How COVID-19 will Seriously Change the World
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When the world is in a state of panic and self-preservation, as the world is in right now, it becomes difficult for people to think about anything but keeping themselves safe. All over the world, some of the largest industries have been traumatically affected by COVID-19 and it is important to know-how. Through a massive shift in consumer behavior, we must understand how the industries that have supported billions of people for decades have been affected in ways that may never allow it to be the same.
Through panic and mass hysteria, we have seen everything from shortages of toilet paper to lockdowns of entire countries such as Italy, but the most important thing we must learn to understand is the implications that this virus has on large industries. These last few months have been an eye-opening experience for the modern world to take more severe measures in an effort to contain and combat future biological viruses. Some of the industries that will be discussed are healthcare, financial markets, e-commerce, and travel.
Healthcare
The first industry that comes to mind when we think about the implications of a virus is the healthcare industry. They are the ones that have to deal with all these worried sick people and are on the front lines combating the virus while everyone is keeping their distance. Since 2009 and the spread of H1N1, the world had not witnessed a pandemic as of yet. Evidently, this proved to be detrimental to our ability to contain and manage the current biological attack, COVID-19. Just two years ago, the Trump administration let go of two vital positions in the White-House aimed at preventing and dealing with pandemics, displaying the lack of importance the government has given to its citizen’s health.
As the COVID-19 pandemic continues to spread and grow as an issue affecting billions of people, governments will begin to further recognize the value of high ranking healthcare officials. The importance of healthcare in government environments will be further recognized the longer it takes to find a cure to the virus as it further warrants action. By the time future elections come around, it will definitely be a relevant position that will take up a spot on every administration team.
Starting in December of 2019, the Chinese government began to confirm that health authorities were treating cases of COVID-19. That is when the race began. For almost four months now, COVID-19 has outrun authorities and legislation until now where it is overwhelming our hospitals. For the last couple of days, hospitals in cities have come to reach max capacity and are no longer able to care for any more patients. People are being sent off to other hospitals and in many cases and even sent home to self isolate due to the fact that the healthy worried patients could be infected by the worried sick patients.
As this virus continues to put a strain on our major resources and industries, healthcare has continued to be bombarded with shortages of all types of crucial equipment. For months, massive amounts of personal protective equipment along with medical resources have been used all over hospitals to keep patients alive and physicians healthy. Some medical goods such as protective masks, respirators, gowns, and many other personal protective equipment have been in critical shortages. One of the biggest concerns at the moment is if there are enough ventilators in the whole country to treat patients with COVID-19.
As we know, influenza and COVID-19 share many of the same symptoms including pneumonia, and other respiratory illness symptoms, so our biggest concerns with shortages are with ventilators. When people have shortness of breath and parts of their lungs are inflamed, they could risk the chance of losing their life without a ventilator. While the number of infected people grows, the number of people that show up at hospitals is often more than they can handle. Therefore, only the patients in need of support are the ones admitted into the hospital to be tested for COVID-19 and being tended to. Most other patients without severe symptoms are generally the ones that are told to go home and seek help online or through any other resources. This is because hospitals are not even supplied with enough test kits and supplies.
Another issue that our healthcare system is facing is that patients with the virus don’t seem to realize that COVID-19 is not the only problem in the world right now. As COVID-19 becomes more demanding of hospital resources, hospitals have begun to postpone some surgeries to help conserve personal protective equipment that they have begun to have shortages of.
While people are urged to stay at home due to outbreaks of COVID-19, a trend has begun to develop, telemedicine also more known as virtual healthcare. Telemedicine has become one of the most opportunistic businesses in recent times. As more people are infected by the virus, more doctors and health professionals are also infected. Due to their extreme stress, fatigue, and long hours, doctors develop compromised immune systems which make them more susceptible. This increases the opportunity for unable doctors to help out online.
At first, being sent home to self-isolate was looked at as a disadvantage of working or being infected by COVID-19, but recently, a brand new opportunity revealed itself in the way of an online service. The infected physicians along with even retired nurses and healthcare professionals began to take part in telemedicine efforts on a multitude of virtual platforms to help people.
Through virtual visits, healthcare professionals can screen for viruses online and make sure more doctors are not unnecessarily infected. Along with so many other advantages, telemedicine helps to save resources that are vital at a time like this and makes doctor’s visits safer and quicker. Telemedicine is a service of the future and this was the lucky break it needed to become popular and to get more people to use it. COVID-19 is the telemedicine industry’s inflection point to be successful and make telemedicine the service of the future.
Financial Markets
Another sector that has been notably impacted by the international COVID-19 outbreak is the finance industry. A decrease in economic activity fueled by COVID-19 has resulted in shutdowns that have led to stock market crashes of over 30%. Governments and banks have no choice but to bring out the entire toolkit of monetary and fiscal policy to combat this crash and avoid a looming global recession.
With the rise of COVID-19, businesses have been shut down, jobs have been lost, and consumers remain in isolation. To secure finances during this time of uncertainty, people have opted to save rather than spend. Especially for the 74% of Americans who live paycheck to paycheck and the 58% who are on hourly wages, poor job security means that there is an increased necessity to save. Overall, these actions have slowed the circulation of money, hurting businesses, consumers, and economies alike.
Another large contributor to widespread market crashes was Saudi Arabia’s decision to decrease oil prices. To maintain prices during the pandemic, OPEC members wanted to cut oil production to increase scarcity. However, Russia did not agree to the plan, so Saudi Arabia retaliated by slashing prices in hopes of running competitors out of business and taking market share.
These actions have taken a further toll on nations that depend on high oil prices. Countries like Canada and America, who have large oil and shale industries respectively have faced the consequences of low oil prices, further deepening the wound imposed by COVID-19.
To prevent a market collapse, the Trump administration passed a bill, creating a $2 trillion stimulus package to re-ignite the economy. Paired with the federal reserve dropping interest rates to 0%, there are hopefully enough measures in place to keep the American and global economy afloat.
Banks also play a large role in ensuring the survival of financial markets. They need to ensure that they can keep their services operational so that there are no barriers in place to prevent customers from accessing money. Most money in the economy is circulated via banks, so if they begin to restrict services, the economy will continue to slide. As well, by increasing credit options for households and businesses, customers will have access to critical cash they would otherwise not have.
Overall, the coronavirus has taken a toll on our markets and the financial sector as a whole. The immediate impacts have been felt, and the short term plans are in place, but what does this all mean long term?
As seen with the financial crash in 2008, the markets do recover after an economic downturn. However, the impacts of COVID-19 will be felt well into the future. With a reliance on credit, household and business debt will increase, creating a significant burden for much of the population. This problem may lead to a redefinition of credit in the future, as many people will not have the means to pay off their debt in the near future. As well, there will likely be an even greater wealth gap between the wealthy and the middle class. Moving forward, this gap may redefine the political sphere of many countries, as the demand for equality will rise as more people slip between the cracks.
E-Commerce
The e-commerce industry has been hugely impacted by COVID-19. The current social distancing rule has pushed people to use virtual alternatives for going out and shopping. Some implications of this are, the increase in downloads of Instacart, Walmart’s grocery app and Shipt by 218%, 160%, and 124% respectively compared with the year prior.
Although there were some positive impacts for e-commerce, it does come with strings attached. The production of goods has been threatened by people overstocking during this pandemic. Overstocking in the UK alone has caused over 1 billion dollars of excess food in people’s houses in just three weeks. Manufacturing and production got even more difficult to support due to other related supply chain problems because of the reliance on Chinese factories which are quickly closing. While larger companies have cash reserves to look for new supplies and sources, smaller retail stores are at a disadvantage. On top of that, several closures and layoffs in organizations decrease short term sales, especially for discretionary goods.
Some solutions have become popular among retailers to mitigate the potential impact of the virus on their organizations. Huge supply chain gaps have been dealt with by emerging technologies like Radio-frequency identification devices, blockchain, artificial intelligence, and other technologies to help maintain inventory, awareness, and transparency. Through the use of these solutions, companies attempt to reduce the number of errors in the hope to mitigate late or missed shipments that add up to product shortage. There have also been calls for policy changes for employees in the retail sector because roughly 33.6 million people, or 24% of U.S. civilian workers, do not have access to paid sick leave. In addition, to directly address physical isolation, many brick-and-mortar stores have begun using cashierless or “grab-and-go” payment methods, including apps that let customers scan and pay for purchases using individual devices, to decrease physical contact.
Even though the retail industry may seem to have major flaws at the moment with delayed shipments and inventory issues, the recovery from the impact of COVID-19 will result in consumer spending higher than ever. Creating convenient ways for consumers to shop will change future consumer behavior, this has the potential to create higher future spending as discussed on Target’s investors call. The long term impacts in this industry will result in an increase in consumer spending through digital means and will overall increase the total percentage of digital sales. This was proved by a study at Forbes observing an increase in virtual shopping during the holiday season retained even post-holidays.
As we move into the future, the world that COVID-19 will provide for us will be a lot more digital. While people are forced to stay home for weeks on end; digital infrastructure is constantly being developed in support of a future where purchasing is more virtual. As the popularity and use of apps such as Instacart increases, the future is ripe with the opportunity to take e-commerce to the next level.
Travel and Tourism
The final industry that we want to discuss the impacts of is the travel and tourism industry. The international travel and tourism industry has been a 7.6 trillion-dollar market that took a nosedive in the early months of this year due to COVID-19. As the virus spreads and panic intensifies, China shut down a lot of the travel within its borders in an attempt to contain the virus. Other countries such as Russia closed their land borders to travel with China as a more severe precaution. Some professionals predict that the effect of travel bans and limitations imposed by countries will have a greater effect on the economy than the virus itself. Airline companies such as Air Canada have already significantly reduced the number of planes sent and brought back from China in an attempt to reduce the spread of COVID-19.
In 2019, the travel and tourism industry amounted to 10% of the global GDP and in the past couple of months, thousands of travel plans have been lost. Airlines are attempting to refund fares, extend change fee waivers, or provide credit towards future flights as much as they can to compensate for the virus. Major conferences that expect to attract hundreds of thousands of people were canceled due to the virus and this is just the beginning. According to a survey conducted by the Global Business Travel Association, they estimate that up to 37% of business travel is at risk of being lost.
With a timeline just shy of three months of travel bans and limitations, the travel and tourism industry has been on a decline. Even for months into the future, airlines will still be unable to run the same way that they have. According to another study, 20% of people said that they would not be willing to buy non-refundable tickets 9 months into the future because they are scared of the continued risk of the virus. The future implications are already evident solely through the analysis of consumer behavior.
As of now, for over three months or an entire quarter, COVID-19 has restricted travel amounting to a potential loss of 25% of the travel and tourism industry this year alone. Although the effects on the industry are catastrophic, the potential implications this will have on workers could be even worse. According to the World Travel and Tourism Council, the COVID-19 pandemic can result in over 50 million jobs lost.
For one of the hardest-hit industries by COVID-19, it will be months or even years until the travel and tourism industry recovers this type of loss. As one of the largest industries that are losing billions of dollars every day, it will be a steep hill to climb back up for this industry to come back to its glory days. In these uncertain times, people have reassessed and adjusted to our situation. One of the adjustments that people have made is being more virtually dependent. As flying becomes less viable as we come into the third month of COVID-19, people have begun to have a greater dependence on teleconferencing instead of travel. Even if the travel and tourism industry bounces back from this devastation it will not be as successful as it once was. As people are forced to try new things and test out new technologies that they may have never been used before, people may surprise you and get hooked. For years now, technology has become an option in the business and conference settings, but now due to travel limitations imposed by the government, it will prove to be successful as the new status quo. Along with other factors, the travel and tourism industry will no longer be able to restore its former glory within this identical market space.
Thank you for taking the time to read my article. In these times of uncertainty, it makes it difficult to concentrate. So I thank you for reading this article and I hope you learned something. Share it with your friends and family if you enjoyed it or learned something and add me on LinkedIn to keep up with other content I put out!
TL;DR
- 🔑 Hospitals and other healthcare facilities are starting to have shortages of personal protective equipment and other crucial resources such as ventilators.
- 🔑 The healthcare industry is inevitably evolving with a focus on virtual healthcare.
- 🔑 COVID-19 has taken a toll on our financial sectors which has experienced a significant economic downturn.
- 🔑 As seen with the financial crash in 2008, the markets do recover after an economic downturn.
- 🔑 At this time, there have been high growth rates for e-commerce resources such as apps.
- 🔑 While people are forced to stay home for weeks on end; digital infrastructure is constantly being developed in support of a future where purchasing is more virtual.
- 🔑 According to the World Travel and Tourism Council, there is a possibility for the COVID-19 pandemic to result in over 50 million jobs lost.
- 🔑 COVID-19 has restricted travel amounting to a potential loss of 25% of the travel and tourism industry this year alone.
