Introduction

After a century of the deadly pandemic outbreak, the Spanish Flu, another life-threatening infection, Covid-19, took over the world towards the end of 2019. Originating in China, the disease quickly spread to all continents, with the mode of transmission being fluid exchange facilitated by physical touch. Millions of people lost their lives to this deadly infection. Covid-19 infection was declared a pandemic situation just a little after one month of its first confirmed case. It has been two years, and the spreading of the disease still continues with the discovery of new variants every now and then. The outbreak of this infection made a massive impact on the global economy. No nation was spared from this deadly virus. From local businesses to multinational businesses, all the enterprises had to go through a rough patch during the time of the pandemic. All kinds of businesses and activities, except for the essential ones, came to a halt when the pandemic situation was at its peak. Various businesses went under due to the absence of market and buyers. As the pandemic was characterized by the economic crisis, people barely had any money to live life as before, causing most businesses to collapse. While on the other hand, some other businesses rather flourished during this pandemic period. As physical touch was banned everywhere, businesses that required physical interaction went under. Meanwhile, the businesses that did not require any physical touch bloomed brightly. This paper will discuss the positive impacts as well as negative impacts caused by the Covid-19 pandemic on businesses worldwide.

Negative Impacts of Covid-19

Covid-19 certainly is not a pleasant thing that occurred to humanity. As a matter of fact, millions of people lost their lives, and millions of people were put on the brink of death due to this virus. In addition, the virus brought all kinds of misfortune to the businesses being operated worldwide. The product-based businesses were the ones who had to suffer a massive hit from the pandemic as compared to that service-based businesses. When talking about business, the prime factors associated includes labor, demand, supply, trends, etc. With the downfall of the economy and halt in human activities, all these factors got impacted by the infection. To begin with, the labor shortage is the very first negative impact of Covid-19 put on global business. As soon as people started getting infected with the virus, they transmitted it at an exponential rate as well. Due to this, the majority of manpower got infected, rendering them unable to work at all. This caused a labor shortage in the business world. There was no labor that could be mobilized to keep the business running. In addition, there was no balance between the demand and supply chain, which further got worsened along with the emptying pockets of people. Along with the progression of the pandemic, the businesses could no more keep the balance between the demand and supply chain. Some products like toilet paper, hand sanitizers, masks, etc., were high in demand on the one hand, while on the other hand, manufacturing companies were struggling to supply to fulfill the demand due to the shortage of workers and materials. However, multiple businesses that were not in demand (like cosmetics, clothing, cinemas, hotels, clubs, restaurants, etc.) went into a severe slump with the future probability of permanent closure. As per a research study by Bartik et al. (2020), 43 percent of the businesses closed down temporarily. As per a report revealed by Yelp, 60 percent of the business worldwide shut down permanently due to the impact of Covid-19 (Sundaram, 2020). Furthermore, the business firms that experienced heavy losses due to the pandemic faced the problem of uncertainty in continuity due to a massive drop in sales and the inability to hire more personnel (Apedo-Amah et al., 2020). This not only brought physical damage to the business but also to the emotions and motivation to continue with such an immense failure. The people whose businesses went under completely during the pandemic period are now not even attempting to initiate a new business at all.

Positive Impacts of Covid-19 on Businesses

There is no doubt that the Covid-19 pandemic was an evil occurrence in every way to the global business and global economy. However, there are a few positive impacts put by the pandemic on businesses as well. The first and the well acclaimed positive impact have to be the use of digital platforms. With the restrictions in physical interactions, people all around the globe started to use digital platforms to carry out all the necessary functions like payments, orders, jobs, etc. Due to this trend, people have become more compatible with the usage of digital platforms. Meanwhile, the businesses were able to continue with their services with its help as well. Even with the limited manpower available, the businesses withstood the dire economic condition during the pandemic by basing all of their business online. The same businesses gained good acclamation, providing them with a strong base to continue their services online even after the pandemic as well. This helped it minimize the costs of setting up offices and shops as people got used to using their business products online (Kaushik and Guleria, 2020). In addition, there was a surge of businesses based on services like the IT solution companies. Since all of the employees were required to work from home, there was no decline in demand or supply of IT solutions. Rather, the IT solution-providing companies made well turnovers during the Covid-19 pandemic as well as established a stout prospect for the future as well (Tashanova et al., 2020). Another positive impact brought by the Covid-19 pandemic is the usage of digital technologies to conduct businesses across borders without having to go there personally (Schilirò, 2020). Due to this impact, the businesses were able to extend their services across multiple nations without much of a hassle while providing a whole new domain to their businesses. Such businesses now have a great prospects at present and for the future as well.

Conclusion

The outbreak of the Covid-19 infection made a huge impact on the global economy. As a result, from local businesses to multinational businesses, all the enterprises had to go through a rough patch during the time of the pandemic. Various businesses went under due to the absence of market and buyers. The economic crisis brought by the Covid-19 pandemic caused most businesses to collapse. While on the other hand, some other businesses rather flourished during this pandemic period. The product-based businesses were the ones who had to suffer a massive hit from the pandemic as compared to that service-based businesses. With the surge in the global pandemic infection, various negative impacts surfaced that caused disadvantages to the business sector. Some of the common impacts include; labor shortage, shortage of raw materials, restriction in inter-border exchange, closure of businesses, etc. however, the pandemic brought some positive impacts to the business sector as well. Some of them include; extensive use of digital platforms, the continuation of business online, cost saving due to not having to open a physical office or store, extension to business across borders as well, flourishing of IT solution companies, etc. Therefore, despite the fact that the covid-19 pandemic had numerous negative impacts on the business sector, it has some positive impacts as well.

References

Bartik, A. W., Bertrand, M., Cullen, Z., Glaeser, E. L., Luca, M., & Stanton, C. (2020). The impact of COVID-19 on small business outcomes and expectations. Proceedings of the national academy of sciences, 117(30), 17656-17666.

Apedo-Amah, M. C., Avdiu, B., Cirera, X., Cruz, M., Davies, E., Grover, A., … & Tran, T. T. (2020). Unmasking the Impact of COVID-19 on Businesses.

Schilirò, D. (2020). Towards digital globalization and the covid-19 challenge.

Kaushik, M., & Guleria, N. (2020). The impact of pandemic COVID-19 in workplace. European Journal of Business and Management, 12(15), 1-10.

Tashanova, D., Sekerbay, A., Chen, D., Luo, Y., Zhao, S., & Zhang, T. (2020). Investment opportunities and strategies in an era of Coronavirus pandemic. Available at SSRN 3567445.

Sundaram, A. (2020, September 16). Yelp data shows 60% of business closures due to the coronavirus pandemic are now permanent. CNBC. Retrieved August 2, 2022, from https://www.cnbc.com/2020/09/16/yelp-data-shows-60percent-of-business-closures-due-to-the-coronavirus-pandemic-are-now-permanent.html