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Advances in Social Sciences Research Journal – Vol. 8, No. 12
Publication Date: December 25, 2021
DOI:10.14738/assrj.812.11521. Sooreea, R., & Sooreea, B. (2021). The Impacts of COVID-19 on Business Practice: Some Key Insights. Advances in Social Sciences
Research Journal, 8(12). 366-376.
Services for Science and Education – United Kingdom
The Impacts of COVID-19 on Business Practice: Some Key Insights
Dr. Rajeev Sooreea
Associate Dean & Associate Professor of International Business
Barowsky School of Business
Dominican University of California, USA
Dr. Brinda Sooreea
Lecturer in Economics
Department of Economics & Statistics
Faculty of Social Sciences & Humanities
University of Mauritius, Mauritius
ABSTRACT
This paper provides an overview of some of the key economic impacts of COVID-19
on business practice, especially in the U.S. In particular, we synthesize some of the
latest research, findings and developments from various academic literature and
business sources to provide a managerial perspective of the effects of this
pandemic. In addition, we show some characteristics of the so-called “new normal”
and what kind of innovative business opportunities could arise as a result of the
fundamental changes in the global economy. We conclude by highlighting how some
emerging countries like India could tap into such opportunities despite the dire
global situation.
Keywords: COVID-19, Pandemic, Economic Impacts, Business Practice, New Normal
INTRODUCTION: STATE OF THE COVID-19 PANDEMIC
As of September 2021, 4.7 million people have died worldwide due to the Coronavirus
pandemic (World Health Organization, 2021). 228 million people have been infected and 5.7
billion vaccine doses have been administered (See Figure 1).
Figure 1. State of the COVID-19 Pandemic
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Sooreea, R., & Sooreea, B. (2021). The Impacts of COVID-19 on Business Practice: Some Key Insights. Advances in Social Sciences Research Journal,
8(12). 366-376.
URL: http://dx.doi.org/10.14738/assrj.812.11521
Since the onset of the pandemic in China in late 2019, the global distribution of new COVID-19
cases has shifted dramatically during the past one and a half years. The proportion of new cases
is shifting from countries in Europe, to North America, Latin America, and other Asian
countries. However, the U.S. has been leading in terms of both the number of cases (40 million)
and deaths (651,000) (Centers for Disease Control and Prevention, 2021). With the recent
outbreak, India has registered more than 33 million cases and 440,000 deaths to date, and
Brazil ranks third with 21 million cases and 584,000 deaths.
Different countries are at different stages of the epidemic curve. Some countries such as South
Korea have been able to engage in strict containment of the disease. The U.S. is still trying to do
a balancing act. Some others such as those in Africa, who are dependent on international trade
and investment have opened up largely due to business and economic reasons, even though
their populations have not been adequately vaccinated. There is significant uncertainty around
the medium-term and long-term epidemiology trajectory of the virus spread, that is, there’s still
uncertainty about the peak and flattening of the epidemic (see Figure 2).
Figure 2. Epidemiological Trajectory of the Epidemic
In this paper, we set out to examine the economic implications of the COVID-19 pandemic on
business practice. Our goal is to present a synthesis of the latest research, findings and
developments from various academic literature and business sources to provide a managerial
perspective of the effects of this pandemic on businesses. In addition, we show some
characteristics of the so-called “new normal” and what kind of innovative business
opportunities could arise as a result of the fundamental changes in the global economy. We use
the U.S. economy as the reference point since much research and innovation particularly in the
business and economic space (in addition to the scientific spheres) have been conducted in
order to respond to the crisis. We conclude by highlighting how some emerging countries like
India could tap into such opportunities.
MACROECONOMIC IMPLICATIONS OF COVID-19 IN THE U.S.
Before we set out to explain the impacts of the COVID-19 pandemic on businesses, we highlight
some of the major macroeconomic effects of the crisis on the U.S. economy to emphasize the
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Advances in Social Sciences Research Journal (ASSRJ) Vol. 8, Issue 12, December-2021
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magnitude and severity of the crisis and also to remind us about the dire economic environment
and policy context in which businesses have had to operate.
The economic consequences of the COVID-19 pandemic have been very severe in the U.S. At
least 30 million people have lost their jobs. U.S. unemployment hit a high of 15% in April 2020.
Millions of other people have experienced a decline in their incomes. The U.S. Congress had
approved a $2.4 trillion package to combat the coronavirus crisis. The government spent
billions to bail out industries, billions to rescue small businesses, and billions to boost
unemployment assistance. That historical amount alone is larger than the economies, or GDP,
of most countries in the world. The 2020's federal government spending were around $4.7
trillion. To put things in perspective, Canada’s GDP is $1.7 trillion and India’s GDP is $2.9 trillion,
so this $4.7 trillion fiscal package would be the size of India’s and Canada’s GDP combined. In
addition, the coronavirus stimulus was expected to more than triple the 2020 budget deficit to
$3.1 trillion (15% of GDP) and push the national debt to 128% of GDP. That is a level not seen
since World War II (see Figure 3).
Figure 3. National Debt Effect of Coronavirus
The fiscal impacts from COVID-19 on local governments have depended on factors that have
been difficult to estimate. Public health expenditures skyrocketed due to the length of the crisis.
The development of treatments, vaccines, testing capacity, equipment (such as ventilators and
personal and protective equipment) and the behavior of the virus (variants) have added further
complexity and uncertainty to the crisis.
In terms of monetary policy, the U.S. Federal Reserve Bank was printing money to try to save
the economy from the COVID-19 crisis. The Fed's goal was to keep markets functioning. This
strategy also made credit easier to obtain since there was a bigger money supply and lower