The Coronavirus, also called COVID-19, has taken the world by storm after springing up as a relative unknown disease in East Asia. As of March 23, 2020, the virus has infected more than 300,000 people in at least 195 countries, according to the World Health Organization, and more than 14,510 people have died.
While some areas have been harder hit than others so far, what is certain is that COVID-19 will reshape the business landscape in much the same way as other international concerns, like wars and recessions, have done in the past. How businesses handle this paradigm shift will determine whether they continue to succeed in the future.
COVID-19 Trends
One of the primary trends that businesses have seen so far is a sudden undercutting of profits and revenues. This has led to a series of decisions that few companies want to make, such as reducing hours, changing work locations, or even laying off employees. Fewer employees often means decreased expenses, but it also translates to less earning opportunities with fewer touchpoints between clients and the company. Reduced hours have the same effect, tightening the window in which a company can generate revenue. All of these factors come together to test business resilience during the coronavirus outbreak.
Manufacturing businesses, alongside the service sector, have been some of the hardest hit. Potential consumers are having a hard time trusting materials and products that are coming from anywhere but their local community, fearing that such purchases might expose them to coronavirus. This fear has caused a deep dip in manufacturing revenue that is not expected to resolve in the near term. Factory activity shrunk in February, coming in at a record low 40.3 on the Caixin/Markit Manufacturing Purchasing Managers’ Index. The service sector saw a drop down to 26.5, the first below-50 score in more than 15 years.
Similarly, employees are left dealing with fear and anxiety about their situation. With layoffs sweeping the globe, job security has become one of their primary concerns. Employees may be laid off due to the cost required to keep them, or they may lose their jobs if they have no sick time or vacation days to use and don’t show up to work. This uncertainty has prompted widespread fear that people are coming into work even while sick, further accelerating the pandemic. Many employees fear contact with customers and staff, as every person-to-person interaction offers another chance at exposure.
World Economics Going Forward
As coronavirus continues to spread across borders, and the number of infected rises, the economic landscape of the entire globe is expected to experience a substantial shift. Some of this shift can already be felt in the plummeting stock market. Historically, similar outbreaks have led to labor scarcity and the introduction of new markets; businesses must be prepared to wade through this changing landscape and seize opportunities in new niches.
China's influence has become painstakingly obvious throughout this crisis. With more than 80,000 cases in COVID-19's origin country alone, China is the epicenter of this global epidemic. It is now clear just how much the rest of the world relies on the manufacturing power of China, and a decoupling of other countries from this Asian powerhouse seems inevitable. Chinese manufacturing is the backbone on which many business sectors are built, and coronavirus may prompt a change in this way of doing business.
Politics have also seen—and will likely continue to see—shifts as coronavirus spreads. Most countries have called for tightening of borders, and this geopolitical transformation may affect businesses that rely on foreign workers and products or parts. Italy, Iran, and Korea have reported in excess of 8,500 cases, and many European countries have now passed the 1,000-case mark.
Fighting the Virus
How can businesses keep their revenue and growth strong during this global pandemic? One of the most obvious and critical answers is to reduce in-person contact.
Non-essential (and arguably even “essential”) travel should be brought to a minimum or avoided completely; this includes not only vacations but also business meetings and company outings. Given the widespread nature of coronavirus, it’s likely that most people will understand the transitioning to a phone call or Skype chat instead of an in-person meeting.
This lack of personal contact extends to employees as well. The coronavirus outbreak has ushered in the age of the remote worker, and companies around the world have been experimenting with letting employees work from home to reduce exposure risk, both to themselves and others.
For employees who have no option to work remotely, like construction workers and other labor occupations, businesses can stand with their employees in ensuring a safer work environment. This might include providing readily available hand sanitizer, coronavirus-grade face masks, medical gloves, and a closed-door policy where interactions are done via email when possible.
This is also a time when AI (Artificial Intelligence) is flourishing as one of the best options to keep businesses on their feet. Needless to say, artificial intelligence can’t catch the coronavirus, nor can it pass it on to others. Businesses that have a solid AI presence are going to have the upper hand during this economic downturn compared to those that rely solely on the human factor.
Input from the Business Community
Many business owners, especially of small and mid-sized companies, have come forward about the primary concerns and pain points they are facing amid this global coronavirus burden. These smaller businesses are finding the current climate challenging, but they also provide a great example of opportunities to improve efficiency and cope with the coronavirus issue.