Search

COVID-19: Implications for business

COVID-19 and the great reset: Briefing note #37, January 6, 2021

One year ends, another begins. From disruption to transition, McKinsey research traces the pandemic’s arc.

Special ReportCOVID-19: Facts and Insights, October 30 Full Report (129 pages) Article (3 pages)

One way or another, 2021 is likely to be the year when the world transitions to the next normal. As executives take stock of what’s just happened, and what’s to come, they won’t go far wrong by considering the ten trends that authors Kevin Sneader and Shubham Singhal analyzed and the effects of those trends on the global economy, business, and society. First up in the next normal: “revenge shopping” as many consumers open their wallets for goods and services they’ve done without recently. Other trends to ponder—none traditionally associated with recessions—include startling growth in the number of new businesses, an incredible rise in productivity, permanent changes in consumer behavior, and the “bio revolution,” which may soon create different mechanisms of production for 60 percent of the global economy’s physical inputs. One thing’s for sure: 2022 won’t look anything like 2019.

Our recent survey of global executives focused on the here and now: even in the short term, optimism is growing. Our December 2020 survey of global executives detected the highest levels of optimism since the COVID-19 pandemic began (exhibit). Executives in Europe, North America, and developing markets report concerns more acute than others did; those in Europe, for example, remain especially worried about unemployment. But even these respondents are less downbeat than they were in the previous quarter. Looking ahead, the respondents’ expectations for their home economies are increasingly positive: 61 percent say global economic conditions will be better six months from now, up from 51 percent in mid-October.

Exhibit

The United States is the global economy’s linchpin; it’s no surprise that the rollout of COVID-19 vaccines there is under intense scrutiny. Our latest research details five challenges to at-scale vaccine adoption. Chief among these: consumer skepticism. According to our most recent US consumer research, 63 percent of respondents are cautious about the vaccines or unlikely to be vaccinated. The antidote? Conviction, convenience, and costlessness. If the 100 million Americans who are uncertain about the COVID-19 vaccine can be brought around through a combination of education, easy access, and affordability, the benefits will be enormous. We estimate that new investment of about $12 billion, in addition to current programs, could bring forward the pandemic’s end by three to six months and generate an additional $800 billion to $1.2 trillion in US GDP.

Also this week, our industry researchers examined four topics: consumers’ uptake of US fintech offerings, the resilience imperative for medtech supply chains, B2B sales in Brazil, and the future of insurance in Africa.

Finally, we closed the books on 2020 by offering three summaries of a difficult, often desperate, and, yes, disruptive year.

4 views0 comments