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4 Ways Corona Virus is Reshaping the World Economy

1.  Resilience Help From the Private Sector

It has been tragic to see lives jeopardized due to the global lack of crucial medical and safety equipment, including masks costing less than a dollar. This absence of preparation for the outbreak has shown the value of resilience: the capacity for human systems to anticipate, cope, and adapt. 

Coronavirus has forced purchasing trade-offs, with consumers asking better quality and healthier alternatives: more than 70 percent of the consumer review will continue to give more time and money buying safe and eco-friendly products, while three-quarters want to eat more healthily after the crisis.

During the 2003 SARS outbreak, the government and state-owned companies were the main characters through the economic recovery. Now things have changed. The private sector and driving technology companies are playing a more important role, creating massive socioeconomic contributions among the rise of powerful social foundations that have granted millions to recovery efforts. 

COVID-19 accelerated long-awaited fundamental improvements to land, labor, and capital markets in many countries.

The increase in the global economy from COVID-19
Economy Restart after coronavirus COVID pandemic. Hand pressing the green restart button on the monitor of the computer.Time for economic growth.

2.  Sustainable Stimulus From Governments

Governments throughout the world are rushing to perform economic stimulus and support packages to hold individuals, businesses, and economies afloat. 

Several governments are requesting companies in important sectors to relocate their operations back to their home countries and stating financial support packages to promote this. 

The pandemic has suddenly dived the world into "a global recession we have not seen in our lifetimes," -the director of IMF stated, leaving governments scrambling to avoid an entire meltdown. The organization has promised to use its $1 trillion lending ability to support nations through a health emergency.

Major economies have now unleashed trillions of dollars in stimulus and central bank easing, but rampant care needs to be kept in check for long-term restoration. Not only this, but COVID-19 has stimulated digitization in business-to-consumer applications and channels or business-to-business processes.

3.  The Technological Impact

Crises, including epidemics, can encourage the adoption of new technologies and business models. The SARS outbreak of 2003 is often attributed to the adoption of online shopping between Chinese consumers, stimulating Alibaba’s rise.

As schools have closed could e-learning and e-delivery of education notice a breakthrough? Have digital applications in Wuhan to restrain the crisis via smart-phone trackers effectively demonstrated a great new public health tool?

In China consumers and businesses have expedited their use of digital technologies as a result of COVID-19. About 55 percent of Chinese consumers are anticipated to continue buying more groceries online after the peak of the crisis. 

In healthcare, digital communications accelerated—the rapid growth of online consultations.

There have been more virtual communications among pharmaceutical sales agents and physicians. These changes happened ahead of the wide deployment of 5G technology, which will catalyze the application of digital tools.

Economy situation 2020
A graphic showing the impact of COVID-19 in economy from 2019 to 2020

4.  Inequality Transformation

The COVID-19 pandemic is a unique global shock that amplifies the meaning of inequality, punishing the poor the hardest. In developed countries, frontline workers in the service economy are among the most exposed to the virus and the least prepared to absorb its financial impact. 

Political results are not to be ruled out, globally, as the virus puts to the test different political systems’ capacity to effectively protect their populations. Fragile institutions could be exposed, and political changes triggered. 

The most difficult hit will be among the poor countries, where workers will not have the profit of social safety nets and stimulus packages. These countries need aid to finance the flattening of the pandemic curve. This is increasing long term efforts to promote sustainable economic systems, including fair trade and investment.

Technology transformation and innovation will help the global economy to come up with intelligent solutions. This will provide new opportunities for startups in technology.  n the meantime, I truly hope you are safe in this challenging and uncertain time. Together, we can contribute to establishing a better, more sustainable world.