The recent surge of world leaders touting nationalist agendas has come with warnings of the dangers of globalism and its detrimental effect on national economies.
Although much of the content of these warnings can be dismissed as populist rhetoric, it is true that a global economy necessarily implies dependencies between countries. With these dependencies comes risk: if one economy is affected, it could have a domino effect on other economies.
But what about when all economies are affected?
The Economic Consequences of COVID-19
The crisis presented by COVID-19 is proving to be one of the greatest (if not the greatest) challenges of modern times. Experts are scrambling to make predictions about the economic consequences of the pandemic, many of them fairly dire – for example, the OECD projects significant short-term GDP declines for many of the key players.
The truth is that we just don’t know what the economy will look like in the coming months, let alone in the coming years. We can expect with great certainty, though, that it will be a long road to recovery.
A new report by McKinsey & Company estimates that the US and Eurozone economies might not recover from the effects of COVID-19 until 2023, depending on the efficacy of countries’ public health responses.
If China’s trajectory is any indication, we can expect to see the hardest hits to the retail, industrial, and services sectors, along with steep increases in unemployment. Many are predicting a global recession in 2020 that may be more severe than the 2008 crisis.
The Silver Lining
However, not all predictions are gloomy.
Some experts believe the crisis may have a positive effect on the following areas:
– Technology: improvements in technological infrastructure for telecommuting and for online collaboration
– Energy and climate: improvements in energy independence and reduced emissions
– Health-tech: increased innovation in medical and healthcare technology
The bottom line: the future is uncertain – for everyone. When you’re not sure how your market is going to evolve, it might be time to consider new markets.
That’s where Gedeth can help – we’re experts in contingency plans. With a network spanning more than 50 countries over 5 continents and a track record of over 1,000 internationalization projects, we have the resources to help you succeed. Contact us if you’re ready to explore your options.