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:

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:

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:

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:

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?

The Race to Save Lives: Vaccine Development Timelines

View the high-resolution of the infographic by clicking here.

Major advancements in medicine have led to a significant increase in average life expectancy, with vaccines being hailed as one of the most successful interventions to date.

In fact, the World Health Organization estimates that vaccines have prevented 10 million deaths between 2010 and 2015 alone. But while some were created and distributed in just over four months, others have taken over 40 years to develop. Then again, previous pandemics have petered out without any vaccine at all.

With approved COVID-19 vaccines soon to be distributed across the globe, the vaccine development process is being scrutinized by experts (and non-experts) the world over.

In the graphic above, we explore how long it has historically taken to bring a vaccine to market during pandemics dating back to the 1900s, and what the process entails.

Pandemic Vaccines of the Past

Although the assumption can be made that developing a vaccine for infectious diseases has become more efficient since the 1900s, that statement is not entirely correct.

It took approximately 25 years to develop a vaccine for the Spanish Flu which killed between 40-50 million people. Similarly, it was only last year that the FDA approved the first Ebola vaccine—an effort that took 43 years since the discovery of the virus.

But while scientists and medical experts have made headway in stopping major pandemics in their tracks, some of the worst outbreaks in history have yet to be cured.

Here is a closer look at the timeframes for vaccine development for every pandemic since the turn of the 20th century:

When it comes to the speedy development of a COVID-19 vaccine, funding has played a vital role. With case numbers growing at an alarming rate, demand and urgency for a vaccine are high. In the U.S., the government paid Pfizer and BioNTech almost $2 billion for 100 million doses of a safe vaccine for COVID-19. This level of support from governments the world over means that pharmaceutical giants have less financial uncertainties to deal with compared to other vaccines.

Even though the global endeavor to distribute COVID-19 vaccines is now underway, many experts are concerned that the pace of approval could compromise long-term safety—but there are rigorous steps a vaccine must first go through before it is approved.

The Journey of a Vaccine Candidate

On average, it takes 10 years to develop a vaccine. According to the CDC, there are six stages involved in the process from start to finish:

1. Exploratory stage: This stage typically consists of basic lab research that can last anywhere from 2 to 4 years.
2. Pre-clinical stage: This stage uses tissue-culture or cell-culture systems and animal testing to give researchers an idea of how humans might respond to a candidate vaccine.
3. Clinical development: Within the clinical development stage, there are three phases. Phase 1 examines the response of a small group of people to a candidate vaccine. Phase 2 involves giving the candidate vaccine to a larger group of people to study its safety, immunogenicity, proposed doses, schedule of immunizations, and method of delivery. In Phase 3, the vaccine is given to thousands of people to further test for efficacy and safety.
4. Regulatory review and approval: National Regulatory Authorities are responsible for the approval of vaccines in different countries. For example, the U.S. Food and Drug Administration’s Center for Biologics Evaluation and Research (CBER) regulates all U.S. vaccines.
5. Manufacturing: Typically, it can take anywhere from 6 to 36 months to produce, package, and deliver a high quality vaccine.
6. Quality control: Different batches of a vaccine are continuously tested by different authorities around the world to ensure its ongoing safety.

Despite these lengthy timeframes, the COVID-19 vaccines and subsequent candidates have overturned the conventional process due to their unconventional technology.

Innovative Technologies Driving COVID’s Cure

Even though there are no approved vaccines for other coronaviruses such as MERS and SARS, previous research into these diseases has helped identify potential solutions for COVID-19 using messenger RNA (mRNA) technology.

“The mRNA vaccine platform technology [which the Pfizer/BioNTech vaccine uses] has been in development for over two decades.”

—Dr Zoltán Kis, Imperial College London.

The technology instructs our bodies to produce a small part of the COVID-19 virus called a spike protein. This triggers the immune system to make antibodies to fight against it and prepares the body for an actual COVID-19 infection.

Containing COVID-19 Batch-by-Batch

Deployment of a safe and effective vaccine could have the potential to save millions of lives and prevent infection for many more.

Although some experts have criticized the speed of vaccine candidate approvals, the quality will be closely monitored on a batch-by-batch basis.

With the COVID-19 crisis showing no signs of slowing down, most of us continue to live in hope that the light is at the end of the tunnel.