How Does Covid-19 Affect Business (Businessmen's Point of View)

Business

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Covid-19

The year 2020 seems to be a year of hardship for the entire nation. In particular, employers in South Korea have been struggling with a sharp minimum wage hike and internal and external economic conditions, but as the Covid-19 was hit directly by the nuclear fist, self-employed people complain that it is harder than any of global economic impacts, and as the number of closures increases, the rate of closure and unemployment is growing frighteningly. As a result, the South Korean government paid emergency disaster assistance to the entire nation. At the end of August 2020, if the number of people who are Covid-19 positive is soaring, the government is even considering the second emergency disaster support fund.

Since Covid-19 is global pandemic and the first disease ever came out, each nation is struggling and fighting against this disease to minimize the impacts.

South Korean government have implemented social distancing, and it is divided by three levels depending on number of people who are affected by Covid-19 for certain period. I will discuss how Covid-19 affect business in Korea, and I believe its effect on business is similar to any nation.

Social Distancing

In society as a whole, social distinctions are the best way to prevent the spread of Covid-19, and no one will oppose it. Social distance from the business's perspective seems to be death sentence. First of all, since social distance is divided into three stages, let's take turns and see what's there.

Social Distance Step 1

In the first phase of social distance, groups and meetings are allowed as long as they comply with the quarantine rules. Sports events may limit the number of attendees, and multi-facilities may be allowed to operate regardless of the public or private sector, but may be restricted if necessary. Schools, kindergartens, and daycare centers are allowed but should also consider remote classes, and the company should minimize the concentration of work by utilizing flexible telecommuting.

From the first stage of social distance, we can expect multiple businesses to be hit. For example, if you're a restaurant owner near a company, even if companies work from home, fewer regulars come to work during lunchtime, and even if they know that Covid-19 is dangerous in closed space, they're reluctant to go to the restaurant, which will directly hit the restaurant's sales.

To do the social distance step 1, the daily number of confirmed patients should be less than 50.

Social Distance Step 2

In the second stage of social distance, gatherings, and events of 50 or more indoor and 100 outdoor people are prohibited. Sports events are conducted without regard, public multi-purpose facilities are suspended, high-risk facilities among private multi-purpose facilities are suspended, and other facilities are forced to comply with quarantine rules. In the case of schools, kindergartens, and daycare centers, the number of students attending school is reduced and remote classes are conducted, and the company should limit the number of employees more than the first stage of social distance.

The business owners will be hit harder than phase one.

In order to do stage 2 of social distance, the daily confirmed number of people should be 50 or less than 100.

Social Distance Step 3

In the third stage of social distance, gatherings, and events of 10 or more people are prohibited. It's the highest level of social distance, so it's a very strong response. Sports events are suspended, public multi-purpose facilities are suspended, high-risk facilities are suspended, and other facilities are forced to comply with quarantine rules. In the case of schools, kindergartens, and daycare centers, they close or take remote classes, and the company must work from home except for the required number of people.

Business operators are thus facing a risk of closing their businesses, which will be hit harder than the first and second phases. As a result, there are voices calling for the implementation of the second emergency relief fund immediately if the third stage of social distance is implemented.

In order to do stage 3 of social distance, if doubling occurs twice a week with a daily confirmed number of 100 to 200 people for two weeks, step 3 of social distance will be considered. Doubling here refers to more than twice a week when the daily confirmed number of patients doubles.

Essential Industrial Facilities

Even if social distinctions are applied, employers may be excluded if their businesses are classified as essential industries. For example, if you're in a business that's essential to life, just as people can't live without air or water, no matter how much Covid-19, if certain essential industries stop, it's an exception because it's a big blow to the lives of the entire nation. That doesn't mean business owners who operate essential industries can neglect the quarantine rules. 

In the aftermath of Covid-19..

When will Covid-19 end? Most people agree, but the Covid-19 will not end in a short period of time, and business owners should think of it as a long-term war and prepare for it. All over the world, we're working on the Covid-19 vaccine. Russia claims to have already developed the Covid-19 vaccine. However, even if Covid-19 vaccines are developed, distributed, or imported in Korea, most people will likely refuse to be vaccinated. It's the first disease in history, so how reliable can people be as it has been prepared, developed, and came out to market so quickly? Like flu shots, it will take a really long time for a Covid-19 vaccine to gain national trust, so this situation could last for years without really ending in a few months. As the amount of damage and duration that businesses have to bear is enormous, businessmen have to think a lot about how to survive this situation.

Fourth Industrial Revolution

So far, the Industrial Revolution has faced whether humans want it or not, and those who respond well and take advantage of it have accumulated great wealth, and those who don't have it have experienced failure due to competition. Fourth Industrial Revolution Prior to the Covid-19 crisis, industry leaders have been talking about the Fourth Industrial Revolution, and Covid-19 is accelerating the Fourth Industrial Revolution. With various technologies including artificial intelligence (AI) enabling non-face-to-face and people taking non-face-to-face for granted, Covid-19 has forced companies to do so in the industry, and in the aftermath of Covid-19, the fourth industrial revolution will begin in earnest, and business sectors that are out of date will fall behind in competition.

The ground hardens after the rain...

You've heard that the ground will harden after it rains, right? I think that's right for all business owners at this time. Now suffering from an unheard-of disease all over the world. As a result, countless self-employed people not only in Korea but also in the globe have collapsed, and I think many people are still thinking about how much longer they can endure in the future due to the Covid-19. If we continue to hold out, once the competition is reduced and the Covid-19 is over, the big opportunity will come and the know-how we have gained from overcoming this unprecedented storm will be at the bottom of any economic crisis. However, as Covid-19 speeds up the industry's change, it is necessary to judge whether your industry will survive or disappear, and to give up boldly if it is judged that it is not suitable for an era that will change after the end of the Covid-19 is over.

That's all for today.

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