster program in the US has resulted in peak hospitalizations
As of 17 Jan 2022

78%

71%

Received 1st dose

Received 2nd dose

US booster program has been slower,
limiting protection against severe illness

76%

54%

Received 1st dose

Received booster

Daily cases1

People hospitalized2

Daily cases1

200,000(0.3%)

50,000(0.07%)

1,000,000(0.3%)(% of UK population)(% of UK population)

30,000100,000
20,00050,000Relatively low
hospitalizations
vs. daily casesand prior peaks

0

Jan Mar May
2021

Jan Mar May
2021

Jul

Sep

Nov

Jan
2022

Sep

Nov

Jan
2022

Received booster(% of US population)
250,000(0.07%)
200,000

Newhospitalizationpeak

150,000
500,000
100,000
250,000

Jul

24%

People hospitalized2

750,000

10,0000Received 2nd dose(% of US population)

40,000150,000

63%

0
Jan Mar May
2021

50,000
0
Jul

Sep

Nov

Jan
2022

Jan Mar May
2021

1. 7 day average, 2. Number of patients in hospital due to COVID-19;
Note: numbers for vaccinations and boosters represent % of total population (including under 18s); data published 10 Jan 2022. Source: Our World in Data for the US, data.gov.uk for the UK, BCG research hand analyses

Jul

Sep

Nov

Jan
2022

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

UK built a strong immunity wall, reducing
hospital admissions from Omicron

11

Cases expected to peak in January in most regions – followed by sharp declines;
some East Asian countries with peaks in February-March

As of 13 Jan 2022

Credible models differ on their exact projections. A likely medium-term scenario is shown by IHME2Peak in mid Jan – large variability between
nations, with later peaks in Eastern Europe

Peak cases 3 weeks after
first reported infection withsteep decline since thenDaily cases ('000)1
25
20
15

Daily infections
14M
12M
10M
8M
6M
4M
2M
0M

More than 50%of the region will
be infected in the next
6-8 weeks

Peak: 17th Jan- WHO, Health Metrics &Evaluation
Dec

10

Jan

Feb

Mar

Apr

Peak nationally likely reached –but peaks in some states up to mid-Feb
Daily infections
Peak: 7th Jan
6M- Janet Woodcock, FDA

4M
2M

Current projection(as of 13th January)

0M

May

Case peaks in major cities – but highinfections to remain till Feb-March

Peak yet to occur – nation preparing via
stringent containment measures

5
0
Oct

Nov

Dec

Jan

The daily cases [...] will fall
sharply simply because
everybody who could be
infected will be infected- University of Washington

Daily infections

Peak: 19th Mar

500K

Thanks to thetoughest borderrules in G7, we’vebeen able to keep the
spread of Omicron to aminimal level, giving us
time to prepare

400K
300K
200K
100K
0K

Dec

Jan

Feb

Mar

Apr

May

Most people aregoing to get Covid- Prime Minister Kishida

Daily infections
40M

The decline of cases
will be equally sharp.
By March, it willbe almost over

Peak: 14th Jan

30M
20M

- Mahindra Agarwal,
professor at IIT Kanpur

10M
0M

Dec

Jan

Feb

Mar

Apr

May

1. 7 day average; 2. Institute for Health Metrics and Evaluation; projection as of 13th January, using the following assumptions: vaccine distribution stays at expected pace, future mask use is the mean of mask use over the last seven days, mobility increases inproportion with vaccine coverage; 80% of those vaccinated get a third dose at six months in countries where available. Sources: WHO, Our World in Data, IIT, University of Washington, Institute for Health Metrics and Evaluation, Independent, NJ, CNN, CNBC, BCG

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

1.6

12

In the news | Highly transmissible Omicron sets records and causes disruption,
but lower hospitalization signals virus evolution toward endemic

Boris Johnson admits Omicron is
putting NHS under pressure

January 5, 2022

Record Covid cases in US and Europe as
Omicron variant runs rampant

1. Australia Treasurer Josh Frydenberg; Sources: press releases

January 3, 2022

Xi'an lockdown tests limits of China's
zero-Covid policy

January 3, 2022

US, EU factories see easing supply
strains, but Omicron threatens setbacks

December 31, 2021

Israel starts giving fourth COVID-19
vaccine dose to the most vulnerable

December 22, 2021

Risk of hospital stay 40% lower with
Omicron than Delta, UK data suggests

December 30, 2021

South Africa says its Omicron wave has
passed with no big spike in deaths

January 3, 2022

Omicron may provide ‘bridge’ to COVID‘endemic’: Frydenberg1

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

January 3, 202213

2.1 Despite the emergence of new variants, we are better prepared this time

information and resources

Today, we are more knowledgeable
and better equipped

Immunity

Immune-naive global population, vulnerable
to the virus

Populations across the world have some form of
immunity through recovery or vaccination(s)Vaccination

No form of preventive treatment available
for infections globallyFirst generation of vaccines (mRNA, viral vectors)rolled out globally

Therapeutics

Limited therapeutics for infection treatment –early success from immune modulators1

First highly effective oral antiviral, complementing
infusion therapies

Diagnostic
infrastructure

Poor diagnostic infrastructure and testing
capabilities, with overburdened health systems

Multiple testing equipment (e.g., rapid PCR tests) –but some supply constraints during Omicron wave

Information
on virus

Limited information on virus mechanics(e.g., mutations, mode and rate of transmission)

Reliable information on transmission modes andvariants (through improved sequencing)

But we continue to fall behind in ensuring global equity and access to resources for LMICs2
1. Dexamethasone, for example; 2; Low- and middle-income countries; Source: BCG research and analyses

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

Two years ago, we operated with limited14

2.2 Two potential scenarios for 2022 - transition toward endemicity more likely
BULL CASE: TRANSITION TO ENDEMICITY

BEAR CASE: PROLONGED PANDEMIC

Milder variants spread globally (e.g., Omicron - less severe,high transmission), outcompeting more virulent Delta variant

New variants evade immune response from previous waves
and vaccinations – causing long-term health risks in infectedindividuals

More transmissible but milder variant add to population
immunity

Variant evades vaccines and renders therapeutics largely
ineffective, requiring new formulations

Vaccines and therapeutics remain effective

Increasing vaccine inequity globally and likelihood of new,more dangerous3 variants mutating in areas of low immunityand high immunocompromise (e.g., sub-Saharan Africa)

Variant
outlook

Vaccines,
therapeutics,& immunity

SocialimpactCOVID-19 treated as other endemics, e.g., with annual or
biannual booster vaccine (like flu)

Prolonged pandemic as new variants continue to emerge

Nations with strong booster adoption of mRNA vaccines2
return to normal

Increased restrictions used to maintain health system capacity,
but limited results because of higher transmissibility

Nations with poor booster adoption or ineffective vaccines
against new variants witness virus hotspots

Significant economic and social dragCurrent estimate of most likely outcome ( Jan 2022)
1 Built from vaccination regimen and type, boosters, and country's latest wave of infection; 2. And/or high naturally obtained immunity; 3. More transmissible, higher antibody resistance; Source: BCG research and analyses

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Multispeed recovery, divergence based on different immunity walls1

15

2.3

Endemic state: COVID-19 will continue to be present, with normalized infection
rates, localized flare-ups, and limited disruptions to social life
Pandemic:Some immunity

Endemic5

No immunity, no vaccines, exponential growth in
infections, with spikes in cases if uncontrolled

Some immunity and medical advancements(therapeutics, antiviral2). Yet still unpredictablespikes in cases

Consistently present (seasonal) disease withpredictable normalized spread and growth rates

Many hospitalizations and deaths; very strained
health care system – strict “circuit breaker”
measures (e.g., lockdowns) to control spreadMore stable hospitalizations and death rates,
especially in countries with a strong immunity wall.
Better testing, diagnosis, and ICU infrastructure

Fewer COVID-19-related hospitalizations due tohigh immune protection (from vaccines, naturalinfection). No strain on health care system

Quick spread of COVID-19 globally, with continued
outbreaks. Some ability to contain via strict measures(e.g., China, Australia)

Continued outbreaks in most countries – with infections
spreading fast across borders (owing to highertransmissibility variants)

Few occasional localized flare-ups limited to aparticular region4

Varied government responses with different levelof preparedness.1 No/very limited international
cooperation. Poor communication

Archetypes of government responses emerging3.
Improved collaboration, but still significant gaps.
Improving, yet often unclear, messaging

Structured response plan with clear communication.
Strong international collaboration for equitable response

Large-scale social and economic disruption, withlimited predictability

Limited disruptions (mainly in winter), withadjustments made to business activity to adapt

Return to normality: Manageable threats, with nodisruption to social life and economy

Higher transmissibility, lower severity (built immunity)

Continued vigilance required to variant evolution, butseasonal strains unlikely to cause strain on the population

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

Pandemic:
Full vulnerability

1. For example, East Asia’s preparedness as a result of it experience with SARS in 2003; 2. Pfizer's Paxlovid showed almost 90% efficacy in preventing hospitalization and death in high-risk patients (Guardian, 14th Dec 2021). 3. Examples: US/UK – vaccination& boosters, China/Australia – trace & contain. 4. Especially where low vaccination rates; 5. Examples: malaria, chickenpox, typhoid; Source: BCG research and analyses

16

YET, VIRUS IS ALSO EVOLVING
Lower transmissibility, high severity (no immunity)Transition to endemic state is rooted in equitable booster rollout and increased
demand for vaccines – supporting shifts in government intervention and behaviorsContinuous readily available
testing and sequencing

International
collaboration
for quick detection

Fast development and approval ofboosters to tackle variants. Investment in
next-gen vaccines1 and therapeutics

PANDEMIC

Robust rollout plans
with clear communication

Equitable
access globally

ENDEMIC
Behavioral andShift of government intervention
attitudinal shiftswith cases normalization• Reduced track and trace, quarantine(e.g., mental shift toseasonal disease such as flu) • Switch away from reporting dailycases (to patients in ICUs, deaths)

Higher demand for vaccines:• Reduced vaccine hesitancy(e.g., community education)• Vaccine incentives/mandates

Speed of shift to endemic also depends on: immune escape due to mutating virus, waning immunity (e.g., against severe illness)
1. Pan COVID-19 vaccination applicable to all variants, intranasal vaccines, etc. Sources: The Atlantic, Healthline, Wall Street Journal, Nature, BCG research and analyses

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

3.1

17

3.2

Public sector: Prepare for emerging new variants and support global equity
while positioning for endemic
Deal with emerging new variants
INFRASTRUCTURE
1 IMPROVE
Support capacity unlock & delivery

APPROVALS
2 ACCELERATE
Establish accelerated regulatory approvals forinfrastructure at scale. Invest in
sequencing for variant identification.

upcoming modified vaccines and boosters

TARGETED MITIGATION
3 USE
Keep mitigation measures on (e.g., masks,

distancing) to allow ramp-up, especially for theunvaccinatedPosition for endemic
Enable medical
developments
Increase
adoption
Normalize
response

ANTIVIRALS
4 ENABLE
Work to make treatments more economical . Invest in diagnostics to ensure

AND PIONEER R&D
5 SUPPORT
Fund ongoing R&D efforts (high ROI). Invest in pan-COVID-19 vaccine

UPDATED EDUCATION
6 PROVIDE
Provide ongoing communication of booster's importance, keep statistics in

VACCINES AS POSSIBLE
7 MANDATE
Explore societal sentiment, work with companies, venues, etc., to devise

PROACTIVE RAPID RESPONSE PLAN
8 BUILD
Leverage predictive analytics based on global data to project scenarios and

CLEARLY AND IN TIME
9 COMMUNICATE
Provide clarity around and stick to roadmap, including targets, thresholds,

1

vulnerable population gets antivirals on time2

perspective but go beyond them (e.g., personal stories)

prepare response plan for each one. Set and follow thresholds for intervention

research (across variants)

realistic mandate plans. Clearly define mandates (e.g., 2 doses, boosters)

and response plan. Explain rationale. Address (social media) disinformation3.

Support equitable access globally and minimize resurgence of new variants
Collaborate
across borders

VACCINES
10 DONATE
Support COVAX, collaborate withother nations to drive global donation
to low- to middle-income countries

DISTRIBUTION
11 SUPPORTBuild/improve infrastructure for delivery andadministering of tests, vaccines, and therapeutics.
Work on broader legal and regulatory issues.

AND COLLABORATE
12 SHARE
Continue global sharing of info and resources.

Create formal frameworks for collaboration. Buildout monitoring of variants for rapid identification

1. Currently antivirals in the US around $700 vs. $30 for vaccine; 2. 3- to 5-day window to prevent health risks e.g., lung scarring; 3. Unless new thresholds reached; Source: BCG research and analyses

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

Facilitate
speed at scale

18

3.3

Private sector: Localize COVID-19 requirements, support easy diagnosis
and access, and build flexibility in your operating model

Deploy clear localized
requirements

Support easy diagnosis
and access

Build flexibility
in working model

Depending on jurisdiction:

Provide onsite testing kits, vaccinations,and antiviral drugs (when available) at
no/sponsored cost

Co-create hybrid working models with
employees. Offer flexibility, especially tothose more vulnerable to the virus

Support access to boosters and antiviraldrugs (when available), especially ingeographic areas where there are shortages
and additional costs for employees

Communicate direction and rationale
early on

Clearly define mandate for vaccines,
and what “vaccinated” means (2 doses,
booster timing requirements, etc.)
Educate and incentivize vaccination:
share scientific evidence, restrict travel andevents without vaccine, etc.
Require testing to come to the office,join corporate events and workshops, etc.
Follow government recommendations onsocial distancing, face coverings, etc.
Clearly communicate any company policies
in addition to those by the government
Source: BCG research and analyses

Scale own virus monitoring and reporting
systems (e.g., employees self-flagging
interactions, room-booking flags)

Launch channel for voicing (anonymous)
feedback and concerns
Ensure readiness: Factor in work locationpreferences and increased sick leave in work
allocation and capacity planning

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As countries diverge on their path to endemic, companies should:

19

BCG Executive
Perspectives
AGENDA
Our Dec 2021 Executives
Perspectives edition
focused on early insights
into the Omicron variant

Latest developments on Omicron
Scenarios for 2022 and potential move to endemic COVID-19
Implications for public and private sector leaders

UPDATED ANALYSES AND IMPACT
COVID-19 economic and business impact

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

COVID-19 | UPDATES AND FUTURE SCENARIOS

20

Summary dashboard
As of 17 Jan 2022

Epidemic Progression

Consumer Activity

Business Impact

Global epidemic snapshot

Mobility

Stock market performance

329M
# of
cases

Month-onmonth
growth of
new cases2

56M

5.6M

# of
active cases1# offatalities
Oct

Nov

Dec

Americas

0.9x

0.6x

1.0x

2.2x

Europe

1.0x

1.4x

1.7x

1.5x

Asia3

0.7x

0.6x

0.8x

0.9x

GDP forecasts (YoY%)

Eurozone
US
Japan
China
India

Vaccine doses
administered

Sep

Economic Impact
2022

9.7B

0 2

4 6
4.2%

5
WorldBank4 (Jan'22) Banks

8 10 12 14 16 18 20

3.7%
2.9%
5.1%
8.7%

Oct

Nov

Dec

US

-12% -11%

-12%

-13%

Europe

-2%

-5%

-7%

Japan

-14%

-8%

-6%

Sep
Mobility6(month vs.
Jan '20)

Domestic air
travel tickets
booking7,8 (YoY)

US

72%

81%

90%

UK

116% 133%

76%

China

-9%

-35%

-9%

Sales
Retailgoods sales9(excl. auto &
fuel, YoY)

US

13%

15%

Europe10

3%

2%

7%

China11

7%

6%

7%

Passenger
vehiclesales12(YoY)

US-25% -22%-15%

Germany-26% -35%

-32%

China

-17%

-6%

-6%

02 Jan '20 vs Month end

Sep

Oct

Nov

Dec

S&P500

32%

41%

40%

46%

-10%

FTSE100

-7%

-5%

-7%

-3%

-5%

CHN SSE

16%

15%

16%

18%

Volatility Index (S&P500)13

1.9x

1.3x

2.2x

1.4x

US

18%

18%

23%

France

12%

9%

China

23%

24%

26%

US

61

58

58

58

Germany

58

58

57

57

China

50

49

50

50

Steel production (YoY)16-9%-11% -10%

International trade
Trade value14(YoY)

Industrial production
Purchasing
manager’s
index15(base = 50)

1. Total cases less deaths and recovery; 2. Calculated as monthly average of daily cases vs. previous month; 3. Includes Middle East and Oceania; 4. World Bank Jan 2022 forecast; 5. For India, forecast is for financial year; for others, it is for calendar year; YoY forecasts; range from forecasts (where available) of World Bank, International
Monetary Fund, JP Morgan Chase; Morgan Stanley; Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; as of reports dated Sep and Oct 2021; 6. Mobility values are calculated as the average of mean monthly mobilities in workplace, public transit, retail and recreation, and grocery and pharmacy and comparedwith a baseline from 03 Jan – 06 Feb 2020; Europe mobility values are calculated as the average of Germany, France, UK, Spain, and Italy; 7. Calculated as change in last 14 days rolling average value as compared with same period last year; 8. Domestic tickets by ticketing; 9. Retail goods sales include online and offline sales and comprisefood and beverages, apparel, cosmetics and personal care, home appliances, general merchandise, building material; do not include auto, fuel, and food services; 10. Europe includes 27 countries currently in EU; 11. For China, total retail sales displayed (including automobiles and petroleum and related products) and compares 2021 to2019. 12. Figures represent passenger vehicle (including sedan, hatchback, SUV, MPV, van and pickup) sales data for over same month in previous year; Europe value calculated as cumulative sales in Germany, France, UK, Spain, and Italy; 13. Underlying data is from Chicago Board Options Exchange Volatility Index (VIX); Volatility Index is areal-time market index that represents the market's expectation of 30-day forward-looking volatility and provides a measure of market risk and investors' sentiments; 14. Calculated as sum of imports and exports, measured in USD and compared with previous year period; EU trade values between EU and all outside countries 15. PMI(Purchasing Manager's Index) is a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding (>50), staying the same (50), or contracting (<50); 16. Data corresponds to G-20 countries (minus Indonesia). Sources: JHU CSSE, Our World in Data, WHO, World Bank, IMF, Bloomberg, Google
Mobility, US Census Bureau, Eurostat, PRC National Bureau of Statistics, ACEA actuals, Marklines, ARC ticketing data, STR, Statista, CBOE, OECD, BEA, GACC (customs) China, ONS, BCG.

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

To be updated in forthcoming editions

21

As of 11 Jan 2022

Many large economies expected to continue recovery and surpass 2019 GDP
levels in 2022
GDP forecast levels indexed to 2019 value (base: 100)
China

Europe

116
112

111.3
110.5
110.4
108.5

110.9

108
104
100
96

107.7
105.8
102.4
102.0
101.0

103.1

108.5

2022 forecast
vs. 2019

116.7
116.0

114.6

116.5
114.4

111.8
110.1
109.1

103.5
102.6

104.8
102.6

105.0

104.9
102.3

102.2

101.0
98.1
97.7
97.1
96.7

98.5
98.4
97.9

100.8
99.9
98.3

102.4
101.5
100.4
99.6

101.1
98.9

95.4
93.6

92
88

126.4
122.1

India1

106.6

104.6

96.6

118.7

Japan

92.7

2019 2020 2021 2022 2023

2019 2020 2021 2022 2023

2019 2020 2021 2022 2023

103-107%101-104%

111-119%2019 GDP levels (index)

2020 Actual

Forecast IMF (Oct 2021)

2019 2020 2021 2022 2023 2019 2020 2021 2022 2023

98-102%
Forecast World Bank (Jan 2022)

105-114%
Forecast range from leading banks2

1. For India, forecast is for financial year; for other countries, the forecast is for calendar year; unavailable data for 2023 from most resources apart from World Bank; 2. Range from forecasts (where available) of JPMorgan Chase;
Morgan Stanley; Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC. Note: IMF issues report on 20th January 2022, hence not included in the above; YoY forecasted 2020 values are estimated actual
GDP. Sources: Bloomberg; World Bank; IMF; BCG

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

US22As of 11 Jan 2022

Mobility | Mobility declined in December 2021 – driven by Omicron wave andnew restrictions; variations will continue based on mitigation measures

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

Oct
21

Dec
21

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

Oct
21

Dec
21

Japan

Feb
20

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

Oct
21

Dec
21

SwedenGermany

Feb
20

Feb
20

Feb
20

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

Oct
21

Dec
21

Australia

May
20

Aug
20

Oct
20

Jan
21

Workplace mobility1
Public transit mobility2
Retail and recreation mobility 3

Apr
21

Jul
21

Oct
21

Dec
21

Lockdown easing4

Feb
20

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

Oct
21

Dec
21

Mobility impact will continue
to vary by region based on COVID-19
mitigation measures and restrictions
Retail and recreation mobility
had rebounded across most
locations prior to the Omicron wave
in December. Likely continued
temporary disruptions in someregions, but positive trend expected
to return
Workplace and public transit
mobility will be impacted basedon local outbreaks. Potential for
structural impact from COVID-19 topersist as hybrid-work and workingfrom-home models persist

Lockdown started4

1. Tracked as changes in visits to workplaces. 2. Tracked as changes in visits to public transport hubs, such as underground, bus and train stations. 3. Tracked as changes for restaurants, cafés, shopping centers, theme parks, museums, libraries, and cinemas. 4. Refers to average
lockdown start and easing dates for larger lockdowns. Note: Data taken as weekly average compared with baseline (average of all daily values of respective weeks during Feb 15 2020–Feb 28 2021). Sources: Google LLC “Google COVID-19 Community Mobility Reports.”
https://www.google.com/covid19/mobility/; press search; BCG.

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

Feb20

Impact

Italy

US

23

As of 11 Jan 2022

Retail | Rebound across most countries and categories expected to continue,
but inflationary pressures likely to slow retail spending in 2022

Food and beverage stores

Personal care and cosmetics stores
Apr '21 May '21 Jun '21 Jul '21 Aug'21 Sep'21 Oct '21 Nov'21

Apr '21 May '21 Jun '21 Jul '21 Aug'21 Sep'21 Oct '21 Nov'21
US

15%

16%

16%

14%

17%

18%

19%

UK

10%

4%

8%

3%

2%

2%

2%

Spain

0%

-3%

-1%

0%

-3%

-1%

Sweden

0%

5%

6%

3%

4%

France

8%

8%

5%

7%

China1

20%

18%

23%

Japan

-2%

0%

1%

US

14%

15%

14%

14%

15%

14%

11%

3%

UK2

-6%

-7%

-7%

-19%

-16%

-10%

-4%

-9%

1%

1%

Spain

1%

-1%

2%

1%

1%

0%

1%

6%

5%

4%

5%

Sweden

4%

10%

13%

10%

11%

12%

9%

10%

7%

9%

8%

8%

France

7%

10%

15%

24%

15%

20%

17%

15%

11%

15%

15%

21%

China1

30%

36%

43%

18%

27%

24%

32%

2%

-1%

2%

5%

Japan

42%

38%

46%

42%

43%

32%

47%

Apparel stores3

Home appliance stores4
Apr '21 May '21 Jun '21 Jul '21 Aug'21 Sep'21 Oct '21 Nov'21

Apr '21 May '21 Jun '21 Jul '21 Aug'21 Sep'21 Oct '21 Nov'21
US

13%

8%

14%

11%

7%

7%

13%

3%

UK

30%

30%

19%

12%

13%

-2%

12%

2%

-5%

-5%

Spain

7%

17%

10%

8%

9%

10%

8%

10%

-17%

-9%

-4%

Sweden

18%

27%

22%

18%

16%

16%

15%

15%

-7%

-5%

-2%

France

4%

11%

22%

10%

11%

12%

13%

1%

-5%

0%

6%

China1

-7%

3%

15%

4%

-1%

1%

8%

9%

-22%

-33%

-28%

-12%

Japan

5%

11%

1%

11%

-15%

-36%

43%

18%

US

10%

13%

18%

14%

15%

17%

18%

UK

-5%

-2%

-6%

-11%

-8%

-7%

-1%

Spain

-23%

-21%

-14%

-19%

-17%

-11%

Sweden -27%
France -63%

-15%

-11%

-14%

-11%

-17%

-3%

-8%

China1

3%

8%

8%

Japan

-30%

-29%

-23%

≤ -30%

73%-29% to -15%

-14% to 0%

> 0%

4%

To be updated in forthcoming editions

Across categories and countries, retailstore sales have continued
to rebound compared with theearlier months of the pandemic
Across majority of categories,
store sales returned or evensurpassing pre-pandemic sales
Apparel store sales are lower
compared with 2019 levels everywhereapart from the US and China. But
there are signs of recovery (e.g.,, UK)
In 2022, retail sales are expected tocontinue their rebound; however,increasing inflationary pressure
might hinder expected growth
The pandemic accelerated shift toe-commerce – consumer behavior we
expect to stick in 2022 and onward

1. For China, Jan and Feb 2021 are reported together due to national holidays; food and beverages category includes only food and grains; 2. UK data set switched over from Eurostat to Office for National Statistics following Brexit. 3. Includes clothing accessories, shoes, etc. 4. Includes audio
video and home appliances stores. Note: For US, share in retail store sales in Q4 2019: F&B ~25%, personal care and cosmetics ~12%, apparel ~6%, home appliances ~3%, general merchandising ~25%, and building material and gardening equipment ~13%. Sector classification and mix may bedifferent across countries. Sources: US Census Bureau; PRC National Bureau of Statistics; Eurostat; Office for National Statistics United Kingdom; Ministry of Economy Japan.

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

ImpactRetail store sales breakdown by category, % change vs. same month in 201924

Manufacturing | Positive momentum with signs of slowdown in Q4 2021;
supply disruptions might restrict output in certain industries in 2022

As of 11 Jan 2022

ImpactManufacturing PMI
US
11 12 127 7 9 9 9
3
3
3
1

8 8 8

0

Neutrallevel = 50

-10

Dec

Oct

Nov

Sep
Sep

Jul

Aug

15 14 13 12

Aug

Jun

Apr

May

Mar

Jan

Feb

Dec

Oct

Nov

Sep

Jul

Aug

Jun

Apr

10

19 16

15 15

Jun

15 13 12 14

-2
Dec

Nov

Oct

Jul

May

Mar

Feb

Jan

Dec

Nov

Oct

Apr

Sep

-13

Japan

9 10

-10
Aug

-5

6
2 4

Neutrallevel = 50

Jul

8 8 7 7

Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

-16 -1311
6 8 8 8 7

13

Jun

1 2

17 16 14 15 16

Apr

SwedenNeutrallevel = 50

China1-29 to -15-14 to 0

>0

2 2

1

2
1

1 1 1

0 0

0 0

Lockdown started

Lockdown easing

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Feb

Mar

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

0 -1
Apr

Neutrallevel = 50

0

Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
July
Aug
Sep
Oct
Nov
Dec

-8
-10
-12

-5

-3 -2 -1 -1

2 1
1 1 1 1 1

May

5 4
4 3 2 3 3
2 3
1 3

0

≤ -30

-5 -3

May

Germany

Neutrallevel = 50

12 12 10 11 10 11 13 12

-19

Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

-14

7 10 112 3 3 4 2 3 5May

Neutrallevel = 50

13 11 11

Manufacturing reboundedstrongly in 2021 (especially in the
US and Europe) and this trend
expected to continue
As restrictions ease after Omicron
wave, consumer demand willcontinue to rise (yet more
moderately given inflationarypressures), which will increasepressure on manufacturing
But supply chain bottlenecks,
labor shortages, and short-term
workforce impact from new COVID19 waves2 could restrict total output
in 2022, and thus need to be closely
managed1. Lockdown dates are pertaining only to Hubei province. 2. Requirements to self-isolate if test positive for COVID or if pinged as someone who has been in contact with COVID-infected individual. Note: PMI (Purchasing Manager’s Index) is a diffusion index that summarizes whether
market conditions, as viewed by purchasing managers, are expanding, staying the same, or contracting. 50 is neutral, >50 is considered to be positive sentiment, and <50 is considered to be negative sentiment. Sources: Markit South Korea Manufacturing PMI SA; Jibun Bank Japan
Manufacturing PMI SA; China Manufacturing PMI SA; Swedbank Sweden PMI SA; Markit/BME Germany Manufacturing PMI SA; Markit Italy Manufacturing PMI SA; Markit US Manufacturing PMI SA; EIKON.

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

Italy

25

Passenger vehicle sales | Supply chain bottlenecks will continue to limit
performance in 2022, with likely 2023 spillover
Impact2021 monthly passenger vehicle1 sales, % change vs. same month in 2019

-12%

Nov

-33% -30%
Oct

Jun

May

Apr

Sep

-25% -24% -24%

-26%

Aug

-15%

Jul

-11%

Mar

-18% -18%
Feb-20% -21% -27%
Nov

Aug

Jul

Jun

May

Apr

Mar

Feb

Jan

-34%

Oct

-14% -7%Sep

0%-2% -5% -1%

Supply constraints expected tocontinue in 2022, with some easingover time

SwedenGermany

63%-14% to 0%

Nov-33% -32%
Oct

Sep

Aug

4%

5%

Nov

Sep

-7% -8%
Oct

Jul

-3%

Aug

May

-6%
Apr

Mar

Jan

Nov

Feb

-5% -4%
Oct

Jun

May

2%

-15%
Sep

-9%

-16%

10% 8%

Jul

-1%

Aug

May

-29% to -15%

3%-30% -37%

Jun

2%

Apr

-31% -25%
MarFeb-2% -2%
Jan

Nov

Oct

Sep

-38%
Aug

Jul

Jun

-37% -34%

3%
-8%

Apr

Mar

Feb

Jan

-19%

China2-7% -4%≤ -30%

-29%

Jul

7%

1%

-16%

Jun

Japan

-26% -31%
May

Mar

Feb

Jan

-36%

-28%

Apr

-15%

8%

> 0%

1. Passenger vehicle sales include data on, where available, hatchback, MPV, pickup, sedan, SUV, mini trucks, light trucks, and vans. 2. Stimulus policies: Launched subsidies for car purchases in 10
cities, lessened purchase restriction in high-tier cities, and extended NEV subsidies; Sources: Marklines; BCG.

Main bottlenecks insemiconductors: demand likely tocontinue to outstrip supply by ~10%
in 2022
Sales volumes expected to improve
but will remain lower than expecteddemand in 2022 and 2023
We will continue to see greater
penetration of electric and zeroemission vehicles as cost parity
achieved (further propped up by
increase in oil and gas prices)
Critical to focus on resolving supply
shortages by building supply chain
resilience, capabilities to absorb
disruptions and recover quickly(e.g., dual sourcing, flexible contracts)

Copyright © 2022 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 January 2022 Version 2.0

Italy

14%

Jan

US

As of 11 Jan 2022

26

Disclaimer

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BCG Executive Perspectives updated 17 January 2022 Version 2.0

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27