The pandemic has shuttered entire industries, and put into sharp contrast companies which can pivot and grow in the face of a shutdown.
As of late August, 180,000 retail businesses have closed – 60 percent of which will be closed permanently – and others friendly to a pandemic lifestyle (ie businesses with takeout and delivery) continue to struggle.
This is coupled with a drastic 14.7 percent rate of unemployment at the beginning of the pandemic, and a current 6.7 percent rate as of November 2020. Economic losses are estimated at $16 trillion, and include the steepest quarterly drop in economic output on record, a decrease of 9.1 percent in the second quarter of 2020.
Despite the unique challenges of each business in the face of these losses, what all have in common is the need for rapid innovation and digitization to meet the current and future needs of the public. The use of digital products and accommodation of artificial intelligence and robotics was previously the cutting edge for many industries, but the pandemic has pushed these topics into sharp focus. Data from previous economic downturns demonstrated that businesses which continue to invest in innovations like these through an economic crisis tend to fare better than those which reluctantly acquiesce to new technology.
Even with a universal digital focus, tech-focused companies have not been immune to economic impacts in their related industries. In response to an essential collapse of the travel industry, Uber and Airbnb let employees go en masse. Retail and payment processors also took a hit, but some found opportunity in the crisis. Gravity Payments, a credit card processing company, chose to engage its employees, who voluntarily took pay cuts in lieu of layoffs. –They now report a 31 percent increase in sales despite maintaining the same headcount.
In response to layoffs and stressful work from home transitions, some companies have turned to strengthening partnerships with organizers of remote team building, and further leniency in contracts to maintain long term relationships. Regardless of the method, finding ways to develop partnerships and nurture long term relationships has become critical to surviving the pandemic.
Increased remote work has also led to a mass exodus from tech hubs, and a fierce battle for location-independent tech talent. Companies which demonstrate a lack of concern for their employees send a clear message for job seekers in the post-pandemic future. Related studies have revealed that companies which turn first to layoffs during a crisis fare worse in the long term when compared to those who find more innovative cost-savings measures.
Adoption of remote work and collaboration as a function of digitization has also ushered in rapid development of digital practices in other areas of business: customer service, digital products, and R&D.
Important decisions regarding product offerings have become a top priority under threat of closure, and across all business types, pivots have become the norm. Bars and distilleries stayed relevant by making hand sanitizer with excess alcohol, and genetic diagnostic companies began to support COVID testing. Ford Motor Company committed to producing face shields for health care workers, and Dyson designed a new ventilator for production.
Businesses which support remote work or digitization of the economy have doubled down. For example, MachineMetrics, an IoT platform for machines, has focused on remote technology monitoring to help manufacturers monitor their factory productivity and supply chains.
Spotify pivoted to focus on podcasts to generate revenue; and in just one month, the platform saw users upload more than 150,000 podcasts.
Startups were some of the most vulnerable during the shut down; however, many demonstrated that due to a greater focus on technology, they were able to outmaneuver much more established competitors. Before the pandemic, workstation company, iMovr’s clientele included mostly corporations. But due to a tech focus in their business, they were able to move to direct-to-consumer sales much faster than large competitors, Herman Miller and Steelcase.
Another example of tech savvy pivot is Travel EZ, an online service which originally crowdsourced accessibility details of shared spaces like hotels and restaurants. The startup used its same technology to launch a COVID compliance mobile app, CareFull, which allows users to search for safety precautions at restaurants nearby.
While some companies made slight adjustments, others changed entirely. Regardless, every business had to pivot, develop partnerships, and grapple with the future of technology to become resilient in the face of uncertainty.
OAW’s mission supports the future of resilient businesses and technical career development for continued economic growth in America. From virtual career fairs to relocation support, One America Works is focused on leveraging tech talent for growth in cities outside of Silicon Valley. With the growing popularity of tech savvy startups and the wave of digitization in established corporations due to COVID-19, America draws closer to a working world in which economic opportunities are not bound by geography.