Because of the drastic effects of the coronavirus pandemic, many self-employed people fear for their existence – musicians, photographers, artists, alternative practitioners and freelancers, for example.
Many shops had to close, fairs, events and concerts were cancelled. International traffic has almost completely ceased, which leads to delivery problems and makes airlines fear for their existence.
In order to save jobs and bail out companies many countries currently provide support for the local economy.
Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon presented an 80 billion shekel ($22.3 billion) economic program to help the economy get through the impact of the coronavirus pandemic. In the USA a $2 trillion aid package is released and the EU is supporting their countries with $500 billion.
But even these large sums are not enough to save everyone. Unemployment is at a record high in almost every country and many companies have gone bankrupt. The start-up scene is also currently undergoing a severe sifting. So, which sectors are hit hardest by the corona crisis, which less and who are the even winners?
Who are the losers of this pandemic?
The energy sector has been brutally hit and whether stocks, bonds, gold or crypto-currencies, there is hardly any asset class behind which one could find safety from this crash.
After that comes clearly the tourism and travel industry. This includes hotels, airlines and housing providers and many more. Revenues from tourism are lost, which hits some countries hard. In Thailand, Hong Kong, Austria and Mexico, tourism revenues account for about 15% of GDP. The world tourism federation feares the loss of 50 million jobs worldwide. Asia is the most affected continent. Here alone, 30 million jobs are expected to be lost. Additionally, museums, national parks, zoos, ski resorts and many more are included. These facilities cannot simply switch to a delivery service and are facing completely new challenges. A zoo in Neumünster/Germany has already made a list of animals to be slaughtered first and fed to the other animals when there is no money left for food.
Also, all organizers, booth builders and members of the industry, such as caterers, are suffering extremely. Gastronomes and many small shops are currently fighting for their existence. But also, the companies that have designed their offers exactly for this target group are going down with them. On the stock exchange, shares of companies that offer payment solutions for exactly this clientele, such as Square, are traded as if there were no tomorrow for these customers.
Who are the winners of this pandemic?
Online banking, online video conferencing, online shopping, online delivery services, online streaming, online news! For instance, Microsoft has reported that the number of daily active users on Microsoft teams has increased from 20 million in November to now 44 million. There is no doubt that the digital providers are among the clear winners of the corona crisis. The curfews have accelerated or forced the process of digitization in private households as well as in companies.
Retail, explicitly supermarkets, are also among the winning sectors in the crisis. Supermarkets are already recording similarly high sums as during the Christmas business.
However, as in every crisis, there are companies for whom new external circumstances unexpectedly open up great opportunities. Manufacturers of protective clothing, biotechnology and pharmaceutical companies that have probably never received so much attention as in recent weeks.
Tech start-ups are booming! WASP (World’s Advanced Saving Project) for instance, has developed individually adapted face masks with 3D printing and an exchangeable filter. Localization apps are invented that detect if a person could potentially be infected by a corona patient. Doctor on demand apps show a partial increase of 60% and Coronavirus symptom checker apps have come onto the market. In Italy technical attachments were invented that make it possible to turn a standard snorkel mask into a ventilator.
Also, other entrepreneurs saw their chance and invented lots of objects that make everyday life during the danger of corona infection easier and protect people from infections. For example, disinfectant dispensers that can be operated with the foot and various aids for opening doors without touching them have been launched on the market. My personal highlight: a belt with two short rubber bands attached to it, which can be tied around the wrists to prevent you from touching your face.
The ‘ losers’ can change their fate!
The sectors concerned are not chained to its fate. They can change it! Great solutions have already been found for this.
- Many clothing brands such as Nike, Adidas and many more are producing face masks and shields. Restaurant opens deliver services.
- Hotels have been transformed to hospitals.
- Common airlines deliver necessary goods from countries or transport corona patients to other countries where there is still capacity for corona patients.
- Airbnb offers its users so-called online experiences, where users offer courses for other users to virtually discover popular destinations and learn new skills. For example, users can take a baking course in San Francisco or a meditation in Osaka. They also offer accommodation for medical staff and first responders in order to live close to their work and ‘safely distanced from their own families´.
Through creativity, innovation and pivots companies already gave amazing examples how to react. In the upcoming weeks we will see who has the ability to think innovative and is flexible enough to adapt to the situation. This is not the end. Difficult roads lead to beautiful destinations!
“If you’re going through hell, keep going.” – Winston Churchill