How COVID-19 is Impacting Global Industry
Over the past few weeks it has become increasingly clear to people, all over the world, that the impacts of the COVID-19 pandemic are going to be significantly deeper, farther-reaching and longer than most of us could have imagined even as the Coronavirus began leaping from China to Europe.
As people begin practicing stricter measures of social distancing and self-isolation, disruption to daily life is inevitable. Such disruptions are having a massive impact on the global economy and the average person’s checkbook alike. While it’s difficult to imagine at first glance any business sector that won’t face some measure of hardship, it’s certain that some will be more severely impacted than others.
Below I highlight a few of the disruptions predicted in specific industries, as well as thoughts on industries in which businesses are positioned to experience growth despite the difficult times ahead.
Industries that will face the greatest levels of pain
These industries are at the top of the list of those that will suffer the greatest levels of disruption during the COVID-19 crisis.
Travel and Hospitality – Disruptions to the travel and hospitality industry have been spectacular with more than 15% of flights being cancelled, the flights that are taking off are relatively empty, hotels are being shuttered and the industry best practice has become one of refunding the previously non-refundable booking, essentially piling loss upon loss. International air travel is grinding to a near complete halt, and increasingly governments are advising citizens to avoid all non-essential travel. Some municipalities are even beginning to put entire urban areas on “lockdown”. These measures will have devastating effects on the travel industry, and though lockdowns and restrictions may only last for a relatively short period of time, nervous consumers may be reluctant to travel even long after the worst of the pandemic is behind us.
Consumer electronics – China, the epicenter of the COVID-19 outbreak and one of the hardest-hit nations thus far, also happens to be the epicenter of consumer electronics manufacturing. Supply chain disruption is inevitable and new product launches will also likely be delayed. The industry will also see slumping sales due to more cautious consumer spending.
Aerospace – The aerospace industry will be hit extremely hard as a result in a near stoppage of tourism & business travel flights. Boeing was already losing orders due to the technology issue with the 737 MAX and now Boeing and Airbus have failed to get any orders for new aircraft in February, 2020 implying Covid-19 is to blame. With the spread of Covid-19 to Pandemic levels, I don’t anticipate March 2020 being any better than February. The supply chain is also being disrupted, which in turn impacts the manufacturing rate should demand eventually return.
Minimally impacted industries and areas of growth
For some industries the impact of the pandemic will be much lower and, in some cases, may even increase demand for services and goods.
Healthcare – Demand for healthcare services is, quite naturally, going to be at near all-time highs during the COVID-19 outbreak. As systems try to limit the number of non-critical patients in hospitals, we anticipate a tremendous demand for online services to fill the gap in critical care. For example those companies who are able to rapidly deploy online solutions to provide Application based medicine to non-ER patients via online consulting services will fill a major gap for patients, ease the burdens of the local hospital ER and create a way to earn fee revenue and lifetime loyalty from a happy patient.
Pharma – Though there may be some supply chain disruption to pharmaceutical ingredients manufactured in China, there will also be opportunities in the pharma industry. Pharma companies with a focus on drug development have already become more active, with vaccine and new drug discovery efforts as an enhanced are of focus.
Enterprise software – With huge percentages of the workforce being ordered to work remotely, businesses will need to rely more than ever on software solutions to empower their workers to remain productive and work securely while offices are closed. Collaboration tools and cloud apps will be essential in a changing work landscape that will involve unprecedented levels of remote work which could last for months to come. Even after the worst of the outbreak has passed, the experience of COVID-19 may spur businesses to onboard more systems proactively as they plan for threats in the future.
Closing thoughts
COVID-19 is a global health crisis without precedent in modern times. The impact on human life has been dramatic and devastating with the pandemic in its early state. From a business perspective, industries will be impacted by global economic issues, supply chain issues, workforce disruptions, and changing consumer sentiments and behaviors. Those industries with higher levels of digital readiness are the ones that will be most able to weather the crisis. Individual companies with the best, most thought out Business Continuity Plans have seen the least impact to the business initially. Those companies willing to invest in technology will be the best positioned to survive and thrive in a post Covid-19 world.