How the pandemic has affected us and why it's not all negative
There's a new universal topic taking over all news and conversations in the past few months — coronavirus. It has affected almost every aspect of our lives, both private and public. Very optimistic economy forecasts, especially for the IT sector at the beginning of 2020, were quickly forgotten in February. According to experts from the Oxford Economics Institute, the COVID-19 pandemic has caused a decline in global GDP by about 10% in the first half of 2020, and this tendency may still continue.
The current economic situation
Let's take a look at the current situation. The most affected sectors were the ones related to tourism, transport and gastronomy, but also fuel, culture and entertainment as well as cosmetics. This was mostly caused by the global lockdown, which indisposed many shops, cultural institutions and restaurants for opening and people for traveling. The world-famous firm Uber from the transport industry has announced that it will cut the number of employees by 20% by the end of April. Recently more and more places have been re-opening and countries slowly terminating travel prohibitions. Even so, uncertainity of the possible second wave of corona and the financial situation of many people keeps us from fully using services and goods offered by the abovementioned industries, making their recovery extremely slow.
What about the situation in the IT sector?
As one may have guessed, IT is one of the industries that has been least affected by the pandemic. One of the main reasons is certainly a great diversity of the industry and the possibility of working completely remotely among most IT specialists. The ones to suffer the most in the IT sector are device manufacturers. Whether personal computers, tablets, smartphones or peripherals, most of the technology premieres have been postponed. People have chosen to limit the purchase of new equipment due to financial uncertainty, as it happened in many other industries offering nonessentials, especially the expensive ones.
On the other hand, coronavirus have had a very positive impact on the finances of VOD platform providers, online shopping and e-commerce services and all kinds of online tools that support communication between people in both the private and public sectors. For example, Netflix gained 16 million new subscribers in the first quarter of the year and made $709 million in profits.
Returns of the Most Impacted Industry Based on GEMTR
forecast for Feb 2020
On the bright side
It may sound ridiculous in the current situation, but according to NoFluffJobs, earnings of mid developers in March have increased by as much as 8%. The demand for specialists and seniors has also increased. Their high skills, extensive knowledge and thus the ability to adapt to rapidly changing conditions are invaluable to employers nowadays. Suddenly forced to manage remote teams and reorganize their work systems, many managers are looking for self-reliant individuals who could pull off their work with very little supervision. Unfotunately, for the same reasons, the demand for juniors has decreased.
Startups
It is also worth mentioning how the situation has impacted start-ups. They are a kind of businesses especially sensitive to any market changes. Their success depends on investors' and customers' money much more than the one of established companies, who could survive with no profit just by their savings. And as easily predictable, the situation of start-ups nowadays is tragic, especially the ones whose existence relied mostly on the help of investors. Some of them ceased to exist because they lacked money to continue operations, and investors themselves were afraid for their own money due to the uncertainty in the world economy. It is estimated that approximately 70% of startups won't be able to survive until the following year.
Domestic situation
In Poland, the economic situation is not too bad thanks to the anti-crisis shield, which had saved many enterprises and smaller businesses from collapsing. Many employees got the so-called "standstill" that helped them get through the toughest period while their workplaces were on hold. The employers were also offered financial help for not dismissing their employees, therefore many people could keep their jobs. Thanks to all this, many places could re-open quickly after the lockdown and many people got by the crisis with no significant problems.
Summary
As it usually happens in life, the COVID-19 situation isn't all black-and-white. Despite the obvious negatives, it did have a positive impact on some industries and businesses. As the life is slowly going back to normal, we remain uncertain of the future and our financial security, thus not wanting to take risks just yet. The IT sector, however, seems rather resistant to this crisis and is even partially growing. We can't be sure whether this tendency countinues through the second wave of the pandemic, but it seems like IT is a 'place to be' nowadays — hopefully other industries catch up with it soon.
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This article was originally published on the Digital Colliers Blog. Digital Colliers helps DACH and UK companies implement AI — see our AI consulting services or contact us.
