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Lock downs and ongoing social distancing have had devastating effects on some industries and their workers, while fostering surprising surges in other types of businesses. Entrepreneurs must look to the future and ask, what will a post-pandemic economy look like?
When stay-at-home orders to protect public health were put in place, the immediacy of the shift to remote work was remarkable. Many companies already working with cloud-based technologies pivoted seamlessly, but travel, service, and hospitality industries weren’t as lucky. Lower-skilled workers, who represent a major percentage of hospitality, retail, and service workers, have suffered devasting job losses. Fortunately, remote work and social distancing have opened opportunities for delivery drivers and warehouse workers. Opportunity also exists for entrepreneurs who find ways to fill needs for at-home workers in a no-contact way. For example, personal trainers, yoga instructors, tutors, and educational institutions quickly learned to deliver classes and services online.
The shift to remote work for largely white-collar workers is already having major secondary effects. Workers realize they don’t need to live in or near large city centers. As a result, a suburban and rural real estate boom has begun. Fleeing city dwellers search out wide-open spaces and fresh air. Companies have realized they don’t need to spend on business travel. Thus, so much fewer people will go to city centers for work, shopping, or entertainment that commercial real estate is likely to decline precipitously. The decline in city-based economic activity will adversely affect the fiscal health of cities.
It’s obvious that the post-pandemic economy will continue to be driven by technology. The shift to doing business and shopping online has benefitted cloud computing companies, software-as-a-service providers, and online payment platforms. Apps like Zoom and Microsoft Teams that enable remote workers to interact online have exploded, facilitating millions of contacts per minute.
The pandemic laid bare defects in supply chains for personal protective equipment and medical devices. Manufacturers that could rapidly retool to step in and assist demonstrated a kind of flexibility that will remain an important quality for post-pandemic success. The future will demand greater efficiencies, and supply chains will increase their dependence on automation and artificial intelligence.
Small and medium-sized companies have traditionally driven job growth. Unfortunately, many will not survive the pandemic. With smaller cash reserves, these companies may not be able to access additional credit and could close permanently. Entrepreneurs and private equity may benefit, as businesses in vulnerable industries like hospitality, retail, and manufacturing may decide to sell their businesses. Visionary new ownership may find ways to repurpose these businesses and their facilities to find ways to succeed via online commerce and services.