These are the business trends that will emerge out of Covid-19:
—there is much we don’t know. Is Covid-19 on its way out or surging? Will it make a deadly return in 2021 like round two of the Spanish flu? Will the global experiment in modern monetary theory lift whole economies or just boost asset prices? Will it sow inflation or will recessionary deflation continue? Other trends are clearer.
Here are five:From my Silicon Valley perspective, the biggest global business story prior to Covid-19 was a brisk acceleration of the rate of technology evolution—and it is still undergoing a transformation that ensures the industry’s continued growth. Tech leaders from VMware’s Pat Gelsinger to Microsoft Azure head, Scott Guthrie, believe the underlying pace of digital evolution is 2-3x faster than even five years ago. Relatively new companies such as ServiceNow and Atlassian have rapidly emerged as digital platforms, the holy grail of any tech company. Big tech was strong heading into the Covid-19 crisis and has only grown mightier. Customers of enterprise tech are not slowing their investments. CEOs have put a premium on agility. The biggest ask of tech by CEOs and CFOs is aI wrote about this in my previous column. Stocks have held up more than one would have expected, given the Great Depression-like collapse of commerce in the second quarter. Tech has surged. What markets see is a reasonably fast recovery—not a V-shape, but a “skinny U” as Campbell Harvey, a professor at Duke’s Fuqua School of Business, put it recently. Still, it may take 18 to 24 months to return to January 2020 levels of global GDP. But by the third quarter, barring a second Covid-19 shutdown, the growth rates will be impressive compared with the basement of March 2020.While some sectors like tech, telecom and shipping were stable, small family businesses have been hit hard, and there are disastrously high unemployment rates among youth. These factors will lead to a boom in “survival entrepreneurship.” History shows that this kind of entrepreneurship—a traditional path of immigrants—is more durable than startups created by entrepreneurs who are affluent and have good PowerPoints. In the U.S., the 1970s were a lousy decade for business—gasoline prices quadrupled, a president and vice president resigned, and the stock market lost 45% from peak to trough. Yet Apple, Charles Schwab, FedEx, Microsoft and Oracle were born in that dicey decade.
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