A Look Into How Industries Are Surviving A Pandemic
Implications for some of society’s most important industries
A/N: This article was co-written between Ryan Lam, Allen Uy and I.
If you’re anybody anywhere right now, you know about the coronavirus. Because of fear-mongering and culture-shocking-cuisine, the social panic has been around for a while — but after being labeled a pandemic, tensions have shot through the roof. With governments advocating for isolation and social distancing, almost (but hopefully) everyone is locked inside their homes.
We know first-hand that the virus has significantly impacted our day-to-day lives, but what’s less discussed is COVID’s impact on industries. Current and future implications are both interesting and scary. While countries worry about their economies, consumerism has obviously taken a decrease and employees are scared to go to work. Grocery stores and Chinese restaurants might take up the headlines for those impacted, but several others are prominent as well. Companies are releasing 5G robots as pseudo-hospital-assistants, and subways are being bleached on a daily basis.
COVID’s presence is being felt everywhere — and tons of industries need to accommodate.
Let’s take a look at some of them!
Mining
If you think about a field that would be disrupted due to a virus, mining probably wouldn’t be it.
Like most people, miners are being encouraged to wash their hands more frequently and have begun to stockpile masks, cleaning supplies, and restricting access to mine sites. Companies like Barrick Gold Corp. are stockpiling key commodities in fear of price changes, along with the supply and demand for the minerals used to power the global economy.
“The reality is that it’s going to become quite hard to operate beyond the two weeks” — Grimbeek, President and CEO at Trevali Mining Corporation
Some mining insiders note that contagion at mines poses a high risk because the remote location often means there is limited access to health care.
Supply and Price Changes
Metal analysts have also said there are other long term business risks from continuing to operate during the pandemic, including glut (abundant supply) of various metals. Yet, “In the midst of arguably the single-largest demand shock in our lifetime, the production side of the metals and mining sector, in general, continues to hum along,” David Gagliano, an analyst with BMO Capital Markets.
China is a major consumer of raw materials due to its large manufacturing sector. A drop in Chinese consumption will bring down oil and gas prices. COVID-19 will likely disrupt demand for steel through hindering manufacturing activity or potential closure of Chinese smelters due to quarantine needs, something we are seeing as much more likely in recent days.
Highly Valued Minerals
Precious metals producers are likely to benefit from COVID-19 fears, as risk-averse investors transition into safe-haven assets such as gold, silver, and palladium. In February, gold reached its highest price since March 2013 at over $1,600 USD per ounce.
We may see an acceleration towards the path of autonomous mining, in previous years uptake of automated mine solutions including self-driving haul trucks and remote operations centers has been slow but steady.
Now that the outbreak has made the immediate future of several mining operations around the world uncertain, there may be an increased appeal and demand for solutions to reduce the human workforce at mine sites, if only to prevent future crises from having such a detrimental effect on mining companies.
Medicine
Unsurprisingly, the medical industry is in an important position — they’re key for limiting the pandemic. Many companies have started creating crisis management teams to allow faster decision making, and begun implementing flexible work arrangements for employees. They’ve also started tracking health, travel, and location data for employees in order to restrict spread.
The largest priority for mitigating impact is strengthening collaboration with local governments and hospitals to help control COVID-19. Companies are also shifting towards digital by investing in online business, implementing new technologies to sustain client services, and speeding up digital transformation. The need for good telemedicine (virtual medicine) is becoming more evident as hospitals begin to suffer strain from patient overload.
The 3 prominent challenges listed by companies: halt of marketing and sales, market fluctuations due to change in demand, and reduced effectiveness of remote working.
The drop in medical and drug presentations events, as well as people not going to clinics can be pointed to as the cause. Companies are preparing for impacts to revenue and trying to make revenue forecasts. Many remain unsure, but around 20% believe sales will catch up later this year and another 20% believe revenue may experience a drop of up to 20%.
Systemic Strain
According to several epidemiological studies, we can expect a doubling of cases every 6 days. The U.S. has about 2.8 hospital beds per 1,000 people, with a population of 330 million, this is about 1 million hospital beds. At any given time about 68% of them are occupied, which leaves about 300,000 beds available nationwide. With these numbers, by the end of April we might expect 1 million cases in the US, more than the current system is prepared to handle.
Not to mention if medication shortages occur, people with chronic health conditions that are usually easily managed could find themselves being hospitalized as well. Many people are rushing to make up for a shortage of ventilators and other medical equipment. And although their stockpile of 12 million N95 masks are intended to be single-use only, a Stanford study has found somewhat effective decontamination methods to be used in emergencies.
Technology
Outbreak Prediction
Times of need are also oftentimes of great innovation, but preventative measures tend to be better than reactionary ones. Bluedot managed to do just that by previously predicting the Zika virus to spread to Florida in 2016, 6 months prior. They use NLP (natural language processing) to analyze statements from a variety of sources: official public health organizations, digital media, airline ticketing data, livestock health reports, and population demographics, continuously every 15 minutes.
Bluedot flagged 27 pneumonia cases associated with a market that had seafood and live animals in Wuhan. Additionally, they correctly identified cities highly connected to Wuhan and 11 of the cities at the top of the list were the first to see cases.
Virtual Conferencing
With many places experiencing workforce impacts, many are turning to tech-oriented solutions. HTC hosted the first full VR conference, V2EC. Who needs social distancing if you have VR?
Drones and Robotics
CloudMinds is deploying robots in hospitals that can clean/disinfect, deliver medicine to patients, and measure temperature. They cost between $17000 to 72000 each and have shown reliability in assisting patients without person-to-person contact. Hospitals are employing infrared thermometry systems to check body temperature as people enter hospitals, alerting medical staff is symptoms are present.
Drones used in agriculture to spray pesticides are being repurposed to spray disinfecting chemicals in the streets of China, which are up to 50 times more efficient that people do manual spraying. Medical samples are being transported via drone, one such case started at the People’s Hospital of Xinchang County, Zhejiang Province and flew to the Chinese Center for Disease Control and Prevention 3 km away. It ended up cutting delivery time from 20 minutes down to 6.
Business Impacts
The Big 5: Apple, Microsoft, Amazon, Alphabet, and Facebook, have lost combined $1.3 billion in value since Feb 19. The tech industry, which is worth $3.9 trillion globally, was forecasted to have a 5% growth this year. Right now even 1% growth would be considered optimistic. With not much else to do, Netflix downloads jumped 66% in Italy, 35% for Spain, and even in the US by 9%. iPhone app sales grew 18 percent to roughly $690 million and Android app sales rose 5 percent to roughly $360 million.
Overall, the workspace is becoming more and more decentralized as companies find ways for employees to do remote work. Whatever can be automated likely will be in order to reduce the strain on healthcare systems. We may see the rise of VR becoming a much more popular medium as it may replace some in-person events and has advantages only possible in that world.
Economics and Financial Markets
Equally as important, the banking and financial industry is the backbone of the economy. Since a good economy depends on a circular flow of income, as industries start to layoff employees, halt/sell of investments, operate conservatively, and potentially default on loans, they are stopping the flow of the economy.
To encourage other industries to borrow money and to keep the economy afloat, many countries are lowering their interest rate. Doing so allows industries to borrow money at a dramatically lower price.
As workers are losing their jobs or getting hours cut, they are applying for unemployment insurance. There were approximately 500,000 applications for unemployment insurance last week, as opposed to 27,000 applications for the same week in 2019.
Direct Economic Impact
As industries are getting hit, it is obvious that this will show in the financial stock markets. The economy is currently a bear market, where the market has fallen by 20%+. NASDAQ Composite has fallen more than 29% (-2,950 points) and the S&P 500 has fallen more than 33% (-1,130 points). Gold and oil have fallen to all-time lows of $1476 and $26.22 respectively and large companies (GOOGL, AAPL, MSFT, etc.) have lost 20%+ of their market cap. With the uncertainty of this situation and the upcoming 2020 US Presidential Elections, a recession is predicted to occur.
E-commerce
As the public is warned to stay home, people are turning to online shopping (e-commerce) to buy their essentials. Due to social distancing, the influx of shoppers at physical stores has dramatically decreased, while the number of downloads of grocery apps has increased by 218%. In China, the center of the outbreak, 50% of consumers have turned to online shopping with Vietnam and India at 57% and 55% respectively.
Although these numbers may seem good for a company’s growth, in the context of the COVID-19, they bring a lot of trouble to self-employed drop-shippers, FBA sellers, Shopify sellers, eBay sellers, and anyone who owns an e-commerce store.
Impact on Suppliers
For a start, these sellers will have delayed shipments to both their facilities and to their customers. For most sellers, shipments that are expected to arrive in 30–35 days can be expected to be late up to 45 days. Due to shipping policies from many transaction-processing companies, customers may appeals and chargebacks, potentially causing the e-commerce store to operate at a loss.
Due to closed borders and restricted air transit from many countries, the supply of air-carried packages has decreased while the demand has increased, shipping costs will cost a premium.
E-commerce stores may decide to pull their ad campaigns on platforms such as Facebook, Google, and Microsoft due to market reactions. Due to layoffs and high unemployment, families will start living conservatively, causing a decrease in general consumer spending. These families will not be looking to buy non-essential items, causing e-commerce stores to pull their ad campaigns from various platforms. All these factors together will greatly cause many e-commerce stores to operate at a loss.
Transportation and Travel
Two more key industries that are reeling from COVID-19 are transportation and travel. These services are essential for several people but have shown to be hotspots for coronavirus transmission.
Risk Levels with Public Transportation
Right now, public health officials are stressing the importance of good hygiene — especially for people who use transit often. This is because the environment of transportation systems make them susceptible to the spread of COVID; hard surfaces, lots of people, poor ventilation.
Epidemiologists say that the risk of infection on public transportation is difficult to gauge. But reasons to be cautious are definitely valid; a woman who tested positive for COVID-19 was on a bus in Toronto. Interestingly enough though, in NYC, a 2011 study of a possible influenza outbreak found that 4% of transmissions occur on the subway. While the transit ecosystem is vulnerable to coronavirus, certainty around the risk level is unclear.
Protecting Yourself from COVID-19 on Public Transit
Isaac Bogoch (infectious disease specialist) recommends “impeccable hand hygiene” when taking public transit. If you touch hard, high-contact surfaces, don’t touch your face and immediately wash/sanitize your hands. Social distancing is still important as well — keep a 3–6 feet radius from everybody else whenever possible.
There are also systematic measures within the transportation industry being taken to reduce infection. The APTA (American Public Transportation Association) is actively implementing:
- Engineering Controls → separating people from contamination, like barriers between drivers and passengers
- Administrative Controls → training, plans, policies and procedures that reinforce ways to reduce infection
- Personal Protective Equipement → gloves and respiratory protection
- Environmental Hygiene → cleaning of stations, vehicles and workplaces to minimize surface contamination
This segues into the next important area: the overall transportation industry response to the coronavirus.
Public Transit Response
Alongside the protocols above, APTA have actively been monitoring the impact of COVID throughout the US, providing resources related to transport, and opened an email hotline. Around the world, transportation providers have large responsibilities; preventing the spread of the disease, providing services, managing workforce impacts and providing crisis communication. This is because public transit likely has to continue during this public health emergency — and reasonably accommodate people who are infected.
Currently, reduction of contact is being implemented highly; less ticket inspection, protected customer service staff and rear-door boarding to protect drivers.
In terms of cleaning, bleach and antiviral treatments are extremely common. In NYC, every subway car, bus, or commuter train is disinfected with bleach ever 72 hours — although the mayor discourages ridership.
Meanwhile, San Francisco, LA, Seattle, Boston, and Chicago are wiping down buses and subways with disinfectants. Their transit systems carry about 405, 000 daily riders on average each weekday … and ridership has dropped 9% percent. On the global level, Transit usage has collapsed in China after travel restrictions.
Speaking of travel…
The Risk of Travelling
Risk levels for the travel industry are estimated to be much higher and are easier to gauge — considering big airports and cruise ships are crowded areas with people from all walks of life. Because of this, revenue losses have been massive. The International Air Transport Association estimates that the industry could lose up to $113b in revenue this year. Additionally, according to China’s Ministry of Transport, there were 79.5% fewer travel trips this Lunar New Year than last time.
Travel Industry Response
We now know the effect from a consumer’s standpoint is pretty noticeable — but what’s less known is how the industry’s been responding.
For America, the TSA recently put out a map of airports where TSA officers have tested positive for COVID. As of March 22, there have been 24 cases.
They’re now allowing one hand sanitizer container (up to 12 ounces) in carry-ons until further notice as well. Also, the CDC released this health alert:
In Canada, governmental measures for travel have been uniquely drastic. A pandemic health notice has been released to all Canadians, with cruise travel being highly discouraged (hotspots for COVID activity). However, imports and delivery services that require travel will continue. If you choose to travel for other reasons, while discouraged overall, social distancing is highly promoted.
As for other countries, some are banning travel (Somalia), and some highly discourage inessential trips (UK, Canada). On a business level, Emirates have suspended most passenger flights because of the pandemic, while United Airlines is operating some to help displaced customers get back to the US.
Leisure, Hospitality, Tourism
As travel and public events are restricted (and even banned), the leisure, hospitality, and tourism industry has seen a dramatic drop in revenue. With the flooding cancellations coming in, hotel occupancy rates have dropped a whopping 72.1% with room rates dropping to an average of $188.59. Some hotel chains have even been converted into emergency safe spaces to house homeless people.
Hospitality
Hotels have been reducing their staff by up to 80% and an estimated 23% of hotels in BC have already been closed. Staff members have quit due to COVID-19 fears, and according to Ingrid Jarrett, CEO and President of BC Hotel Association, if COVID persists to the summer, approximately 30% of businesses will be closed. As hotels and vacations are seen as a luxury, it will take a while for everything to normalize.
Tourism
Countries in Europe and Asia-Pacific that are dependant on tourism (7–20% of GDP) are seeing a slowdown in their economies. With social distancing measures in place, people have stopped eating out, causing restaurants, bars, and eateries to lose revenue. Those who work as guides in museums, parks, and in the city have lost their jobs. Chinese tourists generate $2B annually in Canada, but with the ongoing COVID-19 situation, Tourism Minister Melanie Joly has said revenue is now expected to be only $550M.
Food Service
In India, restaurants saw approximately a 20% reduction in footfall in the first week of March. Restaurants have also seen a drop in revenue of up to 45% with large restaurant chains (such as McDonald’s), losing 21.7% of daily visits. Restaurants are seeing a very complex problem since employees are unable to work at home. Luckily, one of the precautions that restaurants are using is the denial of handing cash-transactions. Starbucks has even removed all furniture in their locations to discourage customers from staying and waiting in the store.
Clearly, tons of industries that people rely on are drastically being affected by the coronavirus. In summary, it’s important to maintain good hand hygiene, minimize social interaction, not touch common surfaces and stay home. While the economy and businesses are vastly being impacted, the health of you matters more. So stay safe, and stay cautious.
Key takeaways
- The mining industry is stockpiling items and demand is fluctuating
- Technology, the economy, and the medical industry are uniquely important
- BlueDot is leveraging AI for outbreak prediction, CloudMinds are deploying 5G robots for hospital assistance
- Transportation and travel systems face constant disinfection and potential closure, but need to stay open in most communities.
- Avoiding transit if possible is recommended, however, taking transit with cautious and isolative behavior minimizes risk.
- Hotel staffing and restaurant visits have drastically decreased
- Maintain good hand hygiene and socially distance yourself!
Hey! I’m Joshua — someone super curious about the role technology plays for people during COVID-19. If you enjoyed this article, please feel free to reach out to me on LinkedIn or at joshuapayne1275@gmail.com.
Thanks for reading!
