Dr. Rajesh K Pillania
Professor of Strategy, MDI, Gurgaon
Coronavirus epidemic (COVID-19) also called 2019-nCov, 2019 Novel Coronavirus emerged from Wuhan in China in December 2019 and from there it has spread across the world. Today 210 countries around the world have reported cases of Covid-19, 49 countries around the world are currently in full or partial lockdown. There are currently over 2.7 million cases diagnosed worldwide and 190,000 deaths (Worldometer, 2020). It is an unprecedented crisis in human history in terms of speed of spread of COVID-19 and its impact on national economies, global trade, industries, and daily life.
Impact on Industry
This epidemic has huge negative and some positive impact on the industry.
According to UN Department of Economic and Social Affairs (DESA), the global economy could shrink by up to 1 percent in 2020 due to the coronavirus pandemic, and it may contract even further if restrictions on the economic activities are extended without adequate fiscal responses. With around 100 countries closing national borders in the last one month, this pandemic has disrupted cross border movements of people and good and international trade.
A McKinsey Global Institute analysis, based on multiple sources, indicates that the shock to our livelihoods from the economic impact of virus-suppression efforts could be the biggest in nearly a century. In Europe and the United States, this is likely to lead to a decline in economic activity in a single quarter that proves far greater than the loss of income experienced during the Great Depression (McKinsey 2020). A UN report from ILO highlights that lockdown is currently affecting 2.7 billion workers, representing 81 percent of the world’s workforce. Employment contraction through layoffs or working hours’ reductions equivalent to 195 million full-time workers will be felt through the second quarter of the year (ILO, 2020).
The impact is across the globe but there are a few countries like Taiwan that can handle the pandemic without getting affected by it much and without closing its economy.
The impact is widespread but it has impacted certain industries very hard such as tourism, hospitality, and aviation. And few industries have got new momentum such as online communication platforms such as zoom and others (as shown in Fig 1).
Figure 1: Rise of Video Platforms
Source: World Economic Forum April 2020.
The economic growth and industrial growth is generally criticized for its lack of focus on environment and sustainability. One positive impact of the pandemic is a reduction in pollution levels and a breather for mother earth, other species on planet earth, and sustainability.
There is another positive impact in terms of focus on innovation. We have seen great examples of innovation across industries, moving entire workforces home, cross country collaboration, and sharing of open-source material to make ventilators, masks, visors and the utilization of 3D printing to fill in where supply chains have failed.
Impact on Higher Education
There is both a negative and positive impact on higher education.
“We expect rated universities in all of our current jurisdictions – US, Canada, UK, Australia, Singapore, and Mexico – to enroll fewer students for the next academic year than planned, due to the outbreak,” said Jeanne Harrison, Vice President, and Senior Analyst at Moody’s. (Moody’s Investor Services, 2020).
However, another way to look at it is, one industry that is going to gain out of COVID-19 is for sure is higher education in general and online higher education in particular. For this these institutions need to come up with innovative approaches. In an era where unemployment rates are going higher and higher, many people will try to upskill or upgrade to be fit enough to get back in the job market when it improves.
Higher education institutions need to come up with innovative ways to create value for this big size of the market by creating innovative ways to support this upsurge in the need for upskilling. One innovation needs to be in the way fees are charged. Maybe to start schemes like, learn now and pay a 1 or 2 later or some variation of it. Travel restrictions may last past the start of the next semester so institutes need to adapt to the unique needs of the situation.
The way forward: What Industry and Higher Education Institutions need to do?
COVID-19 is a reality and it is going to stay here, till some vaccine is not innovated. It might come by year-end if Oxford University vaccine and other vaccines in the trial shows positive results or might take some time and come in 2021 or 2022. We need to accept this reality and move forward accordingly.
To survive the challenges posed by COVID-19, governments, international organizations, industry, and higher education institutes need to demonstrate agility and innovation. Utilizing technology, to allow workers and students to work remotely, present content online, implement social distancing in workplaces and places of learning and secure alternative supply chains will allow this to take place.
We are at the beginning of the global battle against COVID-19. There may be a second wave and possibly more, and the survival of both educational institutes and industries depends on how agile we are in responding to the current crisis and how we innovate and pivot if necessary out of this crisis.
(The author acknowledges inputs from Ms. Dearbhla O’Reilly)
Kevin Sneader and Shubham Singhal ( March 2020), “Beyond coronavirus: The path to the next normal, McKinsey & Co, McKinsey & Co website: https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/beyond-coronavirus-the-path-to-the-next-normal ( Accessed on April 22, 2020).
World Economic Forum (April 2020), World Economic Forum Website: https://www.weforum.org/agenda/2020/04/post-pandemic-economy-favour-fastest-movers/ (Accessed on April 22, 2020)
Moody’s Investors Services (April 2020), Moody’s – COVID-19 puts pressure on higher education, Moody website: https://www.moodys.com/research/Moodys-Covid-19-puts-pressure-on-higher-education-finances–PBC_1222963 (Accessed on April 22, 2020)
ILO (April 2020), COVID-19 and the world of work, Second Edition, ILO website: https://www.ilo.org/wcmsp5/groups/public/—dgreports/–dcomm/documents/briefingnote/wcms_740877.pdf (Accessed on April 23, 2020)
Worldometer (April 2020), COVID-19 Coronavirus Pandemic, Worldometer website: https://www.worldometers.info/coronavirus/ (Accessed on April 24, 2020)