The future of a companies’ fate is not only framed by emerging trends and megatrends, but also to a greater extent affected by surprising events, the so-called wildcards. Any unexpected changes in the environment could lead to heavy turbulences or even a collapse of a company, a business, an industry and a national economy itself. It seems, that one of these wildcards has become a reality: The new Corona-Virus (although the SARS crisis was some kind of a prolog back in 2002/03).
Life is different these days in China
Now all anyone can think about is the number of Corona-Virus cases. Life in China, especially in Wuhan and Hubei Province as the epic center of the virus outbreak has radically changed in the last couple of weeks, where in addition to sealing off entire cities, people also have to bear their own daily health risk.
Far from being so dramatic as in Hubei Province, daily life in Shanghai, - the economic and financial heart of China -, also looks certainly different right now. As the government calls on everyone to stay at home to prevent the spread of the epidemic, crowds and busy traffic are nowhere to be seen in Shanghai: streets are deserted, public events are canceled, and almost everyone is wearing a mask.
Shanghai these days
Economic Impact – It depends on the business model
While factories, shops, hotels and restaurants are warning about tumbling down, transforming city centers into ghost towns, thousands of companies from various fields are trying to figure out how to stay operational and survivable in a virtual world by turning even more to the internet to help keep their customers loyal, hoping to weather the epidemic. As there is already a notable drop in the culture, tourism, catering and transportation sectors on the other hand e-commerce and home delivery services are booming. Also the concept of home office (which is not so popular among companies in China) experienced, - albiet more forcedly -, a new high: working from home becomes no longer a privilege, it’s a necessity.
What about the mid- and long-term economic effects of the virus crisis? As one of the most unsettling factors is the fast-changing impact of the virus at this stage, which is prompting daily changes in directives from the government, predictions at the current time seem to be fare away from accurate. Looking back to the SARS crisis there is some hope, that the economy will be bounce back later that year after the hard hit of the first quarter(s).
It`s all about people
With all the criticism of the Chinese system on the one hand and questionable reporting by mostly western media on the other hand as well as the economic worries, one should never lose sight of the people. With more than 20 million residents, prevention of the new coronavirus in Shanghai is complicated and requires great efforts, where volunteers and ordinary citizens in more than 10.000 communities are all making their contributions. It`s always encouraging to see how people are combating the Corona-Virus at the grassroots level.
All Photos by ©Dirk Mueller