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Overall Impact of COVID on the Modern Day Individual

By: Riya Singhvi and Rishav Baid Editor: Akshat Daga

Illustration by KJ Shakti


ABSTRACT

The Covid-19 outbreak has led to the rise of various obstacles and economic hardships for businesses and societies across the globe. It has had a significant impact on the way people would want to operate their businesses in the coming future. With millions already infected, it is no secret that people all around the world are paranoid about what is coming next and how the economy will be affected in the coming years. Many national leaders who saw significant growth in the number of cases in their country imposed complete lockdown. This meant that cash inflow and revenues of almost all the sectors declined significantly, but the fixed expenses kept piling up. This article is going to talk about the impact of COVID-19 on businesses, technology and society as a whole.

IMPACT OF COVID-19 ON BUSINESSES

Listed below are some of the rising issues that businesses will have to combat because of COVID-19 are explained below: -

1. Supply Chain Management- The change in the demand and supply of products will be difficult to model and assess. Companies, due to their decrease in revenues might start cutting costs by buying cheaper machines, decrease production levels, etc. [8]

2. Finance and Liquidity- Companies will be facing a cash crunch and will have to raise money or take loans from financial institutions in these uncertain times, when the business activities are slow. Repayment of loans will become difficult and therefore, businesses will look for ways to restructure their loans. [8]

3. Workforce- Businesses around the world must figure out a way in which they are going to handle their workforce. There will be massive retrenchment in companies as well as the commencement of the culture of working remote jobs. Companies will have to spend a lot of resources to ensure the safety of the employees who will work from offices. Businesses will also have to ensure that work is being done with 100% efficiency even when employees are working from home. [8]

4. Strategy and Brands- The global pandemic has brought unknown and fast-moving variables, for which none of the companies were prepared. There must be a careful screening of the impacts that the businesses have faced, and a proper strategy must be made with the worst-case scenario kept in mind. [8]

In January, a short survey was conducted of more than 5800 small businesses and several themes emerged. Amongst the sample, approximately 43% of the businesses were temporarily shut and 40% of employees (on an average) were released. Many businesses had only one month of cash in hand to handle their fixed expenses and required immediate funding which they said was difficult to get due to bureaucratic hassles and difficulties establishing eligibility. [1]

All in all, almost all the businesses around the world, no matter from which sector they belong to, need to consider the impact of coronavirus going forward. Governments all around the world are providing stimulus packages so that companies can get some assistance and bounce back stronger. Countries like the USA, Japan, India, and many more have given more than 10% of their GDP as stimulus. [5] Businesses need to check if they can get any kind of benefits from the stimulus and take full advantage of it.

IMPACT OF COVID-19 ON THE TECHNOLOGY SECTOR

Out of the many technological sectors, these are the 3 sectors that are likely to be impacted due to COVID-19 :-

1. Hardware/Software- There has been a decrease in the purchase of expensive mobile phones and a deferment in the launch of smartphones due to an imbalance in the supply chain network. Distance learning and remote working has increased the demand for laptops and other technologies as the students and employees are in a need for it to continue with their daily work. [9] Studies show that Italy announced an €85 million package to support distance learning for 8.5 million students and improve connectivity in isolated areas. [10]

2. Information Technology- Due to the usage of high amount of technology and different applications, there has been a growing concern regarding cybercrime with respect to large scale hacking. Due to this reason, IT spending has elevated to ensure full security while accessing any of the technologies. A research showed that the infrastructure industry will be the least affected segment according to the adjusted forecast with a projected growth rate of 3.8 percent in 2020, as companies keep utilizing cloud deployments. [9] The most probable scenario shows us that IT spending is projected to grow by 3.7 percent compared to 2019. The "pessimistic" scenario shows a growth of 1.3 percent in 2020. [4]

3. Telecommunication- With a decline in domestic and global business travel, there has been a sharp increase in mobile communication. High-speed telecommunication will require proper 5G network deployments as it will help in ever-faster access to data and automation to meet the heavy demand. During a March 2020 survey, 76 percent of responding adults stated that due to the COVID-19 outbreak, they had used e-mail or messaging services to communicate with others. [2] The internet is also a popular source of information regarding the global pandemic - a total of 70 percent of respondents stated that they had searched online for information about the coronavirus. [9]



Source: Forbes FIGURE 1

Figure 1 [3] shows the increase in demand and usage of these technologies during COVID-19. Therefore, we see that the technology industry is likely to gain traffic in the coming years as all businesses and industries switch to online modes of functioning. With this sudden increase in demand, the technology sector might struggle to keep up with the fast pace due to limited time. Therefore, what is primarily required, is to reprioritize the industries that need the most amount of technical expertise and attention.

SOCIAL IMPACTS OF COVID-19

Not only has the virus affected businesses and technical industries but also society at large.

It has had a significant impact, especially on the people who are living in poverty, older persons, persons with disabilities, etc. The homeless people, for example, do not have the means to maintain the amount of cleanliness that is required in these times. These people are more prone to catching the virus than anyone else. Coupled with that, countries like India and the USA have been facing problems with their migrant workers. This is because, after the sudden implementation of the lockdown, the workers were left without a source of earning and it was not possible for them to go back to their hometowns/native countries as well. The employment options will also be less for people across the globe as all the companies will start cutting their costs. Even a large-cap company like Uber has fired 25% of its workforce. This indicates that the impact might be even bigger in the small-cap companies. [11] Based on different scenarios for the impact of COVID-19 on global GDP growth, the International Labour Organisation estimates indicate a rise in global unemployment of between 5.3 million and 24.7 million from a base level of 188 million in 2019. [6]

In many parts of the world, the migrant workers have also been protesting in crowds. As a result of , the coronavirus pandemic, global travel and tourism market is predicted to see a loss of 100 million tourists in 2020. As a result, the GDP generated by travel and tourism is predicted to decrease worldwide. [7] In some countries, there has been an increased amount of inequality in terms of treatment provided in order to earn money. The only way to overcome this situation in the long and medium-term is to develop comprehensive and structured society protection measures. This can be done by providing basic income security, especially to the daily wage owners so that they can neutralize the effect of any sudden income shortage and are able to manage their living accordingly. [11]

CONCLUSION

The coronavirus outbreak has created a severe impact on the global economy including businesses, the technology sector and society. Even after the virus is subdued in the coming months and years, it’s impact will be something that will remain for a long period of time. Some industries will have to adopt bankruptcy protection schemes and others will have to switch to other industries to earn a living. The international community will now be required to restore and uplift the society and focus on human centred work for the coming future.

REFERENCES

1. Bartik, A., Bertrande, M., Cullen, Z., Luca, M., Glaeser, E., Stanton,C. (2020), HOW ARE SMALL BUSINESSES ADJUSTING TO COVID-19? EARLY EVIDENCE FROM A SURVEY, Retrieved From http://tjyute.com/papers/w26989.pdf

2. Clement, J. (2020, June 19). Coronavirus impact on digital communications in the U.S. 2020. Retrieved June 27, 2020, from https://www.statista.com/statistics/1108828/usa-coronavirus-digital-communications-usage/

3. Columbus, L. (2020), COVID-19's Impact On Tech Spending This Year, Retrieved from https://www.forbes.com/sites/louiscolumbus/2020/03/16/covid-19s-impact-on-tech-spending-this-year/#4331afa32d67

4. Holst, A. (2020), IT spending forecast worldwide 2020, adjusted for COVID-19 impact, Retrieved from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwj5kev0kaTqAhV_wzgGHVomB_MQFjAAegQIBBAB&url=https%3A%2F%2Fwww.statista.com%2Fstatistics%2F480086%2Fworldwide-it-spending-growth-forecast%2F&usg=AOvVaw2USZFEjtHs4ogQzF7t1XV3

5. Indian Express (2020), Explained: How Covid-19 has affected the global economy, Retrieved from https://indianexpress.com/article/explained/explained-how-has-covid-19-affected-the-global-economy-6410494/

6. International Labour Organisation (2020), Almost 25 million jobs could be lost worldwide as a result of COVID-19, says ILO, Retrieved from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiAlMWMkqTqAhU-xDgGHf8cAr4QFjAAegQIAhAB&url=https%3A%2F%2Fwww.ilo.org%2Fglobal%2Fabout-the-ilo%2Fnewsroom%2Fnews%2FWCMS_738742%2Flang--en%2Findex.htm&usg=AOvVaw29k96nEr2QiNE5IuNZMUdB

7. Lock, S. (2020), COVID-19: forecast GDP loss from unemployment in tourism industry 2020, by region, Retrieved from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiQsLCmkqTqAhXMyDgGHSrhAl0QFjAAegQIBBAB&url=https%3A%2F%2Fwww.statista.com%2Fstatistics%2F1107493%2Fcoronavirus-travel-tourism-gdp-loss%2F&usg=AOvVaw1uAOkau3kElcT0jMC-Iy8J

8. PricewaterhouseCoopers. (2020). COVID-19: How You Can Prepare Your Organisation and Respond, Retrieved from www.pwc.com/gx/en/issues/crisis-solutions/covid-19.html.

9. Sallomi, P. (2020), Understanding the sector Impact of COVID-19, Retrieved from https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/COVID-19/COVID-19-Impact-Technology-Sector.pdf

10. UNESCO (2020)., 1.37 billion students now home as COVID-19 school closures expand, ministers scale up multimedia approaches to ensure learning continuity., from https://en.unesco.org/news/137-billion-students-now-home-covid-19-school-closures-expand-ministers-scale-multimedia

11. United Nations (2020), The Social Impacts of COVID-19, Retrieved from https://www.un.org/development/desa/dspd/2020/04/social-impact-of-covid-19/

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