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.
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 a reduced collaboration between companies and a growing challenge in finding and hiring skilled workers:
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 a temporary COVID-induced setback rather than a long-term issue.
Despite the struggles brought on by COVID-19, the pandemic has also triggered a 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.
The 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 of 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.
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:
Will these key features of competitiveness remain effective measures of a strong economy in 2021, or will our benchmarks for success evolve post-pandemic?
Source:The Economic Impact of COVID-19, According to Business Leaders
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