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The Economic Impact of COVID-19, According to Business Leaders

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The Economic Impact of COVID-19, According to Global Business Leaders

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The Economic Impact of COVID-19: Positives and Negatives

The global pandemic has disrupted business activities worldwide. But COVID-19’s economic impact has varied across regions, and the consequences have been largely dependent on a region’s economic position.

Using survey data from the World Economic Forum’s 20th Global Competitiveness Report, this graphic showcases the economic impact of COVID-19 worldwide. This year’s survey was conducted between February and July 2020 and includes responses from 11,866 business executives across 126 economies.

As you’ll see, the data was collected with the specific focus of contrasting the pandemic’s effects on developing economies compared to advanced economies.

Top Negative Impacts of COVID-19

By comparing business leaders’ responses in 2020 to their answers over the last three years, some clear trends have emerged.

In advanced economies, the top negative economic impact of COVID-19 has been a decline in competition, followed by reduced collaboration between companies and a growing challenge in finding and hiring skilled workers:

RankFactor% Change (2020 vs. 3-Yr Avg)
1Competition in network services-2.9%
2Collaboration between
companies
-2.6%
3Competition
in professional services
-2.3%
4Competition in retail services-1.8%
5Ease of finding skilled employees-1.5%

What’s driving this reduced competition in advanced economies?

One factor could be the increased use of online platforms. Ecommerce is heavily dominated by a select number of retailers. Because of this, bigger retailers like Amazon have seen massive boosts in their online sales, while many smaller brick-and-mortar businesses have been struggling.

While negative impacts on advanced economies are centered around market concentration and talent gaps, developing countries have faced different problems this year, like increased crime and governance issues:

RankFactor% Change (2020 vs. 3-Yr Avg)
1Business costs of crime and violence-2.5%
2Judicial
independence
-2.4%
3Organized crime-1.2%
4Extent of market dominance-0.6%
5Public trust of politicians-0.4%

It’s important to note that in the 2018 and 2019 surveys, organized crime and business costs related to crime and violence were trending downward. Because of this, the World Economic Forum suggests that we consider this year’s increase in these areas as as a temporary COVID-induced setback rather than a long-term issue.

Top Positive Impacts of COVID-19

Despite the struggles brought on by COVID-19, the pandemic has also triggered positive change. In fact, business leaders perceived more positive developments this year than negative ones.

In advanced economies, the top positive impacts were government responsiveness to change, followed by internal collaboration within companies:

RankFactor% Change (2020 vs. 3-Yr Avg)
1Government's responsiveness to change8.2%
2Collaboration within a company4.6%
3Venture capital availability4.4%
4Social safety net protection4.2%
5Soundness of banks4.0%

Interestingly, internal collaboration improved while external collaboration got worse. This is likely because companies had to adapt to changing work environments, while also learning how to collaborate with one another through remote working.

Internal collaboration didn’t just improve in advanced economies. In fact, developing economies experienced several of the top positive impacts that advanced economies saw as well:

RankFactor % Change (2020 vs. 3-Yr Avg)
1Collaboration within a company6.9%
2Government's responsiveness to change6.8%
3Efficiency of train transport services5.9%
4Venture capital availability5.9%
5Country capacity to attract talent5.8%

While perceptions on official responsiveness to change increased, public trust in politicians decreased slightly. This indicates that, while government responses to COVID-19 may have been received well in developing economies, overall feelings towards political leaders did not waiver.

How Have Countries Stayed Strong During the Pandemic?

While the impacts of COVID-19 varied between advanced and developing economies, business leaders across the board identified some common features that helped countries remain resilient:

  1. Economic digitization and digital skills
    Social distancing has been a key response to the pandemic. Because of this, countries that were set up for remote work have fared better than others. Netherlands, New Zealand, and Finland are a few examples.
  2. Safety nets and financial soundness
    Countries with established support systems for companies and citizens were in a better position to keep their economies afloat. Denmark and Norway provided much-needed support to their households, while Taiwan and the U.S. were able to aid businesses thanks to strong financial systems.
  3. Governance and planning
    Balancing health priorities with economic and fiscal policies was a delicate dance this year. Countries that provided relatively stable political frameworks were Singapore, Luxembourg, Austria, and the United Arab Emirates.
  4. Healthcare system and R&D
    A strong healthcare system meant widespread access to health services needed during the pandemic, as well as established public health protocols. Japan, Spain, and Taiwan were good examples of this.

Will these key features of competitiveness remain effective measures of a strong economy in 2021, or will our benchmarks for success evolve post-pandemic?

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Charted: Stock Buybacks by the Magnificent Seven

While Apple carried out $83 billion in stock buybacks over the last four quarters, Amazon and Tesla didn’t report any.

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Nightingale chart of stock buybacks for the magnificent seven stocks showing that Apple had the most buybacks of $83 billion.

Charted: Stock Buybacks of the Magnificent Seven

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

By 2025, Goldman Sachs predicts that total U.S. stock buybacks will exceed $1 trillion. The bank sees this growth being driven by strong tech earnings growth and lower rates.

But what are buyback amounts like for the largest tech companies today?

This graphic looks at the total value of shares each Magnificent Seven company has repurchased in the last four quarters using data from their latest financial statements.

What is a Stock Buyback?

A stock buyback is when a company buys their own shares to reduce the number of available shares on the market. Companies may choose to buy back stock to return value to shareholders. Having fewer shares available improves earnings per share, and may drive up the stock price.

Buying back stocks can also come with risks, such as using up cash that would otherwise be put toward growing the business.

Stock Buybacks of Tech Titans

We gathered data from company financial statements to see how stock buyback amounts differed among the Magnificent Seven. Each total represents what companies reported from June 1, 2023 to June 1, 2024.

As we can see, the tech companies in the Magnificent Seven have been the ones buying back their stock over the past year.

CompanyTotal Stock BuybacksBuybacks as a % of Market Cap
Apple$83B2.8%
Alphabet (Google)$63B2.9%
Meta$25B2.0%
Microsoft$20B0.6%
Nvidia$17B0.6%
Amazon$0B0.0%
Tesla$0B0.0%

Values rounded to the nearest billion. Company market caps are as of June 6, 2024.

Apple had by far the most share repurchases, raising its diluted earnings per share from $1.26 to $1.53. Going forward, Apple authorized an additional $110 billion for share repurchases, a U.S. record. The board says the repurchases are in light of their “confidence in Apple’s future and the value we see in our stock.”

On the flip side, both Amazon and Tesla did not issue stock buybacks in the last four quarters. Amazon’s CFO Brian Olsavsky recently emphasized the company’s strategy of reinvesting in the business. He says Amazon is focused on reducing debt and building data centers to take advantage of AI.

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