It’s evident that COVID-19 is taking, and will continue to take, a toll on global trade efforts. All countries from all continents over the world are struggling to keep up economically during this time where almost all industries are frozen. The World Trade Organization even states that no matter how optimistic the situation is, international trade will definitely suffer a large drop.
There is further reason to believe that competition, both internationally and domestically, will be drastically affected as well. This can be attributed to things like transport and travel lockdowns many, if not all, countries are implementing, all the way to things like economic stagnation within countries as many businesses close up operations for the duration of the pandemic.
In a post COVID-19 world, it’s predicted that most governments will adopt a more protectionist policy, in order to revive the local economy. Many countries and even the European Union have pulled out of programs for foreign investments, or are currently revisiting their foreign investment laws. The free trade that globalization has championed is definitely going to put on hold for the time being.
What does this mean for local businesses?
With international competition and foreign investments slowed down, all attention is on the domestic economy and especially, the competition in local industries.
The past few weeks have shown multiple large-scale corporations making great strides in donating to frontliners, promising to not lay off employees, and providing financial assistance to their workers. While these are great initiatives, smaller companies and enterprises simply don’t have the cash reserves to manage the company’s workers while halting operations. We live in times where generosity is truly tested, with many small time business owners refusing to lay off employees during this crisis. However, the fact remains that with little to no income generated during this time, spending cash is limited. Governments need to be able to keep up subsidies for small businesses in order to keep them afloat.
It’s ensured that after the pandemic, businesses of all sizes will be racing to get their rate of operations and income at least somewhat nearer to what it was pre-COVID-19. All businesses are sure to have great losses during these times. However, when comparing the losses and financial capabilities of corporations to small-time business owners post-pandemic, small time entrepreneurs will have much less capital to invest in things like increased marketing, “promo deals” for their products to attract more customers, etc.
Economists everywhere already predict that the greatest casualty in the business world post-COVID-19 will be small and medium-sized enterprises and their employees.
What does this mean for me?
As responsible consumers, the call to action has never been clearer — we have to support local businesses now, more than ever before. This is not only to support the entrepreneurs behind them, but the employees that depend on these businesses for their source of income.
Groups around the world have recognized this dark reality and are starting a movement to #SupportLocal. Even Instagram introduced a new feature to promote local businesses to its follower base in an effort to keep these businesses alive.
While we prepare for a transition back to a “new normal”, let’s not forget to not only take care of ourselves, but also to support the many others in our communities who are struggling with the effects of this pandemic. It’s only then that #WeHealAsOne.