Unless you’ve been living under two rocks, you will have noticed that the world is quite preoccupied these days. Many things that we held as incredibly important just a couple of months ago have now taken a back seat as the world battles this pandemic and braces itself for what is yet to come. In these tumultuous and often bewildering times, life on our entire planet has been subjected to quite a bit of uncertainty. Humanity has been through pandemics before – some of them way worse than coronavirus – but the world has changed since our last such experience.
Nowadays, it is an intimately interconnected world where trade and business often take precedent over most other things, even politics. Since the world and its economy have become so trade-oriented, having to significantly reduce or suspend many of the adjacent activities has been a major, drastic change for us. Needless to say, business worldwide has been profoundly impacted, with the possibility that the worst of it is yet to come. While the world economy as a whole is bound to be affected, there are some businesses and industries that are particularly vulnerable to these extraordinary conditions.
Right off the bat, the important thing to note is that impact doesn’t necessarily have to be negative for all businesses. Indeed, there are some sectors of businesses that might see a significant spike in revenue. The manufacture of various pharmaceuticals, disinfectants, and protective equipment like masks and gloves are the more obvious examples where the impact is generally positive. Certainly, in times of pandemic, most governments in the world will take measures to prevent the inflating of prices on these crucial products. This means that the forces of the market will be restrained from maximizing the profits, but these products will still sell much more than they usually do, so revenue is bound to increase.
On the other hand, there are many businesses that will suffer. The decrease in demand for certain goods and services certainly plays a part, but it has other implications. Being forced to close and being unable to work at all is the real problem for many small businesses. This also means that many workers will lose their jobs. Measures will certainly be taken to mitigate these problems, but the economy as a whole will inevitably suffer, and some of the consequences might be unforeseeable. This is particularly because we still can’t know to a certainty how the pandemic will progress and if the world’s containment efforts will work.
That’s not to say we’re going into this whole thing blind – far from it. Major impacts are already being felt, and we do have an idea of how businesses and industries will continue to perform. In this article, we’ll take a quick look at a few of the sectors that will be affected the most, taking into account both positive and negative consequences.
Communication is always at the center of attention amid any large-scale crisis, but especially so during a pandemic that forces people into quarantine and self-isolation. Since telecommunications are so crucial at this time, service providers have had to put in an added effort to ensure that everything is running smoothly. On top of that, such an increase in communication can put a strain on networks, leading to more need for maintenance.
On the positive side for certain sectors, this situation has been increasing the appeal of 5G technology. 5G has long been hailed as the next big leap in network speeds and ease of communication, but adoption has been somewhat slow and has been met with a fair amount of resistance in some parts of the world. Various theories and allegations as to the health concerns associated with such strong signals have led to these concerns.
However, the ongoing pandemic has managed to sway many people, as well as bolster development efforts. In fact, 5G’s usefulness would go far beyond online chatting and messaging between regular people in self-isolation. 5G actually has a lot of potential to greatly assist the efforts to combat the pandemic, since the new standard allows hospitals and other crucial institutions to communicate more effectively.
Remote consultations, exchange of information and knowledge, and even remote diagnoses are all made so much easier with 5G. Simply put, effective and rapid communication between hospitals can greatly alleviate the strain that personnel shortages can put on the healthcare system. The same applies to management and conferencing in all sorts of companies that would otherwise suffer because of quarantine.
Of course, in times of quarantine, self-isolation, and a reduction in travel or work, the consumption of all sorts of digital media is likely to explode. As long as the infrastructure is functioning properly, social networks and video-streaming services will see much more use and thus significant growth. These are things that people will turn to for communication, information gathering, and entertainment.
Not only will Netflix, Amazon Prime, and Hulu get more traffic from their usual audience, but it’s entirely likely that the pandemic will drive new consumers to subscribe to these services. People who couldn’t find the time to watch TV shows and movies otherwise because of their busy schedules might suddenly find themselves stuck at home, with an excess of free time.
All of this will also have an effect on advertising. Estimates have already been given by surveyors, showing us that the pre-pandemic projections about ad spending in 2020 have been reduced. People’s greater consumption of digital media means that ads will reach more of them, which is one of the reasons why ad spending will be reduced. Another reason is that disruptions in supply and manufacture will essentially make intense marketing campaigns less profitable.
Some content is also likely to change somewhat in the nature of its format. Livestreams of important events like conferences are now much more important, as these events now have to shift to the digital arena in many cases entirely.
In the broadest terms, there are many ways in which technology can and has been affected by this pandemic. When it comes to tech development, however, one immediate problem is that important technology conferences have been canceled, along with all other gatherings. As you may or may not know, tech conferences are much more than a way to show the world a few cool, new gizmos. These conferences are events where ideas are sold and where partnerships are formed. In the tech world, missed opportunities to form partnerships, share ideas, or secure funding are often the decisive factor in whether an idea will go on to change the world or be chucked into the dustbin.
This year’s Mobile World Congress, for instance, was supposed to occur between February 24 and 27 in Barcelona, but it has been canceled because Spain is one of the pandemic hotspots in Europe, with the situation rapidly deteriorating. This has set many important projects back or has put them on hold indefinitely. Facebook, Google, IBM, and other tech giants have had to cancel their events or at least relegate them to online live streams. Such was the case with IBM’s developer’s conference, which is an event that had more than 30,000 participants last year.
According to estimates given by Recode and PredictHQ, just these event cancellations alone have caused over $1 billion in losses. This has been the case with live streams and other measures to mitigate the damage, but the pandemic is likely yet to show its worst, in which case the effects will get worse.
Commerce and E-Commerce
Needless to say, one of the first points of impact has been in chains of supply. For instance, this had occurred in China, while COVID-19 was still just a local epidemic. The spread of the virus in its region of origin and its surroundings was so fast and so intense that quarantine measures soon had to be enforced. Staying indoors and shutting things down was no longer a matter of recommendation, but of necessity at the risk of drastic legal repercussions. Soon enough, factories started to shut down, and when factories and plants in China shut down or reduce productivity, the whole world feels it. Tech giants like Apple were no exception, seeing as China is a major manufacturing base for tech.
While much of commerce nowadays is done over the Internet, that share is only going to increase now, making e-commerce boom. Seeing as many people in the world are advised or outright forced to avoid physical stores or going outside all together, they are likely to even start buying groceries online. New surveys are constantly being done in the consumer market amid this pandemic, and it has been found that almost three-quarters of Internet users in the US are planning to avoid bigger shopping centers as the outbreak gets worse. Over half have reported that they intend to avoid any shop or store altogether.
This shift to e-commerce will also lead to a further increase in cashless transactions, and it will send much more business toward delivery services. Whether or not they will be able to handle the spike in business and make it work for them remains to be seen, especially if further limitations to movement are imposed by authorities.
In many instances throughout the world, banks are being forced to close their branches, reduce visits by clients, or cut work hours. There are often legal measures in place that order banks (and other similar businesses) to only let in a certain low number of people at a time. All of this has slowed down the conduct of business in person and has highlighted the importance of digital solutions and e-banking.
More importantly, a whole range of economic measures and spontaneous effects in central banks and on the government level will affect banks in many ways. The interest rates in savings accounts could suffer due to cuts made by central banks throughout the world. Of course, this is detrimental to the clients, but it also hurts the banks because they are less likely to acquire new clients when they can’t offer attractive interest rates.
Sudden layoffs and losses or reductions in income for many people can lead to more folks seeking smaller, short-term loans from the banks. Around half of all jobs in America require the employees to be fully physically present at all times in order to do their work, so these are incompatible with the much-needed measure of self-isolation. Many such jobs might be lost or at least suspended for a time, which will create a need for temporary financial solutions, especially for those folks who live from one paycheck to the next.
All parts of the economy are interconnected, and drastic changes in one will always lead to a ripple effect through other parts. While healthcare isn’t necessarily considered a part of the economy, the many businesses and industries associated with it will be drastically affected by the pandemic. As is often the case, some effects will be positive and others negative.
The effects on healthcare as a whole won’t be just from the direct impact of COVID-19 patients. The biggest danger in the event of a massive outbreak is that the healthcare system will become too stressed or crash completely, making it very difficult for patients to get the necessary medical services that they need regardless of the pandemic.
The world’s healthcare systems are likely to rely much more on things like telemedicine. Regular patients, especially those whose lives aren’t in jeopardy, are already being encouraged to seek medical advice and care from home, and telemedicine providers are stepping in to provide that service. Some of these companies are getting around 40% more appointments than they did back in December. In the US, that increase tends to be only around 10% during regular flu seasons.
This sort of virtual care, so to speak, will likely become more familiar to the people during this pandemic, which might lead to a permanent-growth of this sector as more folks learn that their medical needs can be met from the comfort of their home as long as the situation isn’t urgent.
There are many other more obvious businesses that might experience a substantial boom in the coming months. These are mostly manufacturers of regular medical equipment, but also companies that are developing new, state-of-the-art technologies. Medicine is receiving much more attention now, so there are likely to be more partnerships, incentives, grants, and an overall greater drive toward innovation.