research about online business in pandemic

Microbusinesses flourished during the pandemic. Now we must tap into their full potential.

Jeremy hartman and jeremy hartman vice president - venture forward joseph parilla joseph parilla senior fellow & director of applied research - brookings metro.

January 4, 2022

Amid the economic tumult of the past two years—with nearly 30% of small businesses closing their doors at the height of the pandemic, workers quitting their jobs at historic rates , and ongoing disruptions to the global supply chain—one positive trend shined through: A record number of Americans started online microbusinesses.

According to Venture Forward, a multiyear research program from GoDaddy to quantify this entrepreneurial activity, Americans created 2.8 million more online microbusinesses in 2020 than in 2019. Online microbusinesses are defined as businesses with a discrete domain name and an active website. About 90% of these online businesses employ fewer than 10 employees, and nearly 17% of the 20 million microbusinesses tracked in the U.S. were started after the onset of the pandemic, per Venture Forward’s latest national survey .

This increase aligns with larger entrepreneurial trends. The number of unincorporated, self-employed Americans reached 9.44 million in October—one of the highest numbers since the 2008 financial crisis, only trailing July and August of this year. This came one month after 3% of the U.S. workforce (4.4 million Americans) quit their jobs—an all-time high .

There are several factors that may explain the online microbusiness boom. Soaring unemployment rates in the early months of the pandemic forced millions to look for new income streams. Pandemic relief checks likely helped some people start new businesses. And compared to previous recessions, potential entrepreneurs now have more widely available broadband, greater digital fluency, and a more mature e-commerce marketplace that simplifies website creation, marketing, and online sales. Today, it’s much easier to translate an artisanal hobby or creative passion project into an online venture than it was in 2008.

Recent research from Venture Forward suggests that these lowered barriers—which make it easier for microbusinesses to generate new jobs and income—help the economy weather economic shocks such as the pandemic. Many recently launched microbusinesses are either too new or too small to show up in traditional economic data such as jobs reports or new business registrations. But a unique dataset of 20 million microbusinesses with domain names registered with GoDaddy has unveiled their economic impact, which was largely invisible to policymakers.

Working with the Venture Forward data and financial support from GoDaddy, economists at UCLA have shown that a 1-percentage-point increase in the Microbusiness Index (a composite of factors that measure online microbusiness success) can cause a 0.12-percentage-point reduction in unemployment. And while 39% of microbusiness founders Venture Forward surveyed said their enterprise is currently a supplemental source of income, 67% of them would like their microbusiness to become a full-time job. Currently, about a quarter of the surveyed microbusiness owners earn more than $4,000 per month from their venture.

After the onset of the pandemic, online microbusiness ownership grew fastest among groups hit hardest by the economic fallout. Black owners account for 26% of all new microbusinesses, up from 15% before the pandemic. Similarly, women-owned businesses surged to 57% of new microbusiness starts, up from 48%. Microbusinesses also became a more popular option for those without a college degree, rising from 36% to 44%.

It is not abnormal for “necessity entrepreneurs”—individuals pushed into entrepreneurship after job loss or income decline—to pivot to self-employment during recessions. But this microbusiness surge is too large to be fully explained by necessity entrepreneurship and warrants greater attention from policymakers to understand how these nascent owners can be supported. Like companies of all sizes, access to capital is a top concern when getting started, but 63% of microbusiness owners who started after 2020 needed less than $5,000 to get going—an amount that traditional banks are not optimized to provide. Universal broadband access remains critical for an increasingly web-native wave of entrepreneurs. And as Brookings Metro nonresident senior fellow Pamela D. Lewis argues , local economic development strategies may look different for microbusinesses than for larger businesses, requiring distinct interventions related to networking, practical assistance, and mentoring.

Ultimately, a shift in mindset is as important as policy change. Many local economic growth policies focus on target industries or chase well-documented metrics such as job creation. But microbusiness owners do not fall neatly into traditional economic development strategies. They do not think of themselves as part of a larger industry, and generally are not looking for a job. They are following a passion—not an industry—and need access to skills training, capital, and affordable broadband rather than a job fair.

Policymakers at all levels of government have tried to help the country’s small businesses survive the pandemic, but this online microbusiness boom has occurred with almost no consideration of their specific needs. Now, with newly available data in hand, it’s time to change that, and find out just how much of a boon this growing part of the economy can be.

COVID-19: Implications for business

Covid-19: briefing note #100, april 13, 2022, as covid-19 becomes endemic in much of the world, we turn our focus to sustainable and inclusive growth..

On March 2, 2020, just over a week before a global pandemic was declared, we published COVID-19: Briefing note #1. Our plan was to publish an update on the virus’s implications for business for as many weeks as the news felt urgent. We did not expect to continue for more than two years, nor to ever publish briefing note #100, as we have today.

It’s painful to reflect on these 100 editions, on the millions of lives lost, the suffering and grief, and the myriad disruptions to lives and livelihoods. But in what is perhaps a hopeful sign, we now feel the time is right to stop. COVID-19 news seems less urgent than at any time in the past two years. All of McKinsey’s published work now intrinsically accounts for the pandemic, even if it is not directly mentioned. COVID-19 has gone from being a fresh emergency to a fact of life.

In a few weeks, we will relaunch this weekly report with links to the latest McKinsey publications. Our new theme will be sustainable and inclusive growth. After more than two years of reporting on a destructive force, we look forward to sharing our research and thoughts on how people and organizations can build a better world.

McKinsey is already exploring how to achieve sustainable and inclusive growth, the topic of the inaugural episode of the new Future of America podcast . McKinsey Global Institute director and senior partner Kweilin Ellingrud and senior partner Greg Kelly discuss how leading companies can use the pandemic recovery as an opportunity to accelerate prosperity for more Americans. Customers and consumers want to be associated with companies that are making a positive difference. Companies can accelerate inclusivity and sustainability by having real awareness, committing to change, rewarding the change, and providing coaching and development to make the change happen.

After more than two years of reporting on a destructive force, we look forward to sharing our research and thoughts on how people and organizations can build a better world.

Much near-term growth will arise from a once-in-a-lifetime wave of capital spending on physical assets between now and 2027. This surge of roughly $130 trillion in investment will flood into projects to decarbonize and renew critical infrastructure. But few organizations are prepared to deliver on this capital influx with the speed and efficiency it demands. Companies should consider implementing a portfolio-synergistic strategy in which planning is top down, a major business challenge requiring savvy stakeholder management, capital markets expertise, and an understanding of complex approval processes.

Sustainable, inclusive growth will require changing the workplace to maximize the contributions of all people. In the COVID-19 era, women across all sectors have shouldered more household responsibilities, and more women report feelings of burnout. These problems can be more acute for women in healthcare, who have fewer opportunities to work remotely and report feeling greater pressure to prioritize work over family. In spite of these challenges, healthcare continues to outperform other sectors in the representation of women , who make up more than two-thirds of entry-level employees and 53 percent of employees in roles at the senior-manager level or above, which is 18 percentage points higher than the average across all sectors.

Each sector, industry, and function will have to reinvent itself to achieve maximum growth and sustainability. Procurement leaders, for example, are facing one of the toughest market environments of their careers. Procurement organizations need to take a leading role in protecting enterprise margin and growth , invest in proven technology and process automation, and build deep expertise in supply market dynamics, among other fundamental changes. A pair of articles featuring McKinsey and outside experts explore how the CFO’s role is also rapidly evolving —expanding in scope, requiring new capabilities, and demanding greater collaboration with C-suite peers. Among the most significant changes to the role is the demand for CFOs to help promote capability building and talent development within their organizations.

Here are other key findings from our research this week:

Lithium is needed to produce virtually all batteries currently used in electric vehicles (EVs) as well as consumer electronics. We believe the world will secure enough lithium for the EV revolution , as long as new mining technologies and potential mining sites receive funding and end users communicate upcoming needs so that lithium miners have enough time to react.
Our interactive explores how fashion is finding ways to participate in the metaverse .
McKinsey’s methodology can be used to prioritize investments in innovations based on the economic impact of the health improvements they deliver to society .

Our latest edition of McKinsey for Kids explores how programmers use games to teach computers how to think, ultimately developing AI. Kids can read, take quizzes, and watch animations to learn about how the human brain and computers are both alike and different and about a cornerstone of AI programming called “reinforcement learning.”

In our latest edition of Author Talks , neuroscience expert and Cognitas Group cofounder Dr. Laura Watkins discusses her new book (coauthored with Vanessa Dietzel), The Performance Curve: Maximize Your Potential at Work while Strengthening Your Well-being (Bloomsbury Publishing, November 2021). Using insights from neuroscience, adult development psychology, yoga, and behavioral therapy, the book proposes practical ways to improve work performance without sacrificing mental or physical health.

This briefing note was edited by Katy McLaughlin, a senior editor in McKinsey’s Southern California office.

COVID-19: Briefing note #99, April 6, 2022

Some pandemic effects will take a long time to cure..

COVID-19 appears to be moving to endemicity in some parts of the world. But even in these places, some of the pandemic’s damaging consequences are only now being assessed and understood. This week, McKinsey studied the degrees of learning loss suffered by students around the world. We also looked at the pandemic’s lingering effects on the airline industry and on labor markets and examined how long it might take for some things to go back to how they used to be and why others never will.

On average, students globally are eight months behind where they would have been absent the COVID-19-pandemic, but the impact varies widely (exhibit). Within countries, the pandemic also widened gaps between historically vulnerable students and more privileged peers. We estimate by 2040, unfinished learning related to COVID-19 could translate to annual losses of $1.6 trillion to the global economy. Educational systems could consider a tiered approach to support reengagement, with more support (including social and emotional) for the highest-risk students.

The COVID-19 pandemic caused airline revenues to drop by 60 percent in 2020, and air travel and tourism are not expected to return to 2019 levels before 2024. Challenges vary across the global aviation landscape. In particular, airlines need to bolster their resilience by increasing their cash reserves, which would reduce the need for bailouts every time a crisis hits, and by improving their ability to reduce supply quickly and cost-effectively when demand abruptly falls. McKinsey’s latest survey of more than 5,500 air travelers globally revealed a potential long-term challenge: the share of respondents who say they plan to fly less to minimize their environmental impact rose five percentage points since 2019 to 36 percent, and more than half of respondents said that aviation should become carbon neutral in the future. “Flygskam,” or shame about flying, plays a role. Leading airlines that build a brand promise on sustainability will likely attract a growing share of business.

In a current episode of McKinsey Talks Talent , McKinsey talent experts Bryan Hancock and Bill Schaninger discuss the power workers have gained as an indirect effect of the pandemic . Although there has been some high-profile organizing activity, the real source of worker power comes from the current high demand for labor and because remote workers have a wider-than-ever range of job choices.

On the latest episode of The McKinsey Podcast , Sven Smit, senior partner and chair of the McKinsey Global Institute, discussed some potential effects of the ongoing war in Ukraine . Refugee numbers may climb from the current few million to ten or even 15 million. The potential doubling or even tripling of food and energy prices could cause hardship for less well-off populations around the world.
Distributors can learn from Amazon Business and other large digital players that are building best-in-class distribution networks and offering products they used to avoid due to technical or supply chain challenges.
Paper and forest product CEOs should consider future-proofing companies with strategies such as “precision forestry”; by leading on environmental, social, and governance (ESG); and by harnessing digital and analytics capabilities to strengthen competitiveness.
The semiconductor industry’s aggregate annual growth could average from 6 to 8 percent a year up to 2030, resulting in a $1 trillion industry. Amid the growth of remote working, AI, and demand for electric vehicles, manufacturers and designers should now take stock and ensure they are best placed to reap the rewards.
General and administrative functions can optimize for speed and flexibility by eliminating the silos that traditionally occur between different departments. This will drive better cross-department coordination and allow leaders to realign staff more efficiently.
Health provider systems could prioritize efforts to meet patients’ unmet needs by creating partnerships with schools, community organizations, payers, private businesses, and government agencies.
In 2020, Californians bought and wore more than 500,000 tons of clothing, almost all of which will eventually enter landfills covering an area about 3.5 times the size of the City of Los Angeles. The key to reducing fashion waste is circularity —building a closed loop for recycling materials back into the manufacturing process.

In our latest edition of Author Talks , Todd Rose, a former Harvard University professor and the cofounder of the think tank Populace, discusses his latest book, Collective Illusions: Conformity, Complicity, and the Science of Why We Make Bad Decisions (Hachette Book Group, February 2022). The book explores why people are likely to buy into fundamental misunderstandings of what most people think.

Also in Author Talks , we spoke with Amy Zegart, a senior fellow at the Hoover Institution and the Freeman Spogli Institute at Stanford University, where she is also a professor of political science. Zegart discussed her new book , Spies, Lies, and Algorithms: The History and Future of American Intelligence (Princeton University Press, February 2022). The book explores the current state of intelligence, why the government is behind on adopting new technologies, and what the public misunderstands about the spy business.

COVID-19: Briefing note #98, March 30, 2022

One of covid-19’s health effects is the transformation of healthcare..

The COVID-19 pandemic devastated the world’s health but may leave a lasting legacy of improving how the world addresses healthcare. The effort to develop and distribute vaccines demonstrated how much can be achieved with global collaboration, lessons that can be applied to ambitious improvements in well-being. This week, McKinsey explored how the pandemic changed healthcare approaches, including expectations, delivery, viral-vector gene therapy, investment, and consumer attitudes.

Humanity mobilized against COVID-19 at a speed and scale previously unseen. While far from perfect, the undertaking’s successes should inspire the world to challenge the view of what is possible. Over the past century, life expectancy has dramatically increased in most parts of the world, but the portion of life that human beings spend in moderate and poor health hasn’t changed (exhibit). The McKinsey Health Institute believes humanity could add roughly six years per person on average of higher-quality life by making six major shifts in how the world approaches health.

Even when COVID-19 becomes endemic, healthcare delivery in the United States will continue to transform rapidly . McKinsey’s 14th annual healthcare conference explored the next wave of industry evolution and how healthcare organizations must innovate to thrive. The future of care delivery is evolving to become patient-centric, virtual, ambulatory, in the home, value based, and risk bearing. It will be driven by data and analytics, enabled by new medical technologies, and funded by private investors.

COVID-19 accelerated viral-vector gene therapies . Some of the earliest viral-vector-based therapies targeting rare diseases required companies to produce only about 1,000 doses across development, access programs, and two years of commercialization. In comparison, the unprecedented demand and funding for COVID-19 vaccines enabled a ten- to 100-fold increase in production when adjusted by dose amount, with over two billion doses of the AstraZeneca viral-vector-based vaccine already produced. Keeping pace with increasing demand requires the consideration of challenges, the potential for standardization, and strategizing for accelerating patient access.

In light of growing opportunities, private investors are pouring into healthcare. That becomes clear throughout McKinsey’s annual Global Private Markets Review , which delves into the data and details of a wide range of private markets asset classes, including private equity, debt, real estate, and infrastructure investing. Healthcare is a recurring theme in this year’s report: in 2021, the healthcare sector had the fastest deal-volume growth globally since 2016. Of the largest ten private equity deals in 2021, three were in healthcare, and the largest deal involved a manufacturer and distributor of healthcare supplies. Many of the top 20 private equity firms have dedicated teams for healthcare, which speaks to its growing importance within the asset class.

The number of vaccinated US respondents in McKinsey’s Consumer Health Insights Survey has remained about the same since November of 2021, when 77 percent reported that they were vaccinated. Approximately 75 percent of respondents to the February survey reported that they’d been vaccinated; in addition, 63 percent of vaccinated respondents plan to stay current on COVID-19 vaccinations as recommended by healthcare leaders. Consumers are increasingly comfortable testing for COVID-19 at home; in fact, it now ranks as the most preferred testing location. Additionally, more than half of respondents indicated that they would prefer a health plan with virtual-health benefits.

In the next decade, expect giant leaps in outer space. In the latest edition of McKinsey’s multimedia The Next Normal series, “ The future of space: It’s getting crowded out there ,” McKinsey experts and industry executives envision the space industry’s near future.
Inflation could challenge the buying power of the Department of Defense (DOD) for the $773 million budget approved for fiscal year 2023. To address these risks, the DOD and industry leaders should increase affordability, improve inventory management, and develop better contracts that will help both buyers and sellers if costs rise.
The US construction sector faces a labor mismatch . In October 2021, 402,000 construction positions in the United States remained unfilled at the end of the month. That’s a headwind for a sector that our modeling suggests could create 3.2 million new jobs across the nonresidential-construction value chain over the next decade.
More than one-fifth of global greenhouse-gas emissions come from agriculture, making the development and consumer adoption of alternative proteins a meaningful opportunity to reduce negative climate impacts. Top executives from alternative meat companies spoke to McKinsey about opportunities and challenges facing the industry.
On the latest episode of The McKinsey Podcast , McKinsey partner Mekala Krishnan talks about how companies can get started on the path to net-zero emissions .
On the McKinsey on Consumer and Retail Podcast , McKinsey retail experts Tiffany Burns and Tyler Harris discuss five things retailers need to improve in omnichannel sales , including making the experience more seamless for customers and getting products to customers faster.

In our latest edition of Author Talks , Tessa West, an NYU associate professor of psychology, talks about her new book, Jerks at Work: Toxic Coworkers and What to Do about Them (Portfolio, January 2022). If anyone in the C-suite embraces jerk behaviors, it’s going to trickle down through the company because jerkish behavior is contagious at work, she says.

Also in Author Talks , science journalist Catherine Price discusses her new book, The Power of Fun: How to Feel Alive Again (The Dial Press, December 2021). People can improve their mental and physical health by getting in touch with what is really fun for them and making it a priority—rather than just vegging out in front of a screen, she says.

COVID-19: Briefing note #97, March 23, 2022

Uncertainty returns—but this time, the cause is not covid-19..

The COVID-19 pandemic created short-term disruptions and provoked long-term changes in how the world lives and does business. Russia’s invasion of Ukraine is now doing the same. This week, McKinsey published on what we know about the war and some of its possible global consequences. Among them are likely impacts to supply chains and how companies think about preparing for crises, two of our other topics this week. Another article provides a hopeful look at the investment pouring into decarbonization and renewal of infrastructure.

We, like many others, are shocked by the unfolding humanitarian tragedy resulting from the Russian invasion of Ukraine (exhibit).

As a result of the war in Ukraine, the era of not looking too closely at supply chains, trusting suppliers, and optimizing for cost is probably over. Those behaviors, already made suspect by new tariff regimes and the COVID-19 pandemic, are now likely to be consigned to history. Our latest research finds that despite progress over the past several years, companies are still struggling to build the capabilities that their emerging digital supply chains need. The most effective capability-building programs invest in foundational, end-to-end supply chain knowledge building, coupled with advanced functional, technical, and leadership training.

As in any conflict, uncertainty is high, although it is already certain that global consequences will include disruptions to energy and food markets, testing many companies’ resilience. McKinsey’s annual global board survey of approximately 1,500 corporate directors found that a mere 7 percent of respondents gave their boards the highest rating for risk management, and only 40 percent say their organizations are prepared for the next large crisis. On the Inside the Strategy Room podcast, McKinsey senior adviser Nora Aufreiter; senior partner Celia Huber, who leads McKinsey’s board services work in North America; and associate partner Ophelia Usher discussed how boards can improve how they handle big crises .

The world will see a once-in-a-lifetime wave of capital spending on physical assets between now and 2027. Roughly $130 trillion will flood into projects to decarbonize and renew critical infrastructure. But it won’t be easy: constructing and justifying the cost of a physical asset such as a manufacturing plant is much more difficult than it was decades ago, given inflation, rigorous sustainability requirements, and rapid changes in technology and regulations.

The COVID-19 pandemic accelerated online purchases and package deliveries at an unprecedented rate. Even conservative estimates project that cross-border e-commerce in goods will expand to about $1 trillion in merchandise value by 2030, from its current value of approximately $300 billion. Regulations and tariffs are also likely to increase, as are customer expectations for speed, decentralized supply chains, and specialist segments.
The increasing frequency and magnitude of economic volatility have put more pressure on traditional financial planning and analysis (FP&A) processes and teams. Next-level FP&A teams have figured out how to build more speed and flexibility into their processes, which can trigger more efficient and effective operations throughout the company.
Health equity is an opportunity and a challenge for pharmaceutical and life sciences players. By following the data and by working together, organizations can meet needs and create a cycle of trust in underserved communities.
Debra Facktor, head of U.S. Space Systems for Airbus U.S. Space & Defense , spoke to McKinsey about her job responsibilities, the future of the aerospace sector, and her experience as a woman in a male-dominated industry.
On the McKinsey Talks Operations podcast, Bruce Lawler, managing director for the Massachusetts Institute of Technology’s Machine Intelligence for Manufacturing and Operations program, and Vijay D’Silva, senior partner emeritus at McKinsey, discussed why some companies are pulling ahead of others with machine learning .
On the Inside the Strategy Room podcast, Robert Uhlaner, who co-led McKinsey’s Strategy & Corporate Finance Practice until his retirement this summer, and Liz Wol, the global leader of McKinsey’s work on M&A capability building, discussed programmatic M&A . This approach to mergers and acquisitions has proven to be the most successful at delivering results—provided you execute it right.

Our latest edition of Author Talks features Reshma Saujani, founder of Girls Who Code and an activist for women’s economic empowerment, discussing her new book, Pay Up: The Future of Women and Work (and Why It’s Different Than You Think) (Atria/One Signal Publishers, March 2022). Working mothers are overburdened and exhausted, so companies that want them to come back to the workforce need to help with childcare, paid leave, and mental-health support.

Also in Author Talks , retired Navy SEAL commander Rich Diviney talks about his book, The Attributes: 25 Hidden Drivers of Optimum Performance (Random House, January 2021). Diviney dives into how we can—and should—assess and develop our own attributes, equipping ourselves for optimum performance within our lives and throughout our careers.

COVID-19: Briefing note #96, March 16, 2022

On the second anniversary of the covid-19-pandemic, we reflect on what we’ve learned..

Just over two years ago, the World Health Organization declared a pandemic. Since then, one in every 1,300 people alive in 2019 has died from infection with SARS-CoV-2. Two years on, it is easy to forget how remarkable the development of COVID-19 vaccines was: moving in just 326 days from a genomic sequence to the authorization of a vaccine shattered all previous records.

For this anniversary, we reflected on ten core lessons of the pandemic (see sidebar), some of which exposed fault lines in our society and others that demonstrated amazing capabilities. A separate initiative compiled two years’ worth of research on pandemic impacts, while a third article examined how the pandemic set input prices rising and what to do about it.

Ten core lessons of the pandemic

Infectious diseases are a whole-of-society issue.
The vaccine-development paradigm has been transformed for emergencies and, potentially, for more.
Conversely, weaknesses in vaccine manufacturing and equitable distribution will require systemic change.
Trust is one of the most delicate but critical requirements for an effective pandemic response.
Agility and speed will be the new basis for differentiation.
Government policy matters—but individual behavior sometimes matters more.
Schools are the true fulcrum for the functioning of society.
Work will never be the same.
Economic stimulus works, but only in concert with strong public-health measures.
Whether we experience these problems again will depend on the investments and institutions we establish now.

As part of our examination of where the pandemic took us and what’s next, we’ve gathered interviews and articles about COVID-19 from the past two years . Interviews with General James Mattis; Steven M. Jones, co-inventor of the first Ebola vaccine; and McKinsey senior partner Shubham Singhal addressed the crisis as it occurred. Packages of articles examining the pandemic’s effects on areas including healthcare, operations, and sustainable and inclusive growth show how industries have been shaped by the experience and how leaders are looking toward the future.

The aftershocks of the COVID-19 pandemic continue to rock the global economy. Following the shutdowns of 2020 and the supply chain challenges of 2021, another wave of disruptions is now breaking over businesses around the world: rising input prices . Accurate cost models and advanced digital operations help organizations respond to rising costs and equip them with the tools and capabilities they need to thrive when prices fall.

Cybersecurity threats are growing and threaten companies of all sizes, municipalities, and state and federal governments. The solution is to reinforce defenses by anticipating emerging cyberthreats and understanding the new defensive capabilities that companies can use today and others they can plan to use tomorrow.
On the McKinsey on Healthcare podcast, Errol Pierre, senior vice president of state programs at Healthfirst, discusses what New York’s largest not-for-profit insurer learns from working with diverse communities .
By 2020, 40 years after the development of the first commercial machines, the additive-manufacturing sector had become a €13.4 billion industry. As technical barriers fall, the onus is on manufacturers to build skills, processes, and business models.
McKinsey’s second annual review of the progress of digitization in German healthcare shows solid uptakes of telemedicine and consumer health apps, but lagging use of e-prescriptions, health-data exchange, and use of electronic health records.
McKinsey and Club 21e Siècle created the French Corporate Diversity Barometer to measure the diversity of national origins and socioeconomic backgrounds of the executives of large companies in France .
Prioritizing privacy, sustainability, and inclusion will soon be essential to successful tech development . Companies must provide the tools, training, and resources for product managers to make responsible innovation ubiquitous.
Internal-combustion-engine suppliers must manage uncertainty during these challenging times for the industry. To succeed, they will need a new operating model that includes formulating dynamic responses to continuing disruptions and focusing on building value through higher return on invested capital.
Sustainability and digital (particularly e-commerce) will create significant challenges for packaging industry leaders , as well as once-in-a-lifetime transformational opportunities.

This week, McKinsey senior partners Carolyn Dewar, Scott Keller, and Vik Malhotra launch their new book, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest (Scribner, March 2022). The authors spoke about their interviews with 67 CEOs as part of our Author Talks series and how they identified the traits that separate the best leaders from the pack.

COVID-19: Briefing note #95, March 9, 2022

Another global crisis is now overshadowing covid-19..

For the first time in two years, concerns about another global crisis overshadowed the COVID-19 pandemic: the Russian government’s invasion of Ukraine and the humanitarian tragedy it is causing. Implications for the world economy will become more visible in the coming weeks and months; this week, McKinsey identified some immediate global economic impacts. Coincidentally, our other major publishing initiative this week is a deep dive into insurance—an industry that exists, in essence, in case things go wrong.

The Russian government’s invasion of Ukraine is causing a humanitarian crisis and economic risks. Our Global Economics Intelligence executive summary for February discusses how the invasion of Ukraine has mostly set energy prices surging. The oil price (Brent) was near $60 per barrel on December 1 but climbed steadily thereafter, touching $100 in late February. The price of natural gas and coal has similarly climbed during this period (exhibit). Prior to the invasion, the US dollar was depreciating slightly against most major currencies; it is now rising in value. Other immediate economic effects were spikes in the prices of gold, crude oil, and natural gas, as well as stock market losses.

As part of our celebration of International Women’s Day 2022, 20 female McKinsey partners offer insights in a series of interviews on the insurance industry . Topics include operations, growth, claims management, underwriting, product innovation, digital business building, and motor insurance. Further interviews examine women’s representation in the insurance industry and look at the broader issue of diversity in insurance.

New customer expectations, low interest rates, and new sources of competition (such as leading tech companies, insurtechs, and third-party capital) are putting pressure on insurance carriers to be more innovative . It’s not easy: successfully profiting from innovation is a complex, company-wide endeavor, and most insurers have not yet consistently cracked this code. Steps for building innovation into the way an organization works include shifting resources from core business tasks to breakthrough innovation initiatives and developing distinct product-development pathways and processes.

Insurers should consider programmatic M&A : systematically acquiring small to midsize businesses, services, and capabilities and integrating them as new businesses or capabilities. Insurers can use this approach to tackle issues including sustaining growth in core life and annuity businesses and enhancing property and casualty presence in growth markets.

On The McKinsey Podcast , McKinsey partners Michael Chui and Mark Collins share their thoughts on the findings of McKinsey’s latest Internet of Things (IoT) report . Fast-growing areas include consumer applications (especially in the connected home); hospital, acute-care, and residential-care settings; and factories, cities, and work sites. Integrating IoT is often easier in greenfield settings but harder to integrate into legacy environments.
Of 346 large M&A deals announced between 2013 and 2020, 47 were canceled for antitrust or regulatory reasons . While executing remedy separations, it is vital to adhere to the perimeter set by regulators, move fast in identifying potential buyers, and ensure a close integration between the remedy separation process and the overall transaction and integration process.

In this edition of Author Talks , Deepa Purushothaman talks about her new book, The First, the Few, the Only: How Women of Color Can Redefine Power in Corporate America (Harper Collins, March 2022). Drawing on more than 500 original interviews, Purushothaman examines work life for women of color and what needs to change to improve their experiences.

COVID-19: Briefing note #94, March 3, 2022

The covid-19 pandemic may finally be ending..

A new variant may yet trigger another chapter in the COVID-19 pandemic, and societies must be prepared to respond if and when that happens. But for now, the pandemic phase looks to be ending. With a possible conclusion in sight, this week McKinsey focused on how postpandemic workforces can be supported with expanded opportunity, digital tools, more equitable promotions, and better office design.

In the latest edition of our “ When will the COVID-19 pandemic end ?” series, McKinsey examined scenarios that would lead to either reigniting a pandemic-level crisis or further steps toward endemicity. As long as Omicron remains the dominant variant, there is reason for relative optimism; in the United States, for example, hospitalizations would remain low (exhibit). By and large, the six-month outlook in many countries is brighter than at any time in the past two years. The main risk to the transition to endemicity is a significantly different and more severe new variant that replaces Omicron as the dominant strain.

The latest episode of the McKinsey Global Institute’s Forward Thinking podcast features David Autor, the Ford Professor of Economics at the Massachusetts Institute of Technology . Autor identifies pandemic paradoxes, which include that many thought US poverty and joblessness would skyrocket, but the opposite occurred when poverty rates plummeted to unprecedented lows and the United States ended up with a labor shortage. Leaders should think about ways to expand opportunities, including by being honest with themselves and the labor market about which jobs truly require a college degree.

On McKinsey Talks Talent , HR expert David Green speaks with McKinsey talent experts Bryan Hancock and Bill Schaninger. HR leaders can use people analytics to identify big-picture attrition patterns, illuminate how office space is being used, and automate parts of the recruiting process, including finding diverse candidates.

In technical roles, only 52 women are promoted to manager for every 100 men, according to McKinsey’s Women in the Workplace 2021 report, coauthored with LeanIn.Org. Companies can improve women’s promotion rates by providing equitable access to skill building, implementing a structured promotion process that seeks to remove bias, and building a strong culture of support for women via mentors and sponsors.

Diane Hoskins, co-CEO of Gensler, a global design and architecture firm , has been thinking about effective workplaces for decades and is now helping her clients navigate the next normal. In a conversation with McKinsey Real Estate Practice leader Aditya Sanghvi, Hoskins discusses how COVID-19 made it even more essential to design offices around organizational strategies, leadership models, operational frameworks, and potential outcomes of a company.

The Consumer Price Index rose faster in January than at any time in the prior 40 years. Businesses facing inflation are caught between the need to reprice and sustain margins and the damage this can do to customer relationships and sales. McKinsey’s suggested approach can help companies establish sales-led pricing for inflation while maintaining long-term value for the business and its customers.
Banks can learn to manage nonfinancial risks by observing the effective approaches corporates have developed. These include embedding risk into strategy and improving overall resilience.
Our analysis suggests that in 2030, demand for green steel in Europe could be twice as great as the available supply, and there may be global shortages of recycled aluminum and recycled plastic. By planning green-materials sourcing strategies , companies can achieve immediate emissions reductions and sustain progress toward longer-term goals.
COVID-19 accelerated the sophistication of China’s logistics industry , a crucial node in the global supply chain. Greater consolidation and integration are likely in some subsectors—such as third-party logistics and express-delivery carriers—and expect growth in other areas, such as warehouse automation and air cargo.
On the McKinsey on Government podcast, McKinsey senior partner Scott Blackburn and partner Brooke Weddle discuss how the US government’s leaders can implement an effective transformation.

In this edition of Author Talks , Whitney Johnson, the CEO of tech-enabled talent agency Disruption Advisors, talks about her new book, Smart Growth: How to Grow Your People to Grow Your Company (Harvard Business Review Press, January 2022). Mastering new skills follows an S-curve, where there’s a difficult introductory phase, a “sweet spot” where you’re enjoying applying new knowledge, and an end part of the curve where boredom can set in. Leaders need to understand where their teams are to create the right supports for each phase, Johnson says.

COVID-19: Briefing note #93, February 23, 2022

The covid-19-pandemic accelerated our need for a new kind of growth..

The COVID-19 pandemic served as an accelerant in multiple ways. This week, McKinsey looked at how the pandemic spurred the adoption of telehealth and e-commerce, exacerbated pressure on nurses, and made company operations more complex. In the big picture, it increased the urgency for a new vision of global growth, one that benefits more people and leaves our planet healthy.

Crises such as COVID-19 can become watersheds of policy and strategy. In an editorial published in Fortune , Klaus Schwab, the founder and executive director of the World Economic Forum, and Bob Sternfels, McKinsey’s global managing partner, propose pursuing a sustainable, inclusive growth agenda that supports the health of the natural environment while improving the livelihoods of wider population segments. Leaders can shape a resilience agenda by addressing the interrelationships between climate, healthcare, labor needs, supply chains, digitization, finance, and inequality and economic development.

To build a better future, the emphasis must now shift from defensive measures and short-term goals to a sustainable, inclusive growth agenda.

The pandemic ignited telehealth: as of mid-2021, utilization was 38 times higher than before the pandemic. However, McKinsey’s most recent Physician Survey showed that most doctors don’t love telehealth as much as patients do . Most expect to return to a primarily in-person delivery model over the next year, and 62 percent said they recommend in-person over virtual care to patients.

The pandemic essentially forced consumers to try e-commerce and to increasingly rely on product ratings and reviews to give them the confidence to make purchases. The total number of global reviews roughly doubled in the year after COVID-19 started. On The McKinsey Podcast , McKinsey partner Dave Fedewa and McKinsey senior expert Chauncey Holder discuss how companies need to adapt to the new world in which reviews matter more than ever .

Healthcare workers and their organizations continue to face unparalleled demands stemming from the COVID-19 pandemic. Thirty-two percent of registered nurses surveyed in the United States in November said they may leave their current direct-patient-care role, according to McKinsey’s latest research. Healthcare organizations can consider a number of medium- and longer-term strategies to support their workforces.

As companies look at areas to automate, they need a clear, complete picture of service processes . The complexity of services, which often involve coordinating multiple functions in nonlinear ways, makes bad handoffs a perpetual problem. Add to these factors the burgeoning number of customer touchpoints and the accelerated move to remote working since the start of the COVID-19 pandemic, and the challenge looms even larger. An approach we call process insights—which marries technology tools and analytics in a disciplined, three-stage process—shows promise.

While our theme this week is the pandemic’s accelerating effects, we also looked at the opposite: how COVID-19 can spur lightning-fast pullbacks. Although consumer confidence is growing, desire for travel has shown a faltering recovery due to sporadic COVID-19 outbreaks. Our examination of China’s tourism industry showed that a predictable pattern is emerging where desire for travel recovers roughly two months after a decline. Furthermore, travelers’ preferences are shifting, with implications for travel companies.

Signed in November, the US Infrastructure Investment and Jobs Act will provide more than $1 trillion in public investment. One core component of the legislation is addressing the country’s aging water system . The act provides funding to replace lead pipes, address emerging contaminants in small and disadvantaged communities, and support rural water projects.
A relative lack of top software companies threatens Europe’s economic competitiveness. But Europe could take a lead in software and build large players by playing to the continent’s strengths: vertical B2B software, software platforms for digitizing small and medium-size enterprises, and horizontal platforms built on European R&D excellence.
Software sourcing , now a major driver of overall product cost, requires critical investments in capabilities and technologies, as well as significant financial resources. Those players that can procure software and related services at minimum cost and risk have a distinct competitive advantage.
Asian acquirers are key players in the Asian M&A landscape , and many are setting their sights worldwide. Our research finds that the most effective dealmakers practice programmatic M&A tied directly to a stated strategy.
On the McKinsey on Consumer and Retail podcast, McKinsey partner David Feber and Amcor CEO and managing director Ron Delia talk about exciting innovations that could transform the packaging industry .

This week in Author Talks , Ruchika Tulshyan, an award-winning inclusion strategist and speaker, discusses her new book, Inclusion on Purpose: An Intersectional Approach to Creating a Culture of Belonging at Work (MIT Press, March 2022). She explores the bias behind terms such as “lean in” and “culture fit” and proposes that inclusion efforts target the needs of women of color.

This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.

COVID-19: Briefing note #92, February 16, 2022

As omicron reminded us, health is everything..

McKinsey focused on health this week, starting with a discussion of how Omicron has played out so far and what is likely next in the pandemic’s trajectory. An article on women’s health explores the remarkable tradition of viewing it as a healthcare niche, rather than a core concern of half the world’s population. Technology is increasingly merging with healthcare, so we extrapolated this theme further to examine how to keep companies’ technology healthy.

In this episode of The McKinsey Podcast , Shubham Singhal, senior partner and global leader of McKinsey’s Healthcare and Public & Social Sector Practices, reflects on where Omicron has taken us so far and where we go from here . Omicron spread so fast because it evades prior immunity and is more transmissible, allowing it to out-compete the previously dominant strain. Society will begin viewing COVID-19 as endemic when we’re comfortable getting on with life even though the risk of disease is not zero (and for the unvaccinated, it remains high).

Half of the world’s population is women, and women account for 80 percent of consumer-purchasing decisions in the healthcare industry. Yet women’s health has been considered a niche market and a mere subset of healthcare. A particularly illuminating statistic: only 1 percent of healthcare research and innovation is invested in female-specific conditions beyond oncology. Changing how the industry thinks about women’s health is an important step toward identifying value-creating opportunities for meeting women’s healthcare needs.

It is not a light switch event to get to an endemic phase, because it is as much about the behavior and psychology that we all exhibit as it is about the epidemiology of the virus itself.

FemTech is an emerging category consisting of tech-enabled, consumer-centric solutions addressing women’s health. Depending on scope, estimates for FemTech’s current market size range from $500 million to $1 billion, and forecasts suggest opportunities for double-digit revenue growth. Our analysis of 763 companies indicates that the dynamics underlying FemTech are accelerating and that public awareness, company formation, and funding are surging.

When employees feel understood and supported by their employers, they tend to be happier, more effective, and more likely to stick around. Companies can use the power of AI and machine learning to coach employees . An AI-driven system can be designed to identify key moments when employees would benefit from a “nudge” that guides them toward positive actions, including improving their health, accessing training, and trying a different performance approach.

To protect the health of our work environments from ransomware , everyone from the board and C-suite to down the line must work to ingrain security into an organization’s DNA. Ransomware costs are expected to reach $265 billion by 2031. Supply chain attacks rose by 42 percent in the first quarter of 2021 in the United States, affecting up to seven million people, while security threats against industrial control systems and operational technology more than tripled in 2020.

McKinsey’s Global Insurance Report 2022 explores long-term challenges facing the industry as well as a raft of trends unleashed by COVID-19. Insurers face fundamental strategic questions of how to create more value for shareholders and how to reframe the role of insurance in society. The report proposes nine imperatives that will help carriers navigate the current environment and focus on the businesses of which they are the best natural owners.
With a target of a 78 percent reduction in economy-wide greenhouse-gas emissions by 2035 now enshrined in law, there is a strong impetus to transition the United Kingdom’s energy system to net zero . Looking at electricity demand, technology, and the grid, McKinsey examines options available to investors, regulators, policy makers, and energy companies.
Companies used to outsource business processes primarily as a cost-saving strategy. Today, companies outsource to capitalize on sophisticated provider offerings , including customized industry solutions and advances in digital technology, such as AI, analytics, and machine learning.

In this edition of Author Talks Amy Webb, a leading futurist and business adviser, talks about her recent book, The Genesis Machine: Our Quest to Rewrite Life in the Age of Synthetic Biology (Hachette Book Group, February 2022), coauthored by microbiologist Andrew Hessel. The book explores a new field of science that combines engineering, design, and computers with biology, enabling the engineering of living cells. Webb says that synthetic biology—the ability to reprogram the fundamental units of life—is going to change industries such as healthcare, agriculture, and industrial materials.

COVID-19: Briefing note #91, February 9, 2022

The ceo job description just got a bit longer..

CEOs have always carried a heavy workload, but the issues they confront today add several fresh layers. Climate change requires a new way of looking at asset value that models the potential impact of various types of risk. COVID-19 and its aftermath means leaders must engage empathetically in topics relating to their employees’ well-being. This week, McKinsey examined how the pandemic and other world events have added to leaders’ list of most important tasks.

Climate change and the risks it imposes upon assets and markets is one of the biggest challenges confronting CEOs and other leaders today. The real-estate industry is already facing the need to build new capabilities that allow it to assess how climate-change risks alter values and what subsequent actions to take. Part of capability building involves understanding both physical risks and transition risks stemming from regulatory, social, and market reactions to climate change (exhibit). Once real estate and other leaders understand value impact, they can proceed to decarbonizing and finding new sources of value throughout the climate transition.

COVID-19 brought on a new set of employee pressures , including trying to take care of work and children at a time when school doors close suddenly, and managing the 24/7 nature of working from home. These burdens also imply a new set of pressures for CEOs and other leaders as they attempt to support overburdened workforces. On the McKinsey Talks Talent podcast, McKinsey talent experts Bryan Hancock and Bill Schaninger discuss how leaders must engage in employees’ lives and well-being in ways they seldom did in the past.

We’re in one of the most bewildering labor markets in a generation, said Asutosh Padhi, McKinsey’s managing partner for North America, in a CNN Business Perspectives commentary. CEOs can respond by expanding recruitment efforts to people who have work experience but don’t have degrees; supporting more “gateway jobs,” or stepping-stone positions that provide an income boost; and by challenging their organizations to embrace a more inclusive, skills-based approach to hiring and talent management.

Across industries, product-development functions are encountering a perfect storm of supply chain issues arising from the pandemic, the current labor mismatch , and evergreen themes of managing cost, quality, and time. Rather than becoming part of the much-bemoaned war for talent, companies can develop the capabilities of their existing workforce to fill skills gaps.

As the economy continues to reel from the effects of COVID-19, consumer-packaged-goods companies are under more pressure than ever. Prices for food and packaging commodities have increased by more than 22 percent. Manufacturing wages and labor costs rose in 2020 from 5 to 20 percent of total costs. To respond to these rapid, sweeping changes, companies need to transform their operating models to the new reality.

Given that economies are expected to shift away from stimulus spending and other policy supports, forecasters and economists generally project a slower pace for global growth in 2022—but one that is still faster than prepandemic levels. January’s Global Economics Intelligence executive summary focuses on how inflation is playing out around the world, efforts to control it, and its impact on growth and employment.

To better understand recent developments in sustainable packaging , we mapped regulations in 30 countries and found four common patterns. To ensure they comply with evolving requirements, packaging companies should track regulatory changes in their focus markets and implement processes to address future requirements proactively.
Responding to a McKinsey survey, two out of three Americans told us their social values now shape their shopping choices, and 45 percent believe retailers should actively support Black-owned businesses and brands. Most retailers will need to make changes to meet the needs of these “inclusive consumers” by sourcing products that dovetail with consumer values and by communicating the changes to the public.
Up to four-fifths of a product’s lifetime emissions are determined by decisions made at the design stage. By building on proven cost-optimization techniques, companies can get those choices right.
Myths often hold back heavy industries from activating agile working practices . However, agility in heavy-industry organizations can be used to make operational improvements, to enhance run activities, to augment all-important safety standards, and ultimately to become an enduring source of competitive advantage.

In this edition of Author Talks , Neil Hoyne, Google’s chief measurement strategist, discusses his new book Converted: The Data-Driven Way to Win Customers’ Hearts (Penguin Random House, February 2022). Data alone is not the answer for companies trying to grow, Hoyne says. Instead, companies can find growth by creating the right data strategy, leadership, and processes.

COVID-19: Briefing note #90, February 2, 2022

The postpandemic world calls for fresh leadership ideas..

Organizations increasingly recognize that modern leadership means knowing how to make the most of digitization and technology, diverse talent, and the opinions of a range of stakeholders. This week, McKinsey dug for the details. Articles and an interactive explore how companies can take advantage of advanced-intelligence technology and become truly data driven. A new interview series illuminates how three Black leaders developed their leadership styles, while further articles explore casting the idea net wider.

Leading industrial and manufacturing companies are using machine-intelligence technologies to move the needle on a broad set of performance indicators, achieving three or four times the impact of average players. The full scale of the opportunity is set to continue as more use cases evolve from simple dashboards to greater levels of autonomy.

What exactly does it mean to be a data-driven enterprise , and what would such an organization look like by 2025? Our interactive helps executives envision success by defining seven characteristics of a data-driven organization, how each would differ from what we typically see today, and how to achieve each step. Companies able to make the most progress fastest stand to capture the highest value from data-supported capabilities.

McKinsey created the Connected Leaders Academy to equip Black, Hispanic, Latino, and Asian leaders with the network and capabilities to achieve their professional aspirations. In our new interview series , My Leadership Journey, participants from the private sector, academia, the arts, and other walks of life reflect on their formative experiences and leadership styles. Jason Wright, president of Washington’s football team, the Commanders , told McKinsey about getting cut nine times from the NFL and talking his way back to opportunity by honing a narrative about what he could contribute. Stephanie Hill, executive vice president of Lockheed Martin’s Rotary and Mission Systems , discussed the importance of accepting uncomfortable challenges to build a career. Barry Lawson Williams, founder and former managing general partner of Williams Pacific Ventures , who has also served on 16 major public-company boards, spoke about how he built a network that helped position him for lucky breaks.

What does an army veteran who has returned from deployment five times have to teach a McKinsey organizational expert? Plenty, as a letter and conversations between Adria Horn, executive vice president of workforce at Tilson, a national telecom provider, and senior partner Aaron De Smet revealed. Horn reached out to McKinsey after reading about how companies can reengage employees postpandemic . She shared her view of parallels between soldiers returning from war zones and employees coming back to the office after living through the COVID-19 pandemic. The resulting conversation explores the alienation of return and how employers can work from a place of empathy.

Brainstorming is supposed to result in conversations like the one between Horn and De Smet. But too often, the value of casting the net wide for opinions is undercut by participants feeling pressured to conform. A structured approach that guides a group through anonymous brainstorming and silent voting removes some of the risks that can thwart honest discussion.

Based on a survey of physicians who serve predominantly Medicare fee-for-service and Medicare Advantage patients, we estimate that up to $265 billion worth of care services could shift from traditional facilities to the home by 2025 without a reduction in quality or access. Care at Home could create value for payers, healthcare facilities and physician groups, providers, technology companies, investors, and, above all, patients.
Korean companies would benefit from portfolio restructuring by making governance more transparent and by advancing women’s equality at work. In a wide-ranging conversation, André Andonian, managing partner of McKinsey Korea, discusses McKinsey’s near- and long-term goals in the country and how Korea is preparing for the post-COVID-19 economy .
Investors are directing more funds to projects involving lunar and beyond orbital regimes , which have traditionally attracted less attention than regimes at lower altitudes. All signs point to continued growth.

Even the most seasoned professional was a neophyte at some point, a fact celebrated in our My Rookie Moment video series, in which McKinsey colleagues discuss the first time they had to deal with a particular challenge. The latest edition features stories about “leaps of faith,” in which partners had to do something for which they felt unprepared. Yarns include a tale of on-command public speaking and the recollection of facing a client who demanded different conclusions.

COVID-19: Briefing note #89, January 26, 2022

Tackling the other big global crisis..

Since March of 2020, we have focused this weekly update on sharing research into the health emergency facing the world. This week, we took a break from the COVID-19 pandemic to zero in on the other crisis that poses threats to lives and livelihoods: climate change, and the need to transition to a net-zero world. Additional articles looked at pressing issues including why the loss of US manufacturing has increased inequality, and how the Great Attrition is playing out in nursing.

A new report from the McKinsey Global Institute looks at what an economic transformation to net-zero emissions would entail . The transformation would affect all countries and all sectors of the economy, either directly or indirectly. In six sections of the report, we assess economic shifts for 69 countries and changes in sectors that produce about 85 percent of overall emissions, as well as provide estimates for what it will all cost (exhibit).

The report includes an examination of effective decarbonization actions , which include shifting the energy mix, increasing energy efficiency, and enhancing sinks of both long- and short-lived greenhouse gases. Another section illustrates the economic and societal adjustments that would enable a successful transition to net-zero emissions by 2050, focusing on demand, capital allocation, costs, and jobs. We examine which sectors of the economy are more exposed to a net-zero transition , and how the transition could play out in various countries and regions . A section about actions for stakeholders explores what companies, financial institutions, and governments and multilateral institutions can do.

Also this week: revitalizing US manufacturing could be fundamental to resolving inequities while driving sustainable, inclusive growth. Today, the manufacturing sector represents just 10 percent of US GDP and jobs but drives 20 percent of the nation’s capital investment, 35 percent of productivity growth, 60 percent of exports, and 70 percent of business R&D expenditure. Strengthening the sector could also address the pervasive supply chain issues wreaking havoc all over the world, easing short-term disruption caused by the pandemic while improving global competitiveness in the midterm to long term.

During a time of unprecedented need, what can employers do to prevent losing nurses , the backbone of the healthcare workforce, to the Great Attrition ? The McKinsey Podcast speaks with senior partner Gretchen Berlin, a registered nurse, about the need to pay nurses adequately and to ensure that there’s sufficient staffing, respite, and gratitude.

In October 2020, coking coal accounted for more than half of the cost of the raw materials needed to produce a metric ton of steel via a blast furnace—a rare occurrence by historical standards. Though prices have fallen since then, steelmakers should consider the effect of longer-term coal price increases as part of their planning and adjust their plans as the implications evolve.
The new normal for sporting goods includes increased health awareness, acceptance of athleisure, thriving e-commerce, and sustainability as a core concern. McKinsey’s summary of the state of the industry suggests strategies for navigating the trends.
New and better digital tools can help companies analyze voice conversation and unlock the full potential of digital investments to improve customer service.

In the latest edition of our Author Talks series, John Koenig, author of The Dictionary of Obscure Sorrows (Simon & Schuster, November 2021), discusses how and why he invents new words for emotions and sensations. From “kenopsia” (the eeriness of places left behind) to “suerza” (a feeling of quiet amazement that you exist at all), Koenig’s made-up words pinpoint universal experiences and demonstrate how creative human language can be.

COVID-19: Briefing note #88, January 19, 2022

Fallout from the pandemic demands targeted action..

For much of the COVID-19 pandemic, leaders have tried to prepare for what might unfold. Today, some of those possibilities have arrived as undeniable challenges that demand new ways of operating. This week, McKinsey looked at fallout, including inflation, young peoples’ mental-health struggles, a pattern of “jolting” growth, and the demand for government agencies to improve customer service.

Not since the 1970s has inflation been such a central issue for companies, so finding creative ways to mitigate price increases is a dormant skill in many organizations. McKinsey experts offer a series of steps supply-chain leaders can use to determine whether a price increase is fair, starting by identifying the main cost inputs that have the highest level of change, estimating the percentage of the total cost these inputs make up, and calculating an acceptable price-increase range (exhibit). Response strategies include using a strong fact base for win–win negotiating and exploring new suppliers.

A series of McKinsey consumer surveys and interviews indicated unprecedented behavioral-health challenges facing Generation Z and stark differences among generations. Gen Z respondents were more likely than other generations to report having been diagnosed with a mental-health or substance-use issue, as well as more likely to have sought no treatment for the problem. Gen Z respondents were also two to three times more likely than other generations to report thinking about, planning, or attempting suicide in the 12 months spanning late 2019 to late 2020.

There could be a postpandemic boom on the horizon, but it will likely depend on business leaders’ ability to respond to productivity and growth “jolts” caused by the pandemic. The onset of COVID-19 brought a set of discontinuities that drove the first jolt to growth and productivity. Now, near-term uncertainties pose risks to growth; however, responding effectively could translate to a second jolt. The potential third and final jolt may be the largest as companies reshape their long-term strategies to reflect—and define—the next normal.

On the McKinsey on Government podcast, McKinsey partner Tony D’Emidio and associate partner Marcy Jacobs discuss how the pandemic forced many government agencies to modernize the customer experience (CX) amid high demand for unemployment and healthcare assistance. Transparency has improved, but there is more work to do so that when citizens fill out applications or forms, they get status updates instead of just wondering what happened. Another insight: better CX brings costs down because satisfied customers call with fewer questions.

Road freight accounts for 53 percent of CO 2 emissions within global trade-related transport, a share expected to rise to 56 percent by 2050 if current trends continue. Road Freight Zero: Pathways to faster adoption of zero-emission trucks is a joint publication by the World Economic Forum and McKinsey that describes how countries can reach their emissions goals for road freight.
With a market of more than $2.8 trillion worldwide, fragmented retail is poised to be transformed by “eB2B” players : portals and applications that replace the in-person sales model for small retailers and restaurants. By understanding the market structure and properly setting the scale and speed of change, companies can design an eB2B solution capable of disruption.
Reaching net zero in the cement and construction value chain by 2050 will require the buildings and construction industry to decarbonize three times faster over the next 30 years versus the previous 30. At the COP26 Climate Change Conference in Glasgow, Scotland, McKinsey brought together global property owners, contractors, materials suppliers, investors, equipment manufacturers, and disruptors to define the path forward. Among the takeaways: the industry can boost innovation by developing common standards and shared R&D resources.

What makes a CEO great? In this edition of Author Talks , McKinsey senior partners Carolyn Dewar, Scott Keller, and Vik Malhotra discuss their new book, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest (Scribner, March 2022). The authors interviewed 67 CEOs worldwide who met their criteria for excellence and diversity of both background and approach and identified keys to excellence that can provide lessons for any type of leader.

COVID-19: Briefing note #87, January 12, 2022

People are the fuel that will power the next industrial revolution..

Amid the Omicron surge, it’s perhaps poignant to note that all the advanced technology in the world means nothing without a population capable of adopting it and creating with it. COVID-19 vaccines are a good example of a technology that depends on people’s acceptance. This week, McKinsey explored how people in various industries and sectors relate to technology and the power of these interactions.

The McKinsey Talks Operations podcast brings together the CEOs of Flex, Protolabs, and Western Digital to discuss why the Fourth Industrial Revolution will be people powered . Digital manufacturing and production will change how the world makes goods but only if there is training and development to teach workers the skills to use these technologies. With the current labor mismatch in many countries, now is the time to further engage workers for a digitally enabled future.

With Fourth Industrial Revolution technologies in the hands of a workforce empowered with the skills needed to use them, an organization’s digital-transformation journey can move from aspiration to reality.

A pivot to telemedicine, remote work, and other technologies helped a leader in pediatric medicine manage the onslaught of COVID-19. Boston Children’s Hospital president and CEO Dr. Kevin Churchwell calls for more innovation to cope with a sharp rise in children and young adults with behavioral- and mental-health issues. This generation of kids is being reared under physical distancing, lockdowns, and school closures. Churchwell believes that those presenting with mental-health issues would benefit from a tech-enabled continuum of care that encompasses the family, the primary-care pediatrician, the school system, the hospital, and the state.

Sarah Bond, Microsoft’s corporate vice president for game creator experience and ecosystem at Xbox , describes how recognizing that game playing is a fundamental human trait helped Microsoft create its “ubiquitous global gaming ecosystem.” Investments in cloud gaming, the Game Pass subscription service, and cross-platform play allow gamers to participate anywhere, anytime, on any device.

Tulsa Remote, a program that enabled Tulsa, Oklahoma, to attract 1,300 remote workers to the area, also prioritizes the human need for connection. In addition to giving relocators $10,000, the program provides membership to a local coworking space and assists in finding housing. Events, both virtual and in-person, are intended to mitigate the potential isolation of remote work. The initiative has attracted 50,000 applicants and is making a meaningful impression on the local economy.

In a typical organization, only a specific department and designated functions are accountable for quality in design, development, operations, and even postmarket activities. But in a smart-quality organization, everyone owns quality . Pharmaceutical and medtech companies can create value by redesigning key quality processes along these principles.

As the move toward cleaner technologies progresses, the metals and mining sector will provide the raw materials required for the energy transition . The required pace of transition means that the availability of certain raw materials will need to scale up quickly—and, in certain cases, at volumes ten times or more than the current market size. We expect materials shortages, price fly-ups, and the need for technological innovation and substitutions.
Stakeholder capitalism asks leaders to prioritize long-termism over short-term gain. In the latest episode of the Inside the Strategy Room podcast, senior partner Dame Vivian Hunt and senior adviser to McKinsey Bruce Simpson, CEO of the Stephen A. Schwarzman Foundation, discuss research and experience that strongly link stakeholder capitalism to traditional sources of value.

What makes a CEO great? In a recent edition of Author Talks , McKinsey senior partners Carolyn Dewar, Scott Keller, and Vik Malhotra discuss their new book, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest (Scribner, March 2022). The authors interviewed 67 CEOs worldwide who met their criteria for excellence and diversity of both background and approach and identified keys to excellence that can provide lessons for any type of leader.

Also in Author Talks , Tareq Azim, founder of Empower Gym, trainer of NFL greats, and creator of the Afghan Women’s Boxing Federation, talks about his new book, Empower: Conquering the Disease of Fear (Simon & Schuster, January 2022), which was coauthored with Seth Davis. Azim discusses how he created a place for women to practice the most male-dominated activity in the most male-dominated society of all time and how anyone can find inner strength.

COVID-19: Briefing note #86, January 5, 2022

Omicron demands renewed focus on familiar pandemic themes..

A new year is here, but COVID-19’s latest surge feels so very last year—not to mention the year before that. To kick off 2022, McKinsey looked at issues that many people thought would have started to resolve as the virus died down, but which instead require renewed engagement. Topping our list this week are employee burnout and hits to tourism. But there is positive news as well: reports on the state of mobility and pharmaceuticals reflect that pandemic-inspired changes are leading some industries in new directions.

Compared with nonparents, employed parents are more likely to miss days of work because they are experiencing symptoms of burnout (exhibit). Companies need to understand what the compound pressures of employment and parenting during a pandemic are doing to these workers and consider a list of interventions to counteract their experience of burning the candle at both ends.

Women also are reporting higher-than-average rates of burnout. In a new episode of The McKinsey Podcast , senior partners Alexis Krivkovich and Lareina Yee discuss results from the recently released Women in the Workplace 2021 report. Forty-two percent of women report being burned out , a percentage that is higher than it was last year and higher than it is for men. Reasons include the fact that one in three women, and 60 percent of mothers with young children, spend five or more hours a day on housework and caregiving.

Early January is when many of us go on a diet and re-up at the gym. Here’s another tune-up option: take our “Can you turn attrition into attraction?” quiz to test how good you are at combatting burnout, rewarding employees in meaningful ways, and strengthening bonds with your teams.

Our “ year in review ” recap of 2021 highlights themes that many were hoping to leave behind, including the pandemic and the Great Resignation, as well as aspirations, such as inclusive growth and digital transformation, that will only grow in importance. The “ year in images ” collection showcases the most evocative art we published last year, while the “ year in charts ” collection tells visual stories about virus cases and vaccination rates, diversity targets and employee experiences, and how sustainable growth might be attained.

Another consequence of COVID-19 is the devastation wrought on tourism markets worldwide. We looked at a key US market and found that the financial impact of the pandemic on New York City is six times that of the September 11 attacks, costing the city $1.2 billion in lost tourism-related tax revenue. New York can reinvigorate its tourism industry by encouraging domestic travel and by reimagining business travel.

McKinsey reflected upon how the pandemic has affected mobility and where the sector is headed . Among the findings: half of the consumers in our recent Global COVID-19 Automotive & Mobility Consumer Survey stated a clear preference to travel less than they did before the COVID-19 pandemic. Among the forecasts: by 2035, in an accelerated scenario, the largest automotive markets in the world (that is, China, the European Union, and the United States) will be fully electric.

The pandemic has also reshaped the pharmaceuticals industry , and changes are still under way. We conducted a survey of senior executives in commercial roles at global pharma companies and found that more than 80 percent think that companies will fully embrace agile ways of working, and 66 percent believe that companies will move away from the traditional sales rep model because of restricted access, virtual interactions, and perceived low return on investment.

Here are some of this week’s other key findings from our research:

Quantum computing is about a decade away from widespread commercial application. Less well known, but also important, are two related technologies that could become available much earlier: quantum sensing and quantum communication . We explore the market landscape for both, looking at opportunities, risks, and demand.
Based on the results of our latest McKinsey Global Survey , we identify the different stages of a transformation’s life cycle to understand where value is lost and what companies can do to preserve it. According to our analysis, three core actions are especially predictive of value capture.
One way to accelerate decarbonization in the shipping sector is to implement “green corridors”: specific trade routes between major port hubs where zero-emission solutions are supported. A new report, The next wave: Green corridors , probes the feasibility of two such selected corridors—with encouraging results.

Two books in our Author Talks series address the workplace issues so prevalent in our research from this past year. Joan C. Williams, distinguished professor of law and chair of the Hastings Foundation, discusses her latest book, Bias Interrupted: Creating Inclusion for Real and for Good (Harvard Business Review Press, November 2021). Jennifer Moss, Harvard Business Review contributor and nationally syndicated radio columnist, shares her recent work, The Burnout Epidemic: The Rise of Chronic Stress and How We Can Fix It (Harvard Business Review Press, September 2021).

For McKinsey’s 2021 perspectives on the business impact of COVID-19 , visit our archive of several dozen briefing notes published throughout the year.

Matt Craven is a partner in McKinsey’s Silicon Valley office; Linda Liu is a partner in the New York office, where Matt Wilson is a senior partner; and Mihir Mysore is a partner in the Houston office.

This article was edited by Mark Staples, an executive editor in the New York office.

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COVID-19: Where we’ve been, where we are, and where we’re going

Ten lessons from the first two years of COVID-19

research about online business in pandemic

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Pandemic’s E-commerce Surge Proves Less Persistent, More Varied

Spikes in the share of online spending are dissipating overall, but there’s significant variation by industry

There’s no doubt that e-commerce helped many navigate the pandemic, from online shopping to curbside pickup to food delivery. But as we slowly emerge from lockdowns and other restrictions, it’s less clear how this shift to digital commerce may evolve across economies and industries.

This raises questions about how much digital consumption increased, whether the crisis widened the digital divide or spurred economies with little e-commerce to catch up, how permanent the shift to online sales will be, and what factors explain deviations between economies and sectors.

We investigated these questions in new research that uses a unique database of aggregated and anonymized transactions through the Mastercard network from across 47 countries from January 2018 to September 2021. We found that the share of online spending rose more in economies where e-commerce already played a large role—and that the increase is reversing as the pandemic recedes.

This research, a new partnership between Mastercard, the International Monetary Fund and Harvard Business School, shows how private-sector data can help advance empirical economics and will be the first in a series of such studies.

Variation across economies

On average, the online share of total spending rose sharply from 10.3 percent in 2019 to 14.9 percent at the peak of the pandemic, but then fell to 12.2 percent in 2021.

Though the latest online share of spending is higher than before the pandemic started, it’s only 0.6 percentage points above the growth trend for e-commerce had the crisis not happened. While most economies are now below those peak levels, there are still significant differences among countries.

We find that e-commerce increased more in economies with a higher pre-COVID share of online transactions in total consumption, exacerbating the digital divide across economies. For example, Singapore, Canada and the United Kingdom had high shares to begin with, and their online penetration went up even more during the pandemic. On the other hand, countries like Brazil and Thailand had low online shares pre-COVID, and they experienced less of an acceleration.

How persistent was the effect on online sales? Strikingly, the latest data suggest that the spikes in online spending shares are gradually dissipating at the aggregate level.

The average online spending share at the peak of the crisis was 4.3 percentage points above the level that would have been predicted before it hit. This difference drops to only 0.3 point by the end of our sample period.

Pandemic restrictions, fiscal support

One explanation for the variation across economies, and in online share of spending, may be the difference across pandemic-related mobility restrictions . Not surprisingly, economies with stricter limits saw much higher online spending.

In addition, fiscal support during the pandemic helped boost e-commerce penetration, likely by increasing consumption, which, in the presence of pandemic restrictions, could mostly be done online. Wealthier, more digitally mature economies also returned faster to pre-pandemic pace of online spending once the crisis receded.

Longer-lasting effects

One common narrative is that the pandemic accelerated digitalization, forcing consumers to learn how to shop online, and that this learning was here to stay. While our results support the quick uptake of e-commerce, the persistence of learning does not appear broad-based.

That said, we find significant variation by industry. The embrace of e-commerce appears to be particularly longer lasting in restaurants (more specifically in food delivery), health care (which includes telemedicine) and some categories of retail, including department stores, electronics, and clothing.

During the initial surge of the pandemic, there was a big demand for e-commerce relative to in-person commerce. Economies and sectors already familiar with some of the technologies were able to go online to a larger degree. While the pandemic forced consumers to learn quickly, our results suggest that early adopters further extended the use of e-commerce within their economies.

Further, there are two possible explanations for differences in the embrace of e-commerce across industries. First, this could reflect that mobility hasn’t fully recovered, along with the in-person nature of some sectors such as dining. Second, digitalization in these same sectors wasn’t particularly high before the pandemic, and t hose were the areas where COVID-19 propelled the shift the most.

The share of online spending rose and fell most dramatically in those economies and sectors where e-commerce was already thriving before the pandemic. Industries with lower levels of digital maturity—including retail, restaurants, and health care—have greater potential for e-commerce, particularly in less developed markets, making them potentially ripe for change.

Healing the Pandemic’s Economic Scars Demands Prompt Action

Rethinking Fiscal Policy and Debt for a Post-Pandemic World

Europe’s Consumers are Sitting on 1 Trillion Euros in Pandemic Savings

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Impact of COVID Pandemic on eCommerce

The COVID pandemic crisis has forced many small businesses to reassess the decades-old traditional business models or face closing permanently. New and existing technologies are thrust to the forefront of every business toolkit, and forward-looking businesses are addressing talent questions that arise from these new digital business skillsets.

Business learned to adapt to the COVID pandemic and the new digital needs.

A Global Post-Crisis Bounce in eCommerce Sales?

Risk of further business closures from COVID-related disruptions, in addition to the inherent financial fragility of business, paints a grim forecast for many businesses still open. Or is this just an opinion based on a lack of data?

A small ray of hope for business amidst the darkness brought by the COVID pandemic.

In the chart below we see a distinct upward jog in total global retail sales from 2019-2020, giving a strong boost to a steady 8% growth in retail ecommerce sales worldwide forecast through 2024 .This shows us an increase in online retail sales as a result of the paradigm shift that COVID disruptions have brought to business.

eCommerce Share of Total Global Retail Sales 2015 to 2024

Pandemic Impact to Worldwide Consumer Behavior

As various pandemic-related business restrictions that prevented in-person activities crept across the world’s regions, business turned to the pandemic-proof ecommerce sales channels for basic survival. Online, global consumers could not stop purchasing through their favorite websites (44% of global digital purchases) and online marketplaces (47% of global digital purchases). In response to this consumer migration to digital, Brazil , Spain , Japan saw the largest increase in number of businesses selling online as a reaction to the pandemic.

Share of Small B2B Companies Selling Through eCommerce By Country

In the chart below we see a forecast increase of 19% n worldwide ecommerce revenue between pre-and-post COVID-19 timeframes in 2020. Food & Personal Care products show the most growth with a forecast increase of 26% of revenue as a result of consumer transition to online sales channels.

Worldwide eCommerce Revenue Forecast 2020 in Billion USD

Pandemic Impact to Global Small B2B

The COVID pandemic has impacted business countries around the globe differently, creating opportunities for some where business was once lost. Small B2B companies in the United Kingdom and Brazil for example had significant increases in online revenue from their pre-COVID online sales figures.

Share of eCommerce Revenue of Small and Medium B2B Companies By Country 2020

Boosted by Pandemic, Cross-Border eCommerce Continues to Grow

The data tells us that COVID pandemic-related business restrictions have forced a global business paradigm shift towards the digital economy, which has negatively impacted traditional business models while also creating opportunity through sales diversification online.

Despite obvious devastation to economies worldwide, data shows ecommerce sales have responded positively.

This chart shows us clearly the impact to global ecommerce revenues the pandemic has had, adding an additional 19% sales growth for 2020, and additional 22% sales growth to the existing 9% and 12% regular forecast sales growth rates, respectively.

Global eCommerce Revenue Forecast in Billion USD 2021

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The rise of the have a go entrepreneur: how to set up an online business for success during the pandemic

Many of us have faced work challenges due to the long-term restrictions implemented as a result of the ongoing Covid-19 pandemic, with unemployment estimated to be at its highest since 2016 at 4.9%.

However, 2020 is estimated to have seen a 12% growth in new businesses compared to the previous year and, according to a study from Growth Intelligence, the pandemic resulted in more than 85,000 online businesses being established during the height of national lockdown last year. The fashion and clothing sector saw the biggest uplift in new e-commerce businesses, with 8,665, followed by manufacturing (7,129) and food and drink retail (4,156).

With the demand for online business set to increase further during the current lockdown, leading business expert, Andres Perez, Director at The University of Law (ULaw) Business School , highlights the five best practices to help get your business venture off to a flying start:

Identify your point of difference

For any business to be successful the product or service being offered needs to not only appeal to customers, but also offer something unique. Being in direct competition with other brands which may be much better established could prove challenging, so spend time defining what sets you apart from the competition from the start.

Mr Perez adds: “Inspiration to find a gap in the market can often come from looking at your hobbies and passions, to identify if there is something you could provide that is better or varies from what is already available. It is also important to test your idea on potential customers. If you have a food product for example, ask your friends and family for honest feedback before rolling it out to market.”

Do your consumer research

Once you have established where your business will meet consumer demand, Mr Perez advises it is vital to do your due diligence when analysing the industry you’ll be entering and the customer behaviour within it.

If you have a website, Google Analytics can provide invaluable data on how your audience and customers interact, including what content and products are of the most interest. Other free Google tools, such as Google Search Trends, can give you a good idea of what people are searching for online, which can help to inform content or product development. Making use of social media to discover trends of conversation within a sector will also help you tailor your product or service to have an impact.

Do what you can on a low budget

The most likely scenario is you’ll be starting a new business project with little to no money, but you can achieve a lot through investing nothing but your own time. The logistics of setting up a business costs just £12, whilst designing a basic website in the first instance can be done for free on the likes of Wordpress to establish a base of operations for your brand.

Making use of social media is a must in order to network and promote your service or ideas for free and get your brand known and start building your reputation, says Mr Perez. There are endless free learning resources available to help you develop an appropriate strategy, such as Google’s Digital Garage and Moz’s beginner’s guide to social media .

Design a business plan

Establishing a business plan is invaluable as it will enable you to identify the business’ short- and long-term objectives as well as an outline of how to achieve them. This can include anything from how you intend to promote your product, to investment in growth, and will ensure that anyone who gets involved in the project is on the same page and striving towards the same goal.

Putting together a good business plan is relatively simple and should follow a simple structure. Start with an introduction outlining the key elements and goals of the business, before mapping out the official business model and structure. Once this is established, you should include a review of your product or service and a breakdown of the customer and market you are looking to target, followed by analysis of competitors. Finish off your plan with a clearly defined marketing and sales strategy, followed by a projection of finances to ensure your business is geared up to make a splash.

Know your obligations

When starting out with your own business, as well as establishing a good product, brand and strategy, it is just as important to make sure all the admin and legal requirements are dealt with. Be sure to register your company on Companies House, provide an appropriate name and address and swat up on what type of business it’ll be, such as a limited company or sole trader.

Once the legalities of your business are finalised, you’ll be required to set up appropriate finances, such as a business account, and be aware of which taxes you’ll be eligible to pay. Calculating the tax you pay can be confusing so keeping a record of all transactions and paperwork will save you a lot of hassle come the end of the financial year.

Andres Perez at ULaw Business School further commented: “Although the pandemic has presented some real challenges, the restrictions have given people time to pursue their own business opportunities online, from the comfort of their homes.

“Establishing a business around a passion is important and we saw a lot of small ventures catering to the needs of those living in a pandemic begin to thrive in 2020, such as quirky food services or those selling hand crafted clothes and jewellery.

“Being able to provide a product or service easily at home is the cornerstone of any successful business set up in lockdown and we hope the advice we’ve provided will inspire many aspiring entrepreneurs to take on a new project whilst living in such tight restrictions.”

To find out more about what courses are available to help you succeed in business, visit: https://www.law.ac.uk/study/undergraduate/business/

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The “New Normal” of Increased Online Business

The “new normal” of increased online business transactions, and revisiting revenue memorandum circular no. 55-2013.

by: Renz Homer S. Arreola

The COVID-19 pandemic has taken a significant toll on economies and people of all nations and of all ages, from all walks of life, across the globe.

the new normal of increased online business transactions

Social media and virtual meetings, domestically and across the globe, have become the “new normal” as people strive to keep normalcy in their lives amid pandemic restrictions. Here in the Philippines, Digital 2020 April Statshot report by Hootsuite and We Are Social revealed that 64% of Filipino internet users are spending more time on social media, with 23% indicating an increased activity in their online shopping activity.

With consumers resorting more to online shopping amid pandemic restrictions, entrepreneurs have embraced the digital phenomenon for online shopping even more. E-commerce websites such as Lazada and Shopee are at the forefront of these online shopping platforms with expected surges in sales revenues in millions of pesos. Technology has already transformed online business transactions into an infinite marketplace where conducting business has become more convenient and efficient for both vendors and vendees. The COVID-19 pandemic has made this marketplace a more obvious necessity.

With this surge in online sales and business activity, the government looks to remind online sellers of their tax obligations, with the Bureau of Internal Revenue’s (BIR) issuance of Revenue Memorandum Circular (RMC) No. 60-2020 entitled “Obligations of Persons Conducting Business Transactions Through any Forms of Electronic Media and Notice to Unregistered Businesses.” The Circular basically mandates all business owners who are engaged in an online business platform in any form, whether digital or electronic, to register their businesses with the BIR and pay taxes on their sales.

Under this RMC, online business entities and constituents are encouraged to register their businesses no later than July 31, 2020 to avoid penalties for late registration. In addition, they are encouraged to voluntarily declare their past transactions, and pay the taxes due thereon, without corresponding penalties if the declaration is done no later than July 31, 2020.

The above Circular is explicit that it covers not only partner sellers, but also other stakeholders, such as the payment gateways, delivery channels, internet service providers, and other facilitators. Do note that if online sellers are already registered with the BIR, but were not previously doing business online, these online sellers should revise their certificates of registration (with the BIR), to include “online selling”.

The Department of Finance (DOF) and the BIR were quick to explain that this RMC is a reminder to register, and pay the appropriate taxes due, referring to RMC No. 55-2013, dated 05 August 2013. Given this reference, it would be best to review RMC No. 55-2013.

Revisiting RMC No. 55-2013 reveals that online sellers and other facilitators of online trading have different functions and responsibilities. Individuals who have obligations relative to online business transactions are not limited to those who are e-commerce business owners that possess websites and sell their goods and services online, but it includes those “online intermediaries” who are third parties that offer intermediation services between the online sellers and buyers. The intermediaries receive commissions as they act as channels for goods or services offered by a supplier to a consumer. The relationship between the intermediaries and the online sellers is akin to that of principal-agent relationship. All considered, their obligations and duties to different types of online transactions are entirely different. And what are online transactions? RMC No. 55-2013 refers to the following as the more common online transactions: (A) online shopping or retailing, involving consumers directly buying goods or services from a seller over the internet without an intermediary service; (B) online intermediary service, involving an intermediary/third party offering intermediation services between two trading parties (as discussed above); (C) online advertisement/classified ads, involving a form of promotion that uses the internet to deliver marketing messages to attract customers, and (D) online auctions, which are auctions conducted through the internet via an online service provider that specifically hosts such auctions.

RMC No. 55-2013 likewise provides for more detailed instructions on the obligations of the parties to online transactions with regard the issuances of ORs, depending on the manner of payment to the online seller, whether it be through cash on delivery, through bank deposits, or through credit cards. These instructions likewise consider the details of the abovementioned online transactions.

Finally, RMC No. 55-2013 details the BIR administrative obligations of parties to online transactions as: (1) registration with the BIR; (2) securing the required Authority to Print (ATP) invoices/receipts and register books of accounts for use in business; (3) issue the required invoices or ORs, manually or electronically; (4) withhold the applicable taxes and remit the same to the BIR; (5) file applicable tax returns on or before the due dates, pay correct internal revenue taxes, and submit information returns and other tax compliance reports; and (6) keep books of accounts and other business/accounting records within the time prescribed by law. These obligations are generally restated in RMC No. 60-2020.

Given the lack of details in RMC No. 60-2020, and the public outcry the RMC has generated, maybe the BIR can consider the following to clarify this reminder: (a) issue an extension of the deadline for registration; (b) provide specific details on income tax and value-added tax exemptions, and the qualifications for exemptions, whether it be in the Tax Code or in special laws, like the Barangay Micro Business Enterprises (BMBEs) Act of 2002; (c) reiterate the specific obligations with regard the issuance of invoices/ORs, so that all parties to online transactions will be informed, and (d) the specific requirements for filing of the various returns. Surely, the just enforcement of tax laws merits the detailed clarification of the laws, rules and regulations imposed on taxpayers.

Renz Homer S. Arreola is a Supervisor from the Tax Group of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International. KPMG RGM&Co. has been recognized as a Tier 1 tax practice and Tier 1 transfer pricing practice by the International Tax Review.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.

The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International or KPMG RGM&Co. For comments or inquiries, please email [email protected] or [email protected] .

© 2024 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit https://kpmg.com/governance .

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The Internet and the Pandemic

90% of Americans say the internet has been essential or important to them, many made video calls and 40% used technology in new ways. But while tech was a lifeline for some, others faced struggles

Table of contents.

1. How the internet and technology shaped Americans’ personal experiences amid COVID-19
2. Parents, their children and school during the pandemic
3. Navigating technological challenges
4. The role of technology in COVID-19 vaccine registration
Acknowledgments
Methodology

Pew Research Center has a long history of studying technology adoption trends and the impact of digital technology on society. This report focuses on American adults’ experiences with and attitudes about their internet and technology use during the COVID-19 outbreak. For this analysis, we surveyed 4,623 U.S. adults from April 12-18, 2021. Everyone who took part is a member of the Center’s American Trends Panel (ATP), an online survey panel that is recruited through national, random sampling of residential addresses. This way nearly all U.S. adults have a chance of selection. The survey is weighted to be representative of the U.S. adult population by gender, race, ethnicity, partisan affiliation, education and other categories. Read more about the ATP’s methodology .

Chapter 1 of this report includes responses to an open-ended question and the overall report includes a number of quotations to help illustrate themes and add nuance to the survey findings. Quotations may have been lightly edited for grammar, spelling and clarity. The first three themes mentioned in each open-ended response, according to a researcher-developed codebook, were coded into categories for analysis.

Here are the questions used for this report , along with responses, and its methodology .

Technology has been a lifeline for some during the coronavirus outbreak but some have struggled, too

The coronavirus has transformed many aspects of Americans’ lives. It shut down schools, businesses and workplaces and forced millions to stay at home for extended lengths of time. Public health authorities recommended limits on social contact to try to contain the spread of the virus, and these profoundly altered the way many worked, learned, connected with loved ones, carried out basic daily tasks, celebrated and mourned. For some, technology played a role in this transformation.

Results from a new Pew Research Center survey of U.S. adults conducted April 12-18, 2021, reveal the extent to which people’s use of the internet has changed, their views about how helpful technology has been for them and the struggles some have faced.

The vast majority of adults (90%) say the internet has been at least important to them personally during the pandemic, the survey finds. The share who say it has been essential – 58% – is up slightly from 53% in April 2020. There have also been upticks in the shares who say the internet has been essential in the past year among those with a bachelor’s degree or more formal education, adults under 30, and those 65 and older.

A large majority of Americans (81%) also say they talked with others via video calls at some point since the pandemic’s onset. And for 40% of Americans, digital tools have taken on new relevance: They report they used technology or the internet in ways that were new or different to them. Some also sought upgrades to their service as the pandemic unfolded: 29% of broadband users did something to improve the speed, reliability or quality of their high-speed internet connection at home since the beginning of the outbreak.

Still, tech use has not been an unmitigated boon for everyone. “ Zoom fatigue ” was widely speculated to be a problem in the pandemic, and some Americans report related experiences in the new survey: 40% of those who have ever talked with others via video calls since the beginning of the pandemic say they have felt worn out or fatigued often or sometimes by the time they spend on them. Moreover, changes in screen time occurred for Americans generally and for parents of young children . The survey finds that a third of all adults say they tried to cut back on time spent on their smartphone or the internet at some point during the pandemic. In addition, 72% of parents of children in grades K-12 say their kids are spending more time on screens compared with before the outbreak. 1

For many, digital interactions could only do so much as a stand-in for in-person communication. About two-thirds of Americans (68%) say the interactions they would have had in person, but instead had online or over the phone, have generally been useful – but not a replacement for in-person contact. Another 15% say these tools haven’t been of much use in their interactions. Still, 17% report that these digital interactions have been just as good as in-person contact.

About two-thirds say digital interactions have been useful, but not a replacement for in-person contact

Some types of technology have been more helpful than others for Americans. For example, 44% say text messages or group messaging apps have helped them a lot to stay connected with family and friends, 38% say the same about voice calls and 30% say this about video calls. Smaller shares say social media sites (20%) and email (19%) have helped them in this way.

The survey offers a snapshot of Americans’ lives just over one year into the pandemic as they reflected back on what had happened. It is important to note the findings were gathered in April 2021, just before all U.S. adults became eligible for coronavirus vaccine s. At the time, some states were beginning to loosen restrictions on businesses and social encounters. This survey also was fielded before the delta variant became prominent in the United States, raising concerns about new and evolving variants .

Here are some of the key takeaways from the survey.

Americans’ tech experiences in the pandemic are linked to digital divides, tech readiness

Some Americans’ experiences with technology haven’t been smooth or easy during the pandemic. The digital divides related to internet use and affordability were highlighted by the pandemic and also emerged in new ways as life moved online.

For all Americans relying on screens during the pandemic, connection quality has been important for school assignments, meetings and virtual social encounters alike. The new survey highlights difficulties for some: Roughly half of those who have a high-speed internet connection at home (48%) say they have problems with the speed, reliability or quality of their home connection often or sometimes. 2

Beyond that, affordability remained a persistent concern for a portion of digital tech users as the pandemic continued – about a quarter of home broadband users (26%) and smartphone owners (24%) said in the April 2021 survey that they worried a lot or some about paying their internet and cellphone bills over the next few months.

From parents of children facing the “ homework gap ” to Americans struggling to afford home internet , those with lower incomes have been particularly likely to struggle. At the same time, some of those with higher incomes have been affected as well.

60% of broadband users with lower incomes often or sometimes have connection problems, and 46% are worried at least some about paying for broadband

Affordability and connection problems have hit broadband users with lower incomes especially hard. Nearly half of broadband users with lower incomes, and about a quarter of those with midrange incomes, say that as of April they were at least somewhat worried about paying their internet bill over the next few months. 3 And home broadband users with lower incomes are roughly 20 points more likely to say they often or sometimes experience problems with their connection than those with relatively high incomes. Still, 55% of those with lower incomes say the internet has been essential to them personally in the pandemic.

At the same time, Americans’ levels of formal education are associated with their experiences turning to tech during the pandemic.

Adults with a bachelor’s, advanced degree more likely than others to make daily video calls, use tech in new ways, consider internet essential amid COVID-19

Those with a bachelor’s or advanced degree are about twice as likely as those with a high school diploma or less formal education to have used tech in new or different ways during the pandemic. There is also roughly a 20 percentage point gap between these two groups in the shares who have made video calls about once a day or more often and who say these calls have helped at least a little to stay connected with family and friends. And 71% of those with a bachelor’s degree or more education say the internet has been essential, compared with 45% of those with a high school diploma or less.

More broadly, not all Americans believe they have key tech skills. In this survey, about a quarter of adults (26%) say they usually need someone else’s help to set up or show them how to use a new computer, smartphone or other electronic device. And one-in-ten report they have little to no confidence in their ability to use these types of devices to do the things they need to do online. This report refers to those who say they experience either or both of these issues as having “lower tech readiness.” Some 30% of adults fall in this category. (A full description of how this group was identified can be found in Chapter 3. )

‘Tech readiness,’ which is tied to people’s confident and independent use of devices, varies by age

These struggles are particularly acute for older adults, some of whom have had to learn new tech skills over the course of the pandemic. Roughly two-thirds of adults 75 and older fall into the group having lower tech readiness – that is, they either have little or no confidence in their ability to use their devices, or generally need help setting up and learning how to use new devices. Some 54% of Americans ages 65 to 74 are also in this group.

Americans with lower tech readiness have had different experiences with technology during the pandemic. While 82% of the Americans with lower tech readiness say the internet has been at least important to them personally during the pandemic, they are less likely than those with higher tech readiness to say the internet has been essential (39% vs. 66%). Some 21% of those with lower tech readiness say digital interactions haven’t been of much use in standing in for in-person contact, compared with 12% of those with higher tech readiness.

46% of parents with lower incomes whose children faced school closures say their children had at least one problem related to the ‘homework gap’

As school moved online for many families, parents and their children experienced profound changes. Fully 93% of parents with K-12 children at home say these children had some online instruction during the pandemic. Among these parents, 62% report that online learning has gone very or somewhat well, and 70% say it has been very or somewhat easy for them to help their children use technology for online instruction.

Still, 30% of the parents whose children have had online instruction during the pandemic say it has been very or somewhat difficult for them to help their children use technology or the internet for this.

Remote learning has been widespread during the pandemic, but children from lower-income households have been particularly likely to face ‘homework gap’

The survey also shows that children from households with lower incomes who faced school closures in the pandemic have been especially likely to encounter tech-related obstacles in completing their schoolwork – a phenomenon contributing to the “ homework gap .”

Overall, about a third (34%) of all parents whose children’s schools closed at some point say their children have encountered at least one of the tech-related issues we asked about amid COVID-19: having to do schoolwork on a cellphone, being unable to complete schoolwork because of lack of computer access at home, or having to use public Wi-Fi to finish schoolwork because there was no reliable connection at home.

This share is higher among parents with lower incomes whose children’s schools closed. Nearly half (46%) say their children have faced at least one of these issues. Some with higher incomes were affected as well – about three-in-ten (31%) of these parents with midrange incomes say their children faced one or more of these issues, as do about one-in-five of these parents with higher household incomes.

More parents say their screen time rules have become less strict under pandemic than say they’ve become more strict

Prior Center work has documented this “ homework gap ” in other contexts – both before the coronavirus outbreak and near the beginning of the pandemic . In April 2020, for example, parents with lower incomes were particularly likely to think their children would face these struggles amid the outbreak.

Besides issues related to remote schooling, other changes were afoot in families as the pandemic forced many families to shelter in place. For instance, parents’ estimates of their children’s screen time – and family rules around this – changed in some homes. About seven-in-ten parents with children in kindergarten through 12th grade (72%) say their children were spending more time on screens as of the April survey compared with before the outbreak. Some 39% of parents with school-age children say they have become less strict about screen time rules during the outbreak. About one-in-five (18%) say they have become more strict, while 43% have kept screen time rules about the same.

More adults now favor the idea that schools should provide digital technology to all students during the pandemic than did in April 2020

Americans’ tech struggles related to digital divides gained attention from policymakers and news organizations as the pandemic progressed.

On some policy issues, public attitudes changed over the course of the outbreak – for example, views on what K-12 schools should provide to students shifted. Some 49% now say K-12 schools have a responsibility to provide all students with laptop or tablet computers in order to help them complete their schoolwork during the pandemic, up 12 percentage points from a year ago.

Growing shares across political parties say K-12 schools should give all students computers amid COVID-19

The shares of those who say so have increased for both major political parties over the past year: This view shifted 15 points for Republicans and those who lean toward the GOP, and there was a 9-point increase for Democrats and Democratic leaners.

However, when it comes to views of policy solutions for internet access more generally, not much has changed. Some 37% of Americans say that the government has a responsibility to ensure all Americans have high-speed internet access during the outbreak, and the overall share is unchanged from April 2020 – the first time Americans were asked this specific question about the government’s pandemic responsibility to provide internet access. 4

Democrats are more likely than Republicans to say the government has this responsibility, and within the Republican Party, those with lower incomes are more likely to say this than their counterparts earning more money.

Video calls and conferencing have been part of everyday life

Americans’ own words provide insight into exactly how their lives changed amid COVID-19. When asked to describe the new or different ways they had used technology, some Americans mention video calls and conferencing facilitating a variety of virtual interactions – including attending events like weddings, family holidays and funerals or transforming where and how they worked. 5 From family calls, shopping for groceries and placing takeout orders online to having telehealth visits with medical professionals or participating in online learning activities, some aspects of life have been virtually transformed:

“I’ve gone from not even knowing remote programs like Zoom even existed, to using them nearly every day.” – Man, 54

“[I’ve been] h andling … deaths of family and friends remotely, attending and sharing classical music concerts and recitals with other professionals, viewing [my] own church services and Bible classes, shopping. … Basically, [the internet has been] a lifeline.” – Woman, 69

“I … use Zoom for church youth activities. [I] use Zoom for meetings. I order groceries and takeout food online. We arranged for a ‘digital reception’ for my daughter’s wedding as well as live streaming the event.” – Woman, 44

Among those who have used video calls during the outbreak, 40% feel fatigued or worn out at least sometimes from time spent on these calls

When asked about video calls specifically, half of Americans report they have talked with others in this way at least once a week since the beginning of the outbreak; one-in-five have used these platforms daily. But how often people have experienced this type of digital connectedness varies by age. For example, about a quarter of adults ages 18 to 49 (27%) say they have connected with others on video calls about once a day or more often, compared with 16% of those 50 to 64 and just 7% of those 65 and older.

Even as video technology became a part of life for users, many accounts of burnout surfaced and some speculated that “Zoom fatigue” was setting in as Americans grew weary of this type of screen time. The survey finds that some 40% of those who participated in video calls since the beginning of the pandemic – a third of all Americans – say they feel worn out or fatigued often or sometimes from the time they spend on video calls. About three-quarters of those who have been on these calls several times a day in the pandemic say this.

Fatigue is not limited to frequent users, however: For example, about a third (34%) of those who have made video calls about once a week say they feel worn out at least sometimes.

These are among the main findings from the survey. Other key results include:

Some Americans’ personal lives and social relationships have changed during the pandemic: Some 36% of Americans say their own personal lives changed in a major way as a result of the coronavirus outbreak. Another 47% say their personal lives changed, but only a little bit. About half (52%) of those who say major change has occurred in their personal lives due to the pandemic also say they have used tech in new ways, compared with about four-in-ten (38%) of those whose personal lives changed a little bit and roughly one-in-five (19%) of those who say their personal lives stayed about the same.

Even as tech helped some to stay connected, a quarter of Americans say they feel less close to close family members now compared with before the pandemic, and about four-in-ten (38%) say the same about friends they know well. Roughly half (53%) say this about casual acquaintances.

The majority of those who tried to sign up for vaccine appointments in the first part of the year went online to do so: Despite early problems with vaccine rollout and online registration systems , in the April survey tech problems did not appear to be major struggles for most adults who had tried to sign up online for COVID-19 vaccines. The survey explored Americans’ experiences getting these vaccine appointments and reveals that in April 57% of adults had tried to sign themselves up and 25% had tried to sign someone else up. Fully 78% of those who tried to sign themselves up and 87% of those who tried to sign others up were online registrants.

When it comes to difficulties with the online vaccine signup process, 29% of those who had tried to sign up online – 13% of all Americans – say it was very or somewhat difficult to sign themselves up for vaccines at that time. Among five reasons for this that the survey asked about, the most common major reason was lack of available appointments, rather than tech-related problems. Adults 65 and older who tried to sign themselves up for the vaccine online were the most likely age group to experience at least some difficulty when they tried to get a vaccine appointment.

Tech struggles and usefulness alike vary by race and ethnicity. Americans’ experiences also have varied across racial and ethnic groups. For example, Black Americans are more likely than White or Hispanic adults to meet the criteria for having “lower tech readiness.” 6 Among broadband users, Black and Hispanic adults were also more likely than White adults to be worried about paying their bills for their high-speed internet access at home as of April, though the share of Hispanic Americans who say this declined sharply since April 2020. And a majority of Black and Hispanic broadband users say they at least sometimes have experienced problems with their internet connection.

Still, Black adults and Hispanic adults are more likely than White adults to say various technologies – text messages, voice calls, video calls, social media sites and email – have helped them a lot to stay connected with family and friends amid the pandemic.

Tech has helped some adults under 30 to connect with friends, but tech fatigue also set in for some. Only about one-in-five adults ages 18 to 29 say they feel closer to friends they know well compared with before the pandemic. This share is twice as high as that among adults 50 and older. Adults under 30 are also more likely than any other age group to say social media sites have helped a lot in staying connected with family and friends (30% say so), and about four-in-ten of those ages 18 to 29 say this about video calls.

Screen time affected some negatively, however. About six-in-ten adults under 30 (57%) who have ever made video calls in the pandemic say they at least sometimes feel worn out or fatigued from spending time on video calls, and about half (49%) of young adults say they have tried to cut back on time spent on the internet or their smartphone.

Throughout this report, “parents” refers to those who said they were the parent or guardian of any children who were enrolled in elementary, middle or high school and who lived in their household at the time of the survey. ↩
People with a high-speed internet connection at home also are referred to as “home broadband users” or “broadband users” throughout this report. ↩
Family incomes are based on 2019 earnings and adjusted for differences in purchasing power by geographic region and for household sizes. Middle income is defined here as two-thirds to double the median annual family income for all panelists on the American Trends Panel. Lower income falls below that range; upper income falls above it. ↩
A separate Center study also fielded in April 2021 asked Americans what the government is responsible for on a number of topics, but did not mention the coronavirus outbreak. Some 43% of Americans said in that survey that the federal government has a responsibility to provide high-speed internet for all Americans. This was a significant increase from 2019, the last time the Center had asked that more general question, when 28% said the same. ↩
Quotations in this report may have been lightly edited for grammar, spelling and clarity. ↩
There were not enough Asian American respondents in the sample to be broken out into a separate analysis. As always, their responses are incorporated into the general population figures throughout this report. ↩

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COVID-19 has changed online shopping forever, survey shows

The pandemic has accelerated the shift towards a more digital world and triggered changes in online shopping behaviours that are likely to have lasting effects.

Woman accepts shopping ordered online from delivery person in a mask and gloves.

The COVID-19 pandemic has forever changed online shopping behaviours, according to a survey of about 3,700 consumers in nine emerging and developed economies.

The survey, entitled “ COVID-19 and E-commerce ”, examined how the pandemic has changed the way consumers use e-commerce and digital solutions. It covered Brazil, China, Germany, Italy, the Republic of Korea, Russian Federation, South Africa, Switzerland and Turkey.

Following the pandemic, more than half of the survey’s respondents now shop online more frequently and rely on the internet more for news, health-related information and digital entertainment.

Consumers in emerging economies have made the greatest shift to online shopping, the survey shows.

“The COVID-19 pandemic has accelerated the shift towards a more digital world. The changes we make now will have lasting effects as the world economy begins to recover,” said UNCTAD Secretary-General Mukhisa Kituyi.

He said the acceleration of online shopping globally underscores the urgency of ensuring all countries can seize the opportunities offered by digitalization as the world moves from pandemic response to recovery.

Online purchases rise but consumer spending falls

The survey conducted by UNCTAD and Netcomm Suisse eCommerce Association, in collaboration with the Brazilian Network Information Center (NIC.br) and Inveon, shows that online purchases have increased by 6 to 10 percentage points across most product categories.

The biggest gainers are ICT/electronics, gardening/do-it-yourself, pharmaceuticals, education, furniture/household products and cosmetics/personal care categories ( Figure 1 ).

Figure 1: Percentage of online shoppers making at least one online purchase every two months

However, average online monthly spending per shopper has dropped markedly ( Figure 2). Consumers in both emerging and developed economies have postponed larger expenditures, with those in emerging economies focusing more on essential products.

Tourism and travel sectors have suffered the strongest decline, with average spending per online shopper dropping by 75%.

Figure 2: Fall of average online spending per month since COVID-19, per product category

“During the pandemic, online consumption habits in Brazil have changed significantly, with a greater proportion of internet users buying essential products, such as food and beverages, cosmetics and medicines,” said Alexandre Barbosa, manager of the Regional Center of Studies on the Development of Information Society (Cetic.br) at the Brazilian Network Information Center (NIC.br).

Increases in online shopping during COVID-19 differ between countries, with the strongest rise noted in China and Turkey and the weakest in Switzerland and Germany, where more people were already engaging in e-commerce.

The survey found that women and people with tertiary education increased their online purchases more than others. People aged 25 to 44 reported a stronger increase compared with younger ones. In the case of Brazil, the increase was highest among the most vulnerable population and women.

Also, according to survey responses, small merchants in China were most equipped to sell their products online and those in South Africa were least prepared.

“Companies that put e-commerce at the heart of their business strategies are prepared for the post-COVID-19 era,” said Yomi Kastro, founder and CEO of Inveon. “There is an enormous opportunity for industries that are still more used to physical shopping, such as fast-moving consumer goods and pharmaceuticals.”

“In the post-COVID-19 world, the unparalleled growth of e-commerce will disrupt national and international retail frameworks,” said Carlo Terreni, President, NetComm Suisse eCommerce Association.

“This is why policymakers should adopt concrete measures to facilitate e-commerce adoption among small and medium enterprises, create specialized talent pools and attract international e-commerce investors.”

Digital giants grow stronger

According to the survey, the most used communication platforms are WhatsApp, Instagram and Facebook Messenger, all owned by Facebook.

However, Zoom and Microsoft Teams have benefitted the most from increases in the use of video calling applications in workplaces.

In China, the top communication platforms are WeChat, DingTalk and Tencent Conference, the survey shows.

Changes are here to stay

The survey results suggest that changes in online activities are likely to outlast the COVID-19 pandemic.

Most respondents, especially those in China and Turkey, said they’d continue shopping online and focusing on essential products in the future.

They’d also continue to travel more locally, suggesting a lasting impact on international tourism.

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Open Access

Peer-reviewed

Research Article

The impact of the COVID-19 pandemic on higher education: Assessment of student performance in computer science

Roles Conceptualization, Data curation, Formal analysis, Investigation, Methodology, Software, Supervision, Validation, Writing – original draft, Writing – review & editing

* E-mail: [email protected]

Affiliations Department of Computer Science, Lublin University of Technology, Lublin, Poland, Systems Research Institute, Polish Academy of Sciences, Warsaw, Poland

Roles Conceptualization, Formal analysis, Software, Validation, Visualization, Writing – original draft, Writing – review & editing

Affiliation Department of Computer Science, Lublin University of Technology, Lublin, Poland

Roles Data curation, Software

Małgorzata Charytanowicz,
Magdalena Zoła,
Waldemar Suszyński

Published: August 14, 2024
https://doi.org/10.1371/journal.pone.0305763
Reader Comments

The COVID-19 pandemic had radically changed higher education. The sudden transition to online teaching and learning exposed, however, some benefits by enhancing educational flexibility and digitization. The long-term effects of these changes are currently unknown, but a key question concerns their effect on student learning outcomes. This study aims to analyze the impact of the emergence of new models and teaching approaches on the academic performance of Computer Science students in the years 2019–2023. The COVID-19 pandemic created a natural experiment for comparisons in performance during in-person versus synchronous online and hybrid learning mode. We tracked changes in student achievements across the first two years of their engineering studies, using both basic (descriptive statistics, t-Student tests, Mann-Whitney test) and advanced statistical methods (Analysis of variance). The inquiry was conducted on 787 students of the Lublin University of Technology (Poland). Our findings indicated that first semester student scores were significantly higher when taught through online (13.77±2.77) and hybrid (13.7±2.86) approaches than through traditional in-person means as practiced before the pandemic (11.37±3.9, p-value < 0.05). Conversely, third semester student scores were significantly lower when taught through online (12.01±3.14) and hybrid (12.04±3.19) approaches than through traditional in-person means, after the pandemic (13.23±3.01, p-value < 0.05). However, the difference did not exceed 10% of a total score of 20 points. With regard to the statistical data, most of the questions were assessed as being difficult or appropriate, with adequate discrimination index, regardless of the learning mode. Based on the results, we conclude that we did not find clear evidence that pandemic disruption and online learning caused knowledge deficiencies. This critical situation increased students’ academic motivation. Moreover, we conclude that we have developed an effective digital platform for teaching and learning, as well as for a secure and fair student learning outcomes assessment.

Citation: Charytanowicz M, Zoła M, Suszyński W (2024) The impact of the COVID-19 pandemic on higher education: Assessment of student performance in computer science. PLoS ONE 19(8): e0305763. https://doi.org/10.1371/journal.pone.0305763

Editor: Prabhat Mittal, Satyawati College (Eve.), University of Delhi, INDIA

Received: October 15, 2023; Accepted: June 4, 2024; Published: August 14, 2024

Copyright: © 2024 Charytanowicz et al. This is an open access article distributed under the terms of the Creative Commons Attribution License , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Data Availability: All relevant data are available at the following link: https://zenodo.org/records/11583297 .

Funding: The author(s) received no specific funding for this work.

Competing interests: The authors have declared that no competing interests exist.

1. Introduction

The COVID-19 pandemic brought with it a number of health, economic and social consequences. Indeed, the spread of the SARS-CoV-2 virus turned out to be so dangerous that many countries implemented new regulations in the educational field to limit physical contact. The pandemic-induced school shutdowns and sudden transition to remote teaching and learning at all levels of education. This change-over generated a number of technical and social problems [ 1 – 6 ]. These problems had also affected the academic community, although online or blended learning methods were implemented before the COVID-19 pandemic [ 7 ].

On March 12, 2020, a state of epidemic emergency was declared in Poland, and a week later–a state of pandemic. In consequence, the Minister of Science and Higher Education issued a regulation on the temporary suspension of the functioning of education institutes, lasting from March 12 till 25 2020 [ 8 , 9 ]. On March 25, 2020, the education system, including higher education, was switched to online teaching and learning, as necessitated by the need to maintain social distancing measures. Universities had to adapt to the circumstances almost overnight. However, many universities were not fully prepared with regard to technical capabilities, educational resources and the skills of the teaching staff in organizing distance education [ 10 – 12 ]. Before the COVID-19 pandemic, the applicable regulations of the Ministry of Science and Higher Education did not encourage the authorities of most universities to invest in technologies for conducting fully remote studies. Poland was, however, not an exception in this respect. Many old, prestigious universities in Europe were also reserved about remote learning, and the virtual learning environment was mainly used as a teaching aid.

Fortunately, the information revolution had by this time developed more flexible approaches to learning with the form of Information and Communication Technology (ICT). Indeed, it is one of the leading factors that affect current teaching methodology [ 13 – 18 ]. E-learning systems, their accessibility and functionality, have provided new possibilities to acquire knowledge and to ease the burden of learning. As an outcome, remote teaching and learning are often seen as promising solutions that offer high flexibility and a learner-centered approach that enables students to learn at their own pace [ 19 , 20 ]. Thus, the role of the teacher in the classroom has transformed from that of being the font of knowledge, to an instructional manager identifying relevant resources and creating collaborative learning opportunities. Moreover, online assessments have become increasingly important and now represent one of the most critical aspects of the educational process. Unfortunately, the role of ICT in higher education is still somewhat controversial.

The extreme situation caused by the COVID-19 pandemic provided an opportunity to revise our approach both to traditional and online learning, yet also posing challenges for the future of education systems. The main question of our research was whether the sudden transition to online teaching and learning caused by the COVID-19 pandemic had a negative impact on students academic performance and upon the reliability of the assessment process. We believe that our study can help to reduce the controversies related to remote learning and teaching.

2. Related works

Before the year 2020, the principal recipients of remote education were adults participating in professional development courses [ 21 ]. The COVID-19 pandemic outbreak, however, resulted in increased interest in methods of education that do not require physical meeting between students and teachers. The closure of educational institutions to mitigate the spread of COVID-19 compelled schools and universities to find alternative ways of continuing their operations. This led to the widespread adoption of online learning (e-learning).

The use of e-learning platforms has enabled the transformation of the traditional model of education in which the lecturer transmitted knowledge, into a model of supervised self-education. A separate line of research has been dedicated to the impact of remote education on university students, who are predominantly young adults, and, as such, are less subject to parental supervision. Topics under study include student attitudes towards distance learning [ 22 , 23 ], the technologies and learning platforms utilized [ 24 – 26 ], and the impact of network quality on the smoothness of classes [ 22 , 27 ].

A relatively well researched aspect of e-learning is the analysis of its advantages and disadvantages in comparison to traditional learning [ 28 – 30 ], including its application during the COVID-19 pandemic [ 31 – 34 ]. Undoubtedly, remote education has its benefits, among others, flexibility, speed, time savings [ 35 , 36 ], as well as better use of the infrastructure and organizational savings for the institution [ 37 ]. Distance learning in the form of e-learning also comes with drawbacks, for example, limited interpersonal contacts [ 38 ], lack of immediate feedback [ 39 , 40 ], and problems with self-discipline and adaptability [ 41 – 43 ]. Considering its strengths and weaknesses, e-learning can be viewed as either a replacement or augmentation of traditional approaches to education.

An integral part of remote education is the verification of its results. The topic was covered in literature in the pre-COVID era [ 44 – 46 ], but much less so during the pandemic [ 47 , 48 ]. Our work focuses on the analysis of student performance under the e-learning setup during COVID-19 related confinement and afterwards. The differentiating characteristic of this paper is the fact that it covers a longer period of time, unlike some other research focusing only on a single academic semester [ 49 ].

The COVID-19 pandemic has provided the opportunity to advance usage of online platforms and digital media, as well as to create new education strategies. It should be noted that most students (and instructors) adapted successfully to online teaching and learning [ 50 , 51 ]. However, certain studies [ 52 – 54 ] have indicated negative student feedback. In the year 2023, education has returned to more traditional teaching/learning approaches after more than two years of online learning.

The outbreak of COVID-19 presented a serious challenge to academic education by enforcing a drastic change in the teaching methods. For this reason, we formulated the following research questions:

How had the COVID-19 pandemic change applied teaching and learning strategies?
Did the COVID-19 pandemic have a disruptive effect on the academic performance of students resulting in knowledge deficiency?
How did the change from in-person to online learning affect the reliability of student assessment?

The rest of the paper is structured as follows. Section 3 presents the context of the study, materials and methods. Section 4 explains the results obtained. Sections 5 and 6 conclude our work and describe limitations and future scope.

3. Materials and methods

3.1. design and context.

The research was conducted in the Department of Computer Science of the Lublin University of Technology in Poland, the largest public technical university in the Lublin voivodship. This was a cross-sectional study carried out among students who were enrolled in the first semester of engineering studies in the academic years 2019/2020, 2020/2021 and 2021/2022 (from October to July). Because of the COVID-19 pandemic, the courses of interest in this study were conducted in different delivery formats (in-person, synchronous online and hybrid).

Traditional in-person course delivery format included lectures and laboratories. The former involved, primarily, oral presentations given to a group of students. A teacher-centered approach to learning was applied with discussion and multimedia presentation, as well as whiteboard or chalkboard visual aids to emphasize important points in the lecture. Moreover, a Learning Management System (Moodle LMS) was incorporated within the lectures to develop, organize, deliver and manage didactic materials and assess the effectiveness of education via tests, surveys or assignments. This tool was also employed to provide discussion forums. The faculty used the activity Quiz as a student self-assessment tool, as well as to determine knowledge and skills.

With regard to laboratory work, practical classes were conducted in programming laboratories for the selected courses. In such a teaching/learning format, we found that most students preferred working alone or conducting discussions with their partners or their neighbors.

All students used online manuals or didactic materials delivered by Moodle LMS. Final exams were held at the University via Moodle LMS through in-person proctoring, as this approach allowed the introduction of a live person to monitor the activity of students in a testing environment.

In the synchronous online course format, students obtained theoretical and practical education entirely online via Microsoft Teams by way of video meetings and Moodle LMS. Meetings in Teams include audio, video and screen sharing. All lectures were delivered synchronously using MS Teams. Practical sessions were conducted through online synchronous video meetings in small student groups. Interaction occurred via the discussion board, while MS Teams was also employed to enable scheduled online consultations. Supporting materials (videos, presentations, tasks to do, quizzes, and other didactic materials) were provided to the students through the Moodle LMS. Final exams were conducted under controlled conditions via Moodle LMS through online live proctoring by accepting screen, video and audio sharing.

The hybrid course delivery format combined in-person and online strategies. Students obtained theoretical education entirely online as synchronous sessions by way of MS Teams and Moodle LMS, whilst practical education was obtained through the traditional in-person format, in small student groups. Final exams were held at the University via Moodle LMS through in-person proctoring.

We analyzed exam scores across the first two years of the engineering studies using anonymous data from the Moodle. The Research Ethics Committee of Lublin University of Technology approved the study (Ethical Approval Reference: 3/2023).

3.2. Course selection

The following criteria were used to select the courses:

the courses covered algorithms and programming,
the courses had unchanged objectives and learning outcomes during the investigated period,
the courses were conducted by the same instructors using to the same tools and methods.

Two compulsory courses met these criteria: 1 –Introduction to Computer Science and 2 –Numerical Analysis Algorithms. Both courses were conducted in the Polish language and they provided fundamental knowledge for all areas of Computer Science learning and skills development. Enrolled students were obligated to complete 30 lesson hours of theory and 30 lesson hours of practical experience within a course length of 15 weeks. In the full-time option, four hours of classes were given each course week, and were distributed into two two-hour sessions. Herein, the first consisted of a master class lecture and the second consisted of an interactive problem-based learning laboratory. In the part-time option, the number of in-person teaching hours was reduced to half and classes were held, on average, twice a month, on Saturday and Sunday.

The Introduction to Computer Science course is taught in the first year and is covered in the first semester. Students who successfully completed the course gained five credits, according to the European Credit Transfer and Accumulation System (ECTS). The intention of the offered course is to provide students with knowledge of standard algorithms and data structures, and to provide them with the skills to analyze both the theoretical complexity of algorithms and their practical behaviors. The course covers the following topics:

Introduction to algorithms and problem-solving techniques.
Basic programming concepts, types, sequential data structures.
Programming in Python.
Searching and sorting algorithms.
Examples of algorithms, algorithmic strategies.
Testing and documenting programming code.
Asymptotic notation and complexity analysis.
Analyzing program code for correctness, efficiency, and errors.
Automata theory and formal languages. Turing machine.
Classes P and NP.

The knowledge and skills to implement and solve algorithmic problems using the mentioned algorithms are developed using Python.

The Numerical Analysis Algorithms course is taught in the second year and is covered in the third semester. Successful completion awards students with five credits, according to ECTS. The primary objective of the course is to develop basic understanding of numerical algorithms, as well as the skills to implement algorithms to solve computer-based mathematical problems. The course covers the following topics:

Basic numerics, floating-point representation, convergence.
Horner’s scheme.
The theory of interpolation: Lagrange polynomial, Hermite interpolation, Neville’s iterative formula.
Least square approximation.
Numerical integration: Newton-Cotes formulas, Gaussian quadrature.
Direct methods for solving systems of linear equations: Gaussian elimination, LU factorization, Cholesky decomposition.
Householder method.
Solving nonlinear equations and systems of nonlinear equations: Bisection method, fixed-point iteration, Newton’s method.
Runge-Kutta methods for ordinary differential equations.
Characteristic polynomial and eigenvalues.

The knowledge and skills to implement and solve algorithmic problems using the mentioned algorithms were developed using C++ due to its object-oriented programming with high performance, efficient memory management, low-level access to hardware and a rich standard library, including mathematical functions commonly used in numerical algorithms. These allow students to write efficient and customizable numerical algorithms. Objective C++ was one of the courses of the first year of studies.

3.3. The study participants

Study participants were selected from Computer Science students who were enrolled in the two mentioned compulsory courses: Introduction to Computer Science (ICS) (first semester) and Numerical Analysis Algorithms (NAA) (third semester). The first group of students began their studies in the academic year 2019/2020 in a traditional in-person course delivery format that was interrupted because of the confinement. They then continued their studies utilizing the synchronous online format. The second group consisted of students who began their studies in academic year 2020/2021 in the synchronous online format and continued these activities in a hybrid format. The third group of students began their studies in academic year 2021/2022 in a hybrid format that returned to an in-person format in the year 2022/2023. Online learning was supported by Moodle and MS Teams.

Only students enrolled in either the ICS and NAA courses participated in our research. Students who interrupted their studies and did not complete the courses were excluded. Thus, the study group included students who were enrolled in both courses and took both final exams. A total of 787 participants were selected. Table 1 summarizes the study participant groups according to education strategy.

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https://doi.org/10.1371/journal.pone.0305763.t001

Males constituted 87.5% of the total study participants, while females constituted 12.5%. Regarding nationality, the majority, i.e. 85.5%, came from Poland, while 14.5% came from other countries, mainly Ukraine.

3.4. Online exam quizzes

In this study, the Moodle platform provided by the Computer Science Department from the Lublin University of Technology was applied to conduct the final exam process. Comparative analysis of student academic performance was anchored on the results obtained in their final exams. Final exams were carried through the Moodle platform using Quiz activity . All exams comprised questions of various types, including Multiple Choice , Short Answer , Numerical and Essay as follows:

Multiple choice questions were employed for evaluating both theoretical and practical contents. For our purpose, the option Multiple answers are allowed was used. Multiple answers questions enable one or more answers to be chosen by providing check boxes next to the answers. We used a negative grade percentage for wrong answers, so that simply ticking all choices did not necessarily generate a full grade. If the sum of partial grades was negative, then the total grade for this question would be zero [ 55 ].
Short answer or numerical questions were used to evaluate theoretical and practical contents. In a short answer question, the student types in a word or phrase in response to a question. This must exactly match one of the acceptable answers. Numerical questions resembled short-answer questions. Here, the difference was that numerical answers were allowed to have an accepted error for number.
Essay questions were used to evaluate practical contents, mainly programming and coding skills. We employed essay-type questions to provide the option of answering by entering text online. The option Require the student to enter text was chosen. The Response format option was set to Plain text , monospaced font to improve the readability of code by ensuring consistent and clear alignment. This is particularly helpful for maintaining an organized layout. The essay questions had to be marked manually by the course instructor.

The number of multiple choice questions and short answer / numerical questions was comparable. One question was an essay question. Questions were created and stored separately in a Question bank and were organized into 10 categories according to the implemented curricula and learning outcomes. Each category consisted of at least 50 questions. Quiz settings were as follows:

Quizzes included 20 questions worth 20 points. There were two categories of questions: theoretical and practical.
Students were allowed to have one attempt at each quiz. The time limit option was set to 60 minutes.
Students were not allowed to open other windows or programs while taking these quizzes.
A password was required. The option Block concurrent connections was checked.
The Choose Sequential navigation method was employed to compel the student to progress through the questions in order and not return to a previous question or skip to a later one.
The timeframe when the students were able to see feedback was set to the option After the quiz is closed and the option Whether correct was checked.
Employed questions were assessed for quality and modified for re-use in the next academic year.

Students were tested using the same evaluation methods and types of questions in in-person, synchronous online and hybrid groups. The Moodle platform collected assessment data and generated report statistics. The data containing students’ exam results (points) were collected and exported from the Moodle platform as.xlsx files.

3.5. Quiz report statistics

Quiz statistics provided test statistics and quiz structure analysis. The test statistics gave information on how students performed on a quiz, and employed descriptive statistics: average grade, median grade, standard deviation of grades, skewness and kurtosis. A detailed analysis of each question was given in quiz structure analysis, and applied the following measures: facility index, discrimination index and discriminative efficiency. Discriminative efficiency is a measure similar to discrimination index [ 55 ].

Facility index.

In this work, facility index of a question was determined by the average score divided by the maximum score and represented as a percentage. A higher value indicated an easier question. The interpretation of its values is given in Table 2 [ 55 ].

https://doi.org/10.1371/journal.pone.0305763.t002

Discrimination index.

Discrimination index is the correlation between the score for this question and the score for the whole quiz represented as a percentage. If the score for the question and the score for the test are well correlated, the question can be categorized as a question with good discrimination. The maximum discrimination requires a facility index in the range 30%–70%, although this is not tantamount to high discrimination index. Discrimination index values should be interpreted according to Table 3 [ 55 ].

https://doi.org/10.1371/journal.pone.0305763.t003

A negative value of a discrimination index would mean that the best students got this question wrong more often than the worst students. A discrimination index of zero would mean it was a poor discriminator between good and bad students. Discrimination index is considered excellent when the value is higher than 40%, and considered good when it ranges from 20% to 40%.

Discriminative efficiency.

The discriminative efficiency estimates how good the discrimination index is relative to the difficulty of the question. This attempts to discriminate between students of different ability, and the higher the value, the better is the question at discriminating between students of different abilities [ 55 ]. Values between 30%–50% provide adequate discrimination, while those above 50% provide very good discrimination.

3.6. Statistical analysis

Data collected was tabulated, and analysis was carried out by applying simple percentage analysis, as well as descriptive analysis, using mean, standard deviation and inferential analysis such as t-Student tests and ANOVA [ 56 , 57 ]. We performed non-parametric alternatives such as a Mann-Whitney U test and the Kruskal-Wallis test to compare samples that cannot be assumed to be normally distributed [ 58 , 59 ]. Statistical significance was set at p<0.05. Data analysis was performed using the Statistica Package, Version 13 (TIBCO Software Inc.).

Participants’ profile

Our study included 787 Computer Science students, aged 18 to 22 years. The participant background characteristics revealed that most students were male (87.5%) and native (Polish; 85.5%). Furthermore, most of the students were enrolled in full-time studies (85.5%) ( Table 4 ).

https://doi.org/10.1371/journal.pone.0305763.t004

The percentages of the students who began their studies in the academic years 2019/2020, 2020/2021 and 2021/2022 were comparable, around 30%. An important aspect of the analysis was the availability of data from the pre-pandemic period that was relevant for our investigations.

Comparison of in-person, synchronous online and hybrid learning

The comparison of in-person, synchronous online, and hybrid teaching methods in student learning outcomes based on background characteristics is presented in Tables 5 and 6 .

https://doi.org/10.1371/journal.pone.0305763.t005

https://doi.org/10.1371/journal.pone.0305763.t006

The findings indicated that for the first semester course Introduction to Computer Science, the relation between learning outcomes and student gender was insignificant (p = 0.427). Moreover, the relation between learning outcomes and study option was also insignificant (p = 0.223). However, there was statistically significant difference between learning outcomes and residency status (p < 0.001). The findings indicated that during in-person and online studies, native students had significantly higher learning outcomes than did non-native students (p < 0.001). In addition, full-time students of online studies had significantly higher learning outcomes (p = 0.002) than did part-time students.

Regarding the learning outcomes of the students as obtained in the third semester course Numerical Analysis Algorithms, gender and study options were also insignificant (p = 0.834; p = 0.157) in relation to learning outcomes. In contrast, residency status was significant (p < 0.001). The findings indicate that native students had significantly higher learning outcomes than did non-native students (p < 0.001). Moreover, full-time students of online studies had significantly higher learning outcomes as compared to part-time students (p = 0.011).

The comparison of teaching methods in participant performance based on different semesters (courses) is presented in Table 7 .

https://doi.org/10.1371/journal.pone.0305763.t007

The differences in mean scores related to the first semester course Introduction to Computer Science, during online and hybrid studies, were significantly higher compared to in-person studies (LSD post-hoc, p < 0.001). However, mean scores related to the third semester course Numerical Analysis Algorithms, during online and hybrid studies, were significantly lower in comparison to in-person studies (LSD post-hoc, p < 0.001). Switching to traditional in-person studies in the academic year 2022/2023 did not degrade student performance.

Quiz quality assessment

Tables 8 and 9 reveal the facility index, discrimination index and discriminative efficiency values from the final exams held from 2019/2020 to 2022/2023.

https://doi.org/10.1371/journal.pone.0305763.t008

https://doi.org/10.1371/journal.pone.0305763.t009

The lowest mean facility index was 47% ± 25%, while the highest mean facility index was 59% ± 20%. Moreover, the mean discrimination index was located within the range between 31% and 37% and the mean discriminative efficiency was found within the range between 43% and 54%. The results indicate, with regard to facility index, that most of the questions were moderately difficult, yet about right for the average student, and demonstrated adequate discrimination—regardless of the course delivery format.

5. Discussion and conclusions

In our study, we compared the learning outcomes of Computer Science students who were taught through synchronous online and hybrid systems, to those who learned in the traditional in-person system, and this revealed significantly higher learning outcomes when taught through online and hybrid systems versus in-person. It is worth noting that student scores showed an increasing trend in the years 2019–2023. Despite this, the significant difference in the results of the students’ final examination was not too large–as it did not exceed 10% of the maximal score.

A comparison between the student groups demonstrates that utilizing synchronous online learning can result in more enhanced educational opportunities for students. However, our findings indicated that native students had significantly higher learning outcomes than did non-native students. The reason could be that the study courses were held in Polish, which is a difficult language for non-native students to learn and utilize.

Several research studies have shown that online learning and the combination of online and in-person learning systems have positive and powerful roles in enhancing the effectiveness of education [ 19 , 29 , 41 , 47 , 60 ]. However, along with enhanced accessibility and flexibility, pure online learning also has several disadvantages, notably, the lack of interpersonal contacts and student satisfaction. In the hybrid form, however, flexibility and accessibility are enhanced, while human connection occurs.

Our results indicated that synchronous online learning could be appreciated as a successful method of conducting Computer Science education and can be used as a tool supporting traditional in-person methods. Although this approach is a little less flexible for teachers and students, and requires reliable technology, in comparison to asynchronous learning, this allows for more real time engagement and feedback [ 61 ].

As the effective measurement of knowledge acquired is an important component of Computer Science education, the use of the Moodle quizzes activity as a continuous assessment of students was analyzed according to statistical data such as the facility index, discrimination index and discriminative efficiency. Out of the exam tests conducted from the academic year 2019/2020 to 2022/2023, the mean facility index scores ranged from 47% to 59% and the mean discrimination index ranged from 31% to 37%. The statistic results indicated that, regarding facility index, most of the questions were moderately difficult and about right for the average student regardless of the course delivery format, and that a consistent and adequate level of discrimination indices was maintained. In addition, the similar results obtained in our study no matter the year, with three different groups of students, also confirmed the validity and reliability of the designed exam tests.

Although online learning requires extensive self-discipline, it allows universities to integrate new technologies into their offer, and hence, effectively facilitate the student learning process. After the COVID-19 pandemic, there has been a quick transition back to in-person teaching, but still there are many proffered activities being in an online format. At present, many students state that they prefer to learn through hybrid learning methods. Furthermore, several studies have shown that e-learning methods are used widely by students outside of their formal curricula for continuing their professional education [ 62 ]. This indicates that students and professionals appreciate and take advantage of self-paced learning environments in which they control their learning pace, information flow, selection of learning activities, as well as their time management. Thus, the digital transformation of the educational process has become a necessity to meet shifting student demands and seems to be one of the leading factors that affect current teaching methodology.

It is worth noting that the extreme situation caused by the COVID-19 pandemic provided an opportunity to revise our approach, both to traditional and online learning, but also posed challenges for the future of education systems. In conclusion, the results of the analysis allow us to answer the questions formulated before in the following way.

The COVID-19 confinement caused online education, which previously was mainly used as an addition to traditional learning methods, to become the mainstream, in particular, in Computer Science.
The COVID-19 pandemic did not have a disruptive effect that resulted in knowledge deficiency with regard to the academic performance of Computer Science students. In contrast, this situation increased student academic motivation. Indeed, students demonstrated higher exam scores during subsequent two academic years.
Despite the change from in-person to online learning, the reliability of student assessment remained at similar levels.

6. Limitations and future works

Our context is algorithms and programming in the first two years of the engineering studies program. While we believe that the long period under study is an advantage of this work, its limitation is the fact that it focuses only on the students of Computer Science. We based our research on the data comprising the performance of students in only two courses. Moreover, only the exam scores from the 1 st and 3 rd semesters were included in the study. The courses of other semesters were not assessed because they did not meet the required assumptions regarding the course selection. Another limitation of our study was that students could share information about the content of the exam. However, we randomly assigned students to subcategory sets to avoid sharing information. In the future it is worth considering extending the analysis to students of other fields, as well as take into account student performance in more courses.

Acknowledgments

The authors thank Mr Jack Dunster for linguistic improvement of the text.

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Research: What Happens When Influencers Turn Off Comments

Michelle Daniels

Seven studies examined the effects on their personal brands and product endorsements.

Influencers are often targets of online negativity, and how they respond to this feedback can have important ramifications for their personal brands and the effectiveness of their product endorsements. Recent research shows that one commonly employed tactic — turning off social media comments — can undermine influencers’ key assets: their persuasiveness, likability, and perceived sincerity.

Public figures, from Oprah to Selena Gomez , have restricted access to their social media comments in response to online criticism, whether on a temporary or permanent basis. This decision seems rational; those in the public eye are often highly scrutinized, and disabling comments can be a first line of defense to protect their mental health.

Freeman Wu is an assistant professor of marketing at Vanderbilt University. His research focuses on digital marketing, aesthetics and design, and social influence in consumption contexts.
Michelle Daniels is an assistant professor of marketing at the University of Alabama. Her research focuses on social perception in digital spaces, with an emphasis on the intersection of consumption and well-being.

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The State of Travel: Hotels and Online Travel

Rashaad Jorden , Skift

August 23rd, 2024 at 10:39 AM EDT

The pandemic may be in the rearview mirror for hotels and online travel agencies, but the challenges for those sectors are far from over — especially with the threat of a recession still looming.

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Editor-in-Chief Sarah Kopit and Head of Research Seth Borko talk travel every week.

The Skift Research team recently unveiled its State of Travel 2024 report , a 400-page that documents the consumer and business trends in various sectors of the travel industry — including hotels and online travel agencies.

Editor-in-Chief Sarah Kopit and Head of Research Seth Borko discussed these trends with Senior Research Analyst Pranavi Agarwal and Senior Hospitality Editor Sean O’Neill in this episode of the Skift Travel Podcast.

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Post-Pandemic Dynamics: 2024 marks a significant shift as the first non-pandemic year, making it challenging to compare current trends with 2019. The industry is navigating new opportunities and challenges, such as staying relevant amidst increased competition and changing consumer behaviors.

Challenges for Hotels and OTAs: The major challenges for hotels and online travel agencies (OTAs) include maintaining market share and staying relevant in a market with more competition and price sensitivity among consumers. Legacy players must evolve their business models to keep up.

Impact of Potential Recession: A potential recession could lead to a softening in travel demand, particularly in leisure travel. However, luxury travel might remain resilient, while midscale hotels could benefit from travelers trading down from more expensive options.

Gen Z’s Influence on Travel: Gen Z is seen as a key demographic, with a strong interest in experiential travel and a preference for experiences over material goods. This group is likely to continue traveling even in uncertain economic times, though they may prioritize value and unique experiences.

Role of Credit Card Platforms: Travel loyalty credit card platforms, such as those from Capital One, Chase, and American Express, are becoming increasingly influential in the travel industry. These platforms are reshaping the competitive landscape, challenging traditional hotel loyalty programs, and becoming significant players in the travel sector.

Episode Summary

In 2024, the travel and hotel industries are experiencing a significant transformation as they navigate the first fully post-pandemic year. The industry’s landscape has shifted, making comparisons to 2019 difficult due to evolving consumer behaviors and heightened competition. Hotels and online travel agencies (OTAs) face the challenge of maintaining their market share and relevance in a market where competition is fierce, and consumers are more price-sensitive. To stay competitive, legacy players must adapt and evolve their business models to meet the changing demands of travelers.

The potential for an economic recession poses additional challenges, particularly for leisure travel, which could see a decline in demand. However, luxury travel might prove resilient as affluent travelers continue to spend on high-end experiences. Conversely, midscale hotels may see a boost as travelers opt for more affordable options, trading down from luxury accommodations.

Gen Z is emerging as a critical demographic in the travel industry, with a strong preference for experiential travel over material possessions. This generation is expected to continue traveling even during economic uncertainty, but they will prioritize value and seek out unique, authentic experiences. Their influence is reshaping travel trends, as they favor experiences that offer more than just traditional sightseeing.

Additionally, travel loyalty credit card platforms like those offered by Capital One, Chase, and American Express are becoming increasingly powerful players in the industry. These platforms are not only challenging traditional hotel loyalty programs but are also redefining the competitive landscape. As a result, they are becoming significant drivers in the travel sector, offering travelers new ways to earn and redeem rewards, further influencing consumer choices and loyalty.

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Elsevier - PMC COVID-19 Collection

Effects of COVID-19 on business and research

The COVID-19 outbreak is a sharp reminder that pandemics, like other rarely occurring catastrophes, have happened in the past and will continue to happen in the future. Even if we cannot prevent dangerous viruses from emerging, we should prepare to dampen their effects on society. The current outbreak has had severe economic consequences across the globe, and it does not look like any country will be unaffected. This not only has consequences for the economy; all of society is affected, which has led to dramatic changes in how businesses act and consumers behave. This special issue is a global effort to address some of the pandemic-related issues affecting society. In total, there are 13 papers that cover different industry sectors (e.g., tourism, retail, higher education), changes in consumer behavior and businesses, ethical issues, and aspects related to employees and leadership.

1. Introduction

There has been a long history of fear of pandemic outbreaks. The discussion has not focused on whether there will be an outbreak, but when new outbreaks will happen ( Stöhr & Esveld, 2004 ). The events leading to influenza pandemics are recurring biological phenomena and cannot realistically be prevented. Pandemics seem to occur at 10–50-year intervals as a result of the emergence of new virus subtypes from virus re-assortment ( Potter, 2001 ). As the global population increases and we need to live closer to animals, it is likely that the transfer of new viruses to the human population will occur even more frequently. All our society can do is take preventive measures so that we are able to act quickly once we suspect an outbreak. We should also make an effort to learn from the consequences of pandemic outbreaks to prepare our societies for if—and, more likely, when—this happens again.

As we are in the middle of a pandemic outbreak, it is very difficult to estimate its long-term effects. Although society has been hit by several pandemics in the past, it is difficult to estimate the long-term economic, behavioral, or societal consequences as these aspects have not been studied to a great extent in the past. The limited studies that do exist indicate that the major historical pandemics of the last millennium have typically been associated with subsequent low returns on assets ( Jorda, Singh, & Taylor, 2020 ). For a period after a pandemic, we tend to become less interested in investing and more interested in saving our capital, resulting in reduced economic growth. Given the current situation, in which saving capital means negative returns, it is not at all certain that we will be as conservative as we have been in the past. Behavioral changes related to pandemic outbreaks seem to be connected with personal protection ( Funk, Gilad, Watkins, & Jansen, 2009 ), such as the use of face masks, rather than general behavior changes. Our lives, as humans in a modern society, seem to be more centered around convenience than around worrying about what might happen in the future.

On a societal level, we seem to be completely unprepared for large-scale of outbreaks. Our societies are more open than ever; we rely on the importing of important products, such as food, energy, and medical equipment, rather than sourcing them from close to where they are needed; and there are limited efforts to prepare for pandemic outbreaks. The guiding principle of our society seems to be efficiency and economic gain rather than safety. This may change after the current outbreak. It is also important to point out that the principles (eg. openness and global trade) on which society is based have lifted a large number of countries around the globe out of poverty and produced well-developed economies. It is not unlikely that our societies will back-off some of them leading to more poverty in the world.

The COVID-19 pandemic outbreak has forced many businesses to close, leading to an unprecedented disruption of commerce in most industry sectors. Retailers and brands face many short-term challenges, such as those related to health and safety, the supply chain, the workforce, cash flow, consumer demand, sales, and marketing. However, successfully navigating these challenges will not guarantee a promising future, or any future at all. This is because once we get through this pandemic, we will emerge in a very different world compared to the one before the outbreak. Many markets, especially in the fields of tourism and hospitality, no longer exist. All organizational functions are intended to prioritize and optimize spending or postpone tasks that will not bring value in the current environment. Companies, especially start-ups, have implemented an indefinite hiring freeze. At the same time, online communication, online entertainment, and online shopping are seeing unprecedented growth.

2. Interesting research themes

As research indicates that pandemics are reoccurring events, it is very likely that we will see another outbreak in our lifetime. It is apparent to anyone that the current pandemic has had enormous—but hopefully short-term—effects on all our lives. Countries have closed their borders, limited the movement of their citizens, and even confined citizens in quarantine within their homes for weeks. This is a rather unique occurrence, as we are used to freedom of movement, but in the midst of the pandemic outbreak, people have been fined just for being outside. Although our societies seem to be very accepting of these limitations and condemn people that do not follow the rules, but we need to ask ourselves how this will affect the views of our society (e.g., views regarding freedom, healthcare, government intervention). We should also be aware that infrastructure and routines to monitor citizens in order to limit the spread of the virus have been rolled out, and so we should ask ourselves how accepting we will be of monitoring in the future. We must realize that once these systems are in place, it is highly unlikely that they will be rolled back. Furthermore, in some countries, the ruling politicians have taken advantage of this situation and increased their control over the state, suppressing opposing opinions and thus jeopardizing democratic systems. Some of the worst examples are Turkmenistan, which has banned the use of the word “corona,” and Hungary, which is letting Viktor Orbán rule by decree indefinitely.

As previously mentioned, people have been confined to their homes. There has also been a constant stream of news on this invisible external threat from which we cannot protect ourselves. We have been occupied trying to figure out how best to protect ourselves and our loved ones. On top of that, many feel pressure due to losing their jobs or due to working in close proximity to potentially infected people, as society depends on them fulfilling their duty. The consequences of the pandemic outbreak have hit various sectors of society in different ways. People that are working in sectors connected to healthcare must endure endless tasks and very long working days. Additionally, people are losing their jobs at rates we have not seen since the Great Depression of the 1930s. The sectors that have seen the largest increases in unemployment are those that are hedonic in nature and require the physical presence of the customer (e.g., hospitality, tourism, and entertainment), as demand for these services has ceased to exist. The employees in these sectors tend to be younger and female. Past experience also indicates that once someone is outside the job market, it is very difficult to get back in as they will face more competition that may be more competent.

All countries that can are trying to stimulate their economies to keep as much as possible of their necessary infrastructure intact and to keep citizens productive or ready to become productive once the pandemic has been overcome. In order to keep society from deteriorating, people not only need jobs or a way to support themselves but also need access to what they view as necessary products and services. If this infrastructure does not exist, people start to behave in what is considered uncivil behavior (e.g., hording or looting). Countries around the globe have adopted very different approaches to handle the current stress on the job markets and infrastructure. Some countries have chosen to support businesses in order to help them keep the workforce intact, but others with less financial strength cannot do the same. Countries also have directly supported their citizens in various ways. There is an enormous body of rich information that researchers can collect to determine the best approaches for when when and if a major disaster happens in the future.

3. Consumer behavior during COVID-19

Around the globe, societies are in lockdown, and citizens are asked to respect social distance and stay at home. As we are social beings, isolation may be harmful for us ( Cacioppo & Hawkley, 2009 ). Feelings of loneliness have, among other things, been connected to poorer cognitive performance, negativity, depression, and sensitivity to social threats. There are indications that this is happening during the current pandemic, as there has been an increase in domestic violence, quarrels among neighbors, and an increase in the sales of firearms ( Campbell, 2020 ). However, we have also seen an increase in other, more positive types of behavior caused by social distancing that have not been researched. People have started to nest, develop new skills, and take better care of where they live. For instance, they may learn how to bake, try to get fit, do a puzzle, or read more. There has also been an increase in purchases of cleaning products, and more trash is being recycled. At the same time, we are eating more junk food and cleaning ourselves less. People are also stockpiling essentials, panic buying, and escaping to rural areas. This is an indication that what is happening to us and our behaviors is complex, and it would be interesting to study this phenomenon further.

Another consequence of the lockdowns is the extreme increase in the usage of Internet and social media. Previous research has indicated that humans who feel lonely tend to use social media more and, in some cases, even prefer social media over physical interaction ( Nowland, Necka, & Cacioppo, 2018 ). Social media also may bring out the worst in us through trolling or sharing of fake news. This is, to some degree, not as damaging as the “real life” is lived in the physical world and the Internet is an “add on” with, in most cases, limited impact on the physical world. By this, we are able to compartmentalize and distinguish what matters and what does not matter. However, the current situation has made social media the main mode of contacting or socializing with others. In many cases, the Internet is at present also the main way to get essential supplies and receive essential services, like seeing a doctor. The question, then, is what happens to us when the “real life” is lived online and becomes a way to escape the physical world?

As humans, we rely to a large degree on our senses; we are built to use them in all situations of life. Thus, we rely on them heavily when making decisions. However, the current isolation is depriving us of our senses, as we are not exposed to as many stimuli as normal situation. Thus, we are, in a sense, being deprived of stimulation. We are also being told by authorities not to use our senses; we should not touch anything, wear a mask, or get close to other humans. Thus, what happens once our societies open up? How long will this fear of using our senses linger, and will we be over-cautious for a while or may we try to compensate as we have to some degree been deprived of using them? These are just some aspects of consumer behavior; many more are covered by this special issue.

4. Markets during COVID-19

The COVID-19 outbreak is likely to cause bankruptcy for many well-known brands in many industries as consumers stay at home and economies are shut down ( Tucker, 2020 ). In the US, famous companies such as Sears, JCPenney, Neiman Marcus, Hertz, and J. Crew are under enormous financial pressure. The travel industry is deeply affected; 80% of hotel rooms are empty ( Asmelash & Cooper, 2020 ), airlines cut their workforce by 90%, and tourism destinations are likely to see no profits in 2020. Furthermore, expos, conferences, sporting events, and other large gatherings as well as cultural establishments such as galleries and museums have been abruptly called off. Consulting in general and personal services, like hairdressers, gyms, and taxis, have also come to a standstill due to lockdowns. Finally, important industries like the car, truck, and electronics industries have abruptly closed (although they started to open up two months after their closure). There are an endless number of questions we could ask ourselves in connection to this rather abrupt close-down. For instance, how do we take care of employees in such situations? Why are companies not better prepared to handle such situations (e.g., putting aside earnings or thinking of alternative sources of income)? How are the companies and even countries using the current situation to enhance their competitive situation? One of the countries that seem to be using the situation is China that is buying European based infrastructure and technology ( Rapoza, 2020 ).

While some businesses are struggling, some businesses are thriving. This is true for a number of Internet-based businesses, such as those related to online entertainment, food delivery, online shopping, online education, and solutions for remote work. People have also changed their consumption patterns, increasing the demand for takeout, snacks, and alcohol as well as cleaning products as we spend more time in our homes. Other industries that are doing well are those related to healthcare and medication as well as herbs and vitamins. Typically, when studying markets, it is assumed that they are static, a natural conclusion since they tend to change slowly. However, if there is one thing the COVID-19 outbreak has shown us, it is that markets are dynamic ( Jaworski, Kohli, & Sahay, 2000 ) and can move rapidly. Furthermore, a market is not just a firm; it is a network of actors (i.e., firms, customers, public organizations) acting in accordance with a set of norms. These systems are sometimes referred to as dynamic ecosystems that exist to generate value ( Vargo & Lusch, 2011 ). The COVID-19 outbreak poses a unique opportunity to study how markets are created and how they disappear within a very limited time span. It would also be interesting to explore whether the disappearance of one solution for a market may be replaced by another (e.g., combustion engines for electric or physical teaching for online teaching).

5. Predicted lasting effects

Based on past experiences, we have become more conservative and protective after a pandemic outbreak. We save resources in order to be prepared if the unthinkable happens again. Countries are starting to stockpile things like food, equipment, and medicine or prepare to produce them locally. It is also essential for larger global firms to have reliable supply chains that do not break. Consequently, it is very likely that this pandemic will make these firms rethink their supply chains and, probably, move supply chains closer to where they are needed in order to avoid stopping production in the future. Furthermore, authorities have implied that other humans from other countries are dangerous as they may carry the virus. A closed border implies that the threat is from the outside. In addition, international flights are not likely to be an option for many in the coming years. Together, these circumstances mean that countries may become more nationalistic and less globalized. This may be a dangerous development, as long-term protection from the consequences of a pandemic outbreak is likely to require global effort and sharing of resources. Such cooperation is also key to tackle other global challenges that we may face in the future.

6. This special issue

In this special issue, we have invited scholars from different areas of business and management to write brief papers on various aspects of the effects of the COVID-19 pandemic. In total, there are 12 articles in the special issue, which are summarized below.

The first contribution, by Jagdish Sheth, is titled “Impact of COVID-19 on Consumer Behavior: Will the Old Habits Return or Die?” It explores how the current pandemic has affected several aspects of consumers’ lives, ranging from personal mobility to retail shopping, attendance at major life events like marriage ceremonies, having children, and relocation. The author investigates four contexts of construed consumer behavior, namely social context, technology, coworking spaces, and natural disasters. Additionally, the author foresees eight immediate effects of the pandemic on consumer behavior and consumption. Hoarding—the mad scramble observed at the start of the COVID-19 outbreak—applies not only to consumers but also to unauthorized middlemen who buy products in excess to sell at increased prices.

Consumers learn to adapt quickly and take an improvised approach to overcome constraints that have been imposed by governments. Pent-up demand may lead to a significant rebound in sales of durable products, like automobiles, houses, and large appliances, and some of the realities of COVID-19 will put consumers in a buying mood soon.

Embracement of digital technology, either through online services or information-sharing platforms like Zoom, has kept people connected around the world. Digital savviness will become a necessity, rather than an alternative, for schools, businesses, and healthcare providers. With the onset of lockdowns in many countries, online shopping, including grocery shopping, has become more prevalent.

The desire to do everything in-home has impacted consumers’ impulse buying habits. Slowly but surely, work–life boundaries will be blurred when both tasks are carried out from home. There should be efforts to compartmentalize the two tasks to make this a more efficient way of life.

Reunions with friends and family are now restricted to digital interactions, especially for people who work and live away from their families. We can expect a dramatic change in consumers’ behavior because of sophisticated technology. In addition, consumers may discover new talents as they spend less time on the road and more at home. They may experiment with cooking, learn new skills, and, soon, become producers with commercial possibilities. In the end, most consumer’s habits will return to normal, while some habits may die due to adaptation to the new norm.

The second contribution, “Interventions as Experiments: Connecting the Dots in Forecasting and Overcoming Pandemics, Global Warming, Corruption, Civil Rights Violations, Misogyny, Income Inequality, and Guns,” written by Arch G. Woodside, discusses whether there is an association between public health interventions, national and state/provincial governments interventions, and improved control of the COVID-19 outbreak in certain countries. The paper suggests “ultimate broadening of the concept of marketing” in order to design and implement interventions in public laws and policy, national and local regulations, and the everyday lives of individuals. It also lays out effective mitigating strategies by examining designs, implementations, and outcomes of COVID-19 interventions by examining deaths as a natural experiment.

While COVID-19 eradication intervention tests are being run for promising vaccines, these are considered true experiments, and analyzing the data from these interventions may involve examination of the success of each vaccine for different demographic subgroups in treatment and placebo groups in randomized control trials. Comparing the designs and impact of the current COVID-19 mitigation interventions across nations and states within the U.S. provides useful information for improving these interventions, even though they are not “true experiments.”

The third contribution, “Employee Adjustment and Well-Being in the Era of COVID-19: Implications for Human Resource Management” is written by Joel B. Carnevale and Isabella Hatak. They claim that COVID-19 is becoming the accelerator for one of the most drastic workplace transformations in recent years. How we work, socialize, shop, learn, communicate, and, of course, where we work will be changed forever. Person–environment (P-E) fit theories highlight that employee–environment value congruence is important because values influence outcomes through motivation. However, given the current environment, in which the fulfillment of needs and desires like greater satisfaction, higher engagement, and overall well-being is drastically altered, there is an increased likelihood of misfits working in organizations.

In response to this, organizations need to use virtual forms of recruitment, training, and socialization in lieu of face-to-face interactions. Increasing job autonomy will alleviate the family-related challenges that may arise within remote work environments by providing employees with the right resources to manage conflicting work and family demands. Human resource leaders within the organization must enhance relationship-oriented human resources systems in order to combat the risk of unforeseen and prolonged isolation among single, independent employees and to better prepare them for situations like the current crisis. The field of entrepreneurship can offer insights that can be adapted by organizations coping with the pandemic. Entrepreneurs’ struggles are largely caused by the lack of work-related social support in comparison to salaried employees. Nevertheless, some entrepreneurs are known to overcome these limitations by leveraging alternative, domain-specific sources of social support, such as positive feedback from customers, which ultimately enhances their well-being. Recycling such approaches to identify overlooked or untapped sources of social support is likely to be beneficial for employees given the current work environment dynamic.

The fourth contribution, written by Hongwei He and Lloyd C. Harris, is titled “The Impact of Covid-19 Pandemic on Corporate Social Responsibility and Marketing Philosophy.” The worldwide demand for hand sanitizers, gloves, and other hygiene products has risen because of the COVID-19 pandemic. And, in some countries, there has been a surge in complaints about profiteering and opportunism. As doctors combat the virus, prosecutors are pursuing the opportunistic profiteers who prey on the fearful. Many large corporations have a social purpose and set of values that indicate how much they appreciate their customers, employees, and stakeholders. This is the time for these corporations to make good on that commitment. Some organizations strive to set great examples. For example, Jack Ma, the co-founder of Alibaba, donated coronavirus test kits and other medical supplies to many countries around the world through the Jack Ma Foundation and Alibaba Foundation. Large corporations have often written off the costs of product failures, restructuring, or acquisitions. When writing off losses due to the coronavirus pandemic, it is understandable to pursue the bond established between the brand and consumer. This gesture can turn out to be more meaningful and lasting than when implemented during “normal” times.

On the bright side, the COVID-19 pandemic offers great opportunities for companies to actively engage with their corporate social responsibility (CSR) strategies and agenda. The post-COVID-19 marketplace is going to be irrecoverably different. Organizations will need to re-evaluate their visions, missions, and objectives to account for changes to their customers and competitors, amongst other shifts. A key facet of this is the exponential increase in digital communications and change.

Professors T. Y. Leung, Piyush Sharma, Pattarin Adithipyangkul, and Peter Hosie wrote “Gender Diversity and Public Health Outcomes: The COVID-19 Experience.” Public health is an interdisciplinary subject that involves the social sciences, public policy, public education, economics, and management. Failure to implement a proper public health policy may not only lead to a huge loss of human lives but also shatter the economy; expose the incompetence of public bodies, including governments and political leaders; and weaken the confidence of the general public. We are used to hearing that women are more other-directed and emotionally intelligent, but it has been proven that women are just as good, if not better, in terms of what we think of as male qualities, like being decisive and making tough calls, during a crisis. Prevalent issues like under-representation of women in leadership positions, mismanagement of public health systems, and inaccurate or inconsistent reporting of public health outcomes in the context of the recent pandemic need to be addressed by involving women at all stages of public health management, including planning, decision-making, and emergency response systems. This is important not only for a quick economic recovery in the aftermath of the COVID-19 crisis but also to prevent and manage such disasters in future.

The sixth paper in the special issue, “Managing Uncertainty during a Global Pandemic: An International Business Perspective,” was written by Piyush Sharma, T. Y. Leung, Russel P. J. Kingshott, Nebojsa S. Davcik, and Silvio Cardinali. Pandemics like that caused by COVID-19 are not just passing tragedies of sickness and death. The ubiquity of such a threat, and the uncertainty and fear that accompany it, lead to new consumer trends and norms. People become both more suspicious and less susceptible. The crisis also shines a light on the importance of international business research, which has been overlooked in the years leading up to this crisis. Social and informational uncertainty are likely to have economic repercussions.

As pointed out by the author, successful outcomes of social distancing and other restrictions are highly dependent upon societal acceptance and following through with restrictions. Social uncertainty and unrest among consumers due to being under lockdown for months could lead to a huge stifled demand for the products they missed. In this context, Samsung, a South Korean giant in consumer electronics and home appliances, may be a great case study during the ongoing COVID-19 crisis. Samsung established a huge manufacturing network over the years, with factories in multiple locations. This was done due to foresight of the risk of single sourcing, the need to fulfill large production demand, and the desire to reduce its dependence on China. This strategy has helped Samsung shift its production from one location to another during the ongoing COVID-19 crisis, thereby facing just a slowdown and not a complete shutdown of production. Similarly, to compensate for the closure of retail stores, Samsung has leveraged its contracts with mobile phone retailers and Benow (a payment and EMI technology firm) to create an e-commerce platform so that its retail business can continue to sell and deliver products directly to customers.

The seventh contribution, “Competing During a Pandemic? Retailers Ups and Downs During the COVID-19 Outbreak,” was written by Eleonora Pantano, Gabriele Pizzi, Daniele Scarpi, and Charles Dennis. The authors note that retailers who were not quick to adapt and factor COVID-19 into their operations are currently facing an existential crisis. The authors also highlight that retailers can minimize current and future business impacts by addressing four major emergencies.

First, retailers can identify and execute controllable activities. They must identify, optimize, and re-access existing technologies and business models. Specifically, they must understand how their stakeholders operate and interact to reduce response time and optimize communication channels. Second, all retailers, but especially grocery stores, are revisiting their business continuity plans to reassure customers that their needs will be met and manage the inevitable supply chain constraints and highs and lows caused by volatile demand. These retailers are prioritizing critical business activities and creating contingency plans for disruption. Third, retailers need to have an understanding of their financial needs as well as the essential role they play in their communities. For some regular customers, an open and well-stocked supermarket will reassure them that they are being cared for. Fourth, messages that retailers spread online during emergencies need to include information about products’ availability on the shelves and at digital outlets; control panic buying by restricting the quantity that customers can purchase; devise and implement protection plans for consumers and employees; contribute to overall public health; and use surveillance measures to limit the spread of the virus. To these ends, retailers need to improve their customer relationship management systems and promote safe interactions with customers (e.g., through online chats with employees) to provide real-time customer assistance.

In Fabian Eggers’ contribution, “Masters of Disasters? Challenges and Opportunities for SMEs in Times of Crisis,” he identifies small- to medium-sized businesses with low or unstable cashflow as particularly vulnerable during crises, as they are currently struggling for profitability. Studies reveal the interconnectedness between finance and strategy, particularly entrepreneurial orientation and market orientation in strategies. The paper highlights that a combination of entrepreneurial orientation and market orientation can lead to lean and flexible marketing efforts, which are particularly valuable in times of crisis. In addition, entrepreneurial orientation and market orientation can be combined into an entrepreneurial marketing post-disaster business recovery framework that highlights that seeking opportunities, organizing resources, creating customer value, and accepting risk are markedly different in a post-disaster context.

Sandeep Krishnamurthy contributed with “The Future of Business Education: A Commentary in the Shadow of the Covid-19 Pandemic.” The paper highlights that social distancing is prompting educational institutions to rethink how they are connecting with their student bodies. Spatial interaction is becoming the new norm, and the blurring of physical and virtual communication is likely to continue until the pandemic is overcome. Globally, the higher education system will undergo a decade of radical technology-led transformation, according to the author. The author identified five trends that will revolutionize how we educate after COVID-19:

1. The Algorithm as Professor – Rather than taking a traditional route and learning from a human professor in classrooms, students will learn remotely from an algorithm. The AI-enabled algorithm will provide customized personal learning experiences. Students will be able to quickly master rudimentary and routinized tasks. Then, the algorithm will prepare them for an in-person experience, where a “warm body” will engage them in Socratic dialogue.
2. The University as a Service – Traditionally, we have followed a linear formulation of society. Students go through K-12 education, some get an undergraduate degree, and some go on to further studies. However, the current and future environment is too volatile to sustain this educational structure. Students will need to learn what they need when they need it. Personalized, continuing education will become the norm.
3. The University as Assessment Powerhouse – In a world characterized by AI and automation, learning can come from many sources. Students will learn from each other, algorithmic systems, and public information. However, universities will continue to have a powerful place as assessors of learning. Students will come to universities to gain objective credentials based on powerful assessments of learning.
4. Learning Personalization to Support Diversity – Students of the future will have access to multiple pathways to learn the same content. For example, a course may be available through algorithmic engagement, animation/video/augmented reality, face-to-face instruction, or any mixture thereof. Using assessment data, the university of the future will be able to pinpoint the learning needs of each student and provide a personalized experience.
5. Problem Solving Through Ethical Inquiry - As the influence of artificial intelligence and automation grow exponentially in our lives, there will be a great need for students to become problem solvers through ethical inquiry. Clearly, the future will not simply be about what the answers are; it will be about which problems we wish to solve, given what we know. Students will need to become more comfortable with the need to evaluate AI algorithms based on their efficacy and their ethical foundation.

Contribution number ten, “Consumer Reacting, Coping and Adapting Behaviors in the COVID-19 Pandemic,” is written by Colleen P. Kirk and Laura S. Rifkin. In it, the authors explore numerous consumer insights during a major pandemic outbreak. Mainly, they examine consumer behaviors across three phases: reacting (e.g., hoarding and rejecting), coping (e.g., maintaining social connectedness, do-it-yourself behaviors, and changing views of brands), and longer-term adapting (e.g., potentially transformative changes in consumption and individual and social identity). The authors also identify a number of negative aspects of the pandemic that will likely impact consumer behavior. As they state, given the mandatory close quarters people must keep due to stay-at-home requirements, domestic abuse may be on the rise. In addition, throughout history, pandemics provide an excuse for increased racial and anti-immigrant biases.

In “How Firms in China Innovate in COVID-19 Crisis? An Exploratory Study of Marketing Innovation Strategies,” written by Yonggui Wang, Aoran Hong, Xia Li, and Jia Gao, the authors explore how firms in China worked to make their marketing strategies a success. They do so by identifying the typology of firms’ marketing innovations based on two dimensions: the motivation for innovations and the level of collaboration in innovations.

The authors outline four innovative strategies to combat crises for businesses. The responsive strategy works predominantly for firms that involve physical contact, but it can easily be transferred from offline marketing channels to online channels. A collective strategy can be implemented by firms that are highly affected by the crisis, which need to develop new business by collaborating with other firms during the crisis. A proactive strategy is for firms that are less affected by the COVID-19 crisis (mostly online businesses) to develop new businesses to meet the special demands of existing customers during the COVID-19 crisis. Firms that are less affected during the COVID-19 crisis can take an alternative approach: a partnership strategy. Firms should usually develop new offerings through collaboration with other firms.

Professors Amalesh Sharma, Anirban Adhikary, and Sourav Bikash Borah contributed with “Covid-19 Impact on Supply Chain Decisions: Strategic Insights for NASDAQ 100 Firms using Twitter Data.” During black swan events like the COVID-19 pandemic, which may have severe long-term consequences, a deep understanding of business risks can help organizations establish the right plan. In this article, the authors identified supply chain challenges faced by companies using their Twitter data. To develop insights from the findings, the authors constructed unigrams, bigrams, and trigrams that revealed the supply-chain-related aspects that gain attention on Twitter.

A topic analysis was performed to identify keywords used in discussions about COVID-19. The obtained insights show that the greatest challenge for the organizations was accessing realistic customer demands. A pandemic may increase or decrease demand for specific products, making estimation of realistic final customer demand more difficult and more urgent to address. Some user accounts suggested that organizations are still lacking in terms of technological readiness and that companies are looking to gain visibility across value chains. There are growing discussions about building supply chain resilience by identifying risks. Many organizations are not only focusing on social sustainability but also turning their attention toward environmental sustainability. To deal with the challenges brought on by unprecedented times, the leaders of organizations must reimagine and redesign the supply chain; rely on technology such as artificial intelligence, the Internet of Things, and blockchain in their supply chain designs; and focus on sustainable supply chain.

Finally, Marianna Sigala wrote “Tourism and COVID-19: Impacts and Implications for Advancing and Resetting Industry and Research.” Tourism is experiencing a rapid and steep drop in demand during the COVID-19 pandemic. Despite the tourism industry’s proven resilience in other unprecedented times, the impact of the current pandemic will likely last longer for international tourism than for other affected industries. However, the tourism industry should not only recover but also reimagine and reform the next normal economic order. Currently, there is a lack of research on how crises can alter the industry, how the industry adapts to changes with innovative techniques, and how research that can establish the next norms can be conducted. To study the needs and gaps in research work, the author reviews past and emerging literature to capture its impacts and impart some ideas from different research fields that will allow tourism to grow and evolve.

Biographies

Naveen Donthu is a Distinguished University Professor at Georgia State University. He holds the title of Vanchel Pennebaker Eminent Scholar Chair and is the Kenneth Bernhardt Distinguished Department Chair of the Marketing Department. His research has appeared in journals such as Marketing Science , Management Science , Journal of Marketing , Journal of Marketing Research , and Journal of Consumer Research. He is the current editor-in-chief for the Journal of Business Research .

Anders Gustafsson is a Professor of Marketing at the Norwegian Business School. Dr Gustafsson is also a Distinguished Professorial Fellow at the University of Manchester’s Alliance Manchester Business School, and he is part of Center for Services Leadership Global Faculty at the W. P. Carey School of Business, Arizona State University. Dr. Gustafsson has published articles in journals such as the Journal of Marketing , Journal of Marketing Research , Journal of Consumer Research , Journal of Service Research , and Journal of Product Innovation Management . He is the current editor-in-chief for the Journal of Business Research and an area editor for the Journal of Service Research . Recently, he received the Christopher Lovelock Career Contributions to the Services Discipline Award. He is the current president of AMA’s Academic Council (2019/2020).

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Struggling BurgerFi hires a chief restructuring officer

Red Robin's comeback spoiled by traffic troubles

Could these be the next restaurant chains to file for bankruptcy?

Inflation-weary consumers are trading down, up and over to cava, a struggling franchisee closes 25 kfc restaurants in the midwest.

The post-pandemic fast-food business: More beverages, snacks and chicken, less pizza and sandwiches

Sandwiches and pizza are out. Smoothies and chicken tenders are in.

That’s at least based on a look at limited-service restaurant sales over the past five years, using data from the Technomic Top 500 Chain Restaurant Report.

Over the past five years, for instance, fast-casual chicken sales have grown nearly 87%, thanks largely to the strength of brands like Raising Cane’s and Dave’s Hot Chicken.

On the other end of the spectrum: Quick-service sandwiches, where sales have grown just 6% over that period.

Overall, limited-service restaurants on the Top 500 have grown total sales by 33% over the past five years. But the data shows that consumers have shifted their spending away from some legacy concepts toward newer, hotter brands in different sectors. Or they shifted spending away from full meals to snacks and drinks.

Here’s a look at the sectors and their growth over the past five years:

We probably don’t appreciate Tropical Smoothie Café nearly enough . The smoothie chain has more than doubled in size over the past five years, ultimately justifying its sale to Blackstone earlier this year for $2 billion —a rare, for this year anyway, sale of a restaurant chain at a premium valuation.

The chain has led growth in the “other beverage and snack” category of the quick-service sector.

Cookie chains have surged, led by the ultra-fast growing Crumbl, which has grown by more than 1,800% over the past five years. But there are other, more under-the-radar concepts like Nothing Bundt Cakes, which has grown consistently for years and is 72% bigger than it was in 2019.

And consumers are also buying a wider array of beverages from a growing group of restaurant chains seeking to provide them. For instance, the sector includes some of 2023’s fastest-growing chains such as HTeaO (54%), Swig (39%) and Gong Cha (29%).

Breaking: The chicken business is thriving . Consumers clearly love chicken right now and they really love chicken in limited-service formats.

The fast-casual chicken sector includes some highly successful and fast-growing concepts. Average growth last year alone was 17%, for instance, thanks to chains like Dave’s Hot Chicken, which doubled in size and has grown by a ridiculous 6,800% over the past five years.

But it also includes both Raising Cane’s and Wingstop, two of the best performing large chains in the U.S.

Yet quick-service chicken concepts aren’t to be forgotten, either, even if bone-in chicken chains like KFC and Church’s have struggled. Sales at those chains are up 53% over the past five years, led by Chick-fil-A, up 78%.

On the other hand, sandwiches . The quick-service sandwich sector remains fully dominated by Subway. The Miami-based giant has 20,000 units and accounts for two-thirds of sales in that sector. Its sales last year were down 2% compared with five years ago.

The remaining competitors just aren’t big enough to make up for the loss of more than $200 million in sales.

That, indeed, is one of the challenges of analyzing sectors: Some of them are entirely too dependent on the large chains at the top.

Fast-casual sandwich chains have performed better, thanks to Jersey Mike’s (up 150% the last five years) and chains such as Paris Baguette (up 129%). But the sector’s growth, 26%, was still under average for limited-service restaurants, where sales are up 33% over the past five years.

Where did all the pizza sales go? If there’s one surprise from this data it’s the 18% growth by the quick-service pizza sector.

You know that group, the ones that basically printed money in 2020 and 2021 when everybody was stuck at home ordering pizza delivery?

But that sector’s growth has been overstated. Most of it during those two years took place among four chains: Domino’s, Little Caesars, Papa Johns and Marco’s. If we add another of the five biggest pizza chains, Pizza Hut—which shed units and saw sales fall 1% between 2019 and 2021—average growth was 21% in that period.

The rest of the QSR pizza sector grew just 2% between 2019 and 2021.

For the most part, pizza chains simply lost steam coming out of the pandemic. Average sales growth in the sector was just 3% last year.

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Pumpkin spice season, new york's month-long 'restaurant week' and summer menu pricing, kaiseki menus, detroit-style pizza and a west african chef's pop-up, thousand-hole pancakes, alex stupak's state of mind, family dining and fries, elote corn ribs, revisiting momofuku and the health risks of restaurant reviewing, red robin's comeback spoiled by traffic troubles.

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Do you work for Kohl's or another company with a return-to-office mandate? Tell us about it.

When the coronavirus pandemic caused businesses to move to more remote work, many employees took advantage of the change.

But in the last four years, more businesses have started requiring their workers to come back to the office for a few days at minimum. The latest, Kohl's Corp., is requiring their employees to report to work Monday through Thursday if they live within 30 miles of the headquarters in Menomonee Falls.

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IMAGES

COVID-19 has changed online shopping forever, survey shows
Pandemic’s E-commerce Surge Proves Less Persistent, More Varied
Importance of Ecommerce During COVID-19 & Online Selling
Business Impact of COVID-19 Survey
COVID-19 sparked the greatest ecommerce growth in history
Pandemic’s E-commerce Surge Proves Less Persistent, More Varied

COMMENTS

Managing the effectiveness of e-commerce platforms in a pandemic
Given the severe impacts of the Covid-19 pandemic on business activities, this study presents a systematic framework to examine the effect of the perceived effectiveness of e-commerce platforms (PEEP) on consumer's perceived economic benefits in predicting sustainable consumption. This study adopted uses and gratification theory to base the ...
The impact of COVID-19 on the evolution of online retail: The pandemic
During the pandemic, businesses and consumers have been forced continuously to adapt to the immediate and drastic changes brought about by this crisis. ... authors called for further research in other countries better to understand the global impact of the pandemic on online retail (Gao et al., 2020; Li et al., ...
PDF The Impact of Covid-19 on Small Business Owners: National Bureau of
rly-stage effects of COVID-19 on small business owners from April 2020 CPS microdata. I find that the number of working business owners plummeted from 15.0 million in Febru. ry 2020 to 11.7 million in April 2020 because of COVID-19 mandates and demand shifts. T. e loss of 3.3 million business owners (or 22 percent) was the largest drop on ...
Online consumer resilience during a pandemic: An ...
The COVID-19 pandemic has strongly disrupted business operations and consumer activity. ... Our study also contributes to the growing body of research on online "unregulated buying" such as impulse, unplanned, and compulsive buying (LaRose, 2001). Little research has explored the relationship between online purchasing and hoarding.
How COVID-19 triggered the digital and e-commerce turning point
Amid slowing economic activity, COVID-19 has led to a surge in e-commerce and accelerated digital transformation. As lockdowns became the new normal, businesses and consumers increasingly "went digital", providing and purchasing more goods and services online, raising e-commerce's share of global retail trade from 14% in 2019 to about 17% ...
How E-Commerce Fits into Retail's Post-Pandemic Future
The pandemic has changed consumer behavior in big and small ways — and retailers are responding in kind. Since the early days of the pandemic Ernst & Young has been tracking these shifting ...
Microbusinesses flourished during the pandemic. Now we must tap into
About 90% of these online businesses employ fewer than 10 employees, and nearly 17% of the 20 million microbusinesses tracked in the U.S. were started after the onset of the pandemic, per Venture ...
Coronavirus' business impact: Evolving perspective
Here are other key findings from our research this week: The COVID-19 pandemic accelerated online purchases and package deliveries at an unprecedented rate. Even conservative estimates project that cross-border e-commerce in goods will expand to about $1 trillion in merchandise value by 2030, from its current value of approximately $300 billion ...
Pandemic's E-commerce Surge Proves Less Persistent, More Varied
We found that the share of online spending rose more in economies where e-commerce already played a large role—and that the increase is reversing as the pandemic recedes. This research, a new partnership between Mastercard, the International Monetary Fund and Harvard Business School, shows how private-sector data can help advance empirical ...
Impact of COVID Pandemic on eCommerce
Online, global consumers could not stop purchasing through their favorite websites (44% of global digital purchases) and online marketplaces (47% of global digital purchases). In response to this consumer migration to digital, Brazil, Spain, Japan saw the largest increase in number of businesses selling online as a reaction to the pandemic.
The impact of COVID-19 on small business outcomes and expectations
To explore the impact of coronavirus disease 2019 (COVID-19) on small businesses, we conducted a survey of more than 5,800 small businesses between March 28 and April 4, 2020. Several themes emerged. First, mass layoffs and closures had already occurred—just a few weeks into the crisis. Second, the risk of closure was negatively associated ...
Sustainable and resilient e-commerce under COVID-19 pandemic: a hybrid
The research also sought to learn about consumer behavior during COVID-19. The study indicated that COVID-19 pandemic had a significant impact on individuals all around the world. The pandemic compelled customers to purchase online due to their concerns about safety. According to the findings, the rate of online buying has grown over the ...
The pandemic has changed consumer behaviour forever
Billions of people affected by the COVID-19 pandemic are driving a "historic and dramatic shift in consumer behaviour" - according to the latest research from PwC. The consulting and accounting firm's June 2021 Global Consumer Insights Pulse Survey reports a strong shift to online shopping as people were first confined by lockdowns, and ...
Rise of the entrepreneur: online business during the pandemic
The rise of the have a go entrepreneur: how to set up an online business for success during the pandemic. Many of us have faced work challenges due to the long-term restrictions implemented as a result of the ongoing Covid-19 pandemic, with unemployment estimated to be at its highest since 2016 at 4.9%. However, 2020 is estimated to have seen a ...
The "New Normal" of Increased Online Business
The "New Normal" of Increased Online Business Transactions, and Revisiting Revenue Memorandum Circular No. 55-2013. 28 July 2020. by: Renz Homer S. Arreola. The COVID-19 pandemic has taken a significant toll on economies and people of all nations and of all ages, from all walks of life, across the globe. Social media and virtual meetings ...
The Internet and the Pandemic
Results from a new Pew Research Center survey of U.S. adults conducted April 12-18, 2021, reveal the extent to which people's use of the internet has changed, their views about how helpful technology has been for them and the struggles some have faced. The vast majority of adults (90%) say the internet has been at least important to them ...
Cruising through the crisis: How Amazon became the biggest gainer in
The coronavirus pandemic brought multitude of problems for business firms across the world. Shut businesses led to huge losses and mass layoffs. In the times of economic tumult, the e-commerce sector boosted unimaginably.
COVID-19 has changed online shopping forever, survey shows
The COVID-19 pandemic has forever changed online shopping behaviours, according to a survey of about 3,700 consumers in nine emerging and developed economies. The survey, entitled "COVID-19 and E-commerce", examined how the pandemic has changed the way consumers use e-commerce and digital solutions. It covered Brazil, China, Germany, Italy, the Republic of Korea, Russian Federation, South ...
Strategies and Challenges of Small-scale Online Food Businesses in The
This research examines the Philippine context, particularly Metro Manila and surrounding regions, during the pandemic which made it possible for budding entrepreneurs to come up with new initiatives like online food business operations by which they could earn an income despite difficult circumstances, and for consumers to
How will the global pandemic affect online businesses?
Analysis by Staistica for 2020 valued the Irish online market at over $3 billion with 70% of purchases from domestic businesses and a penetration rate of 73.5% and rising. These figures suggest that Irish consumers are embracing online commerce and supporting local enterprise. But this was before we entered into the global pandemic we are ...
The impact of the COVID-19 pandemic on higher education: Assessment of
The COVID-19 pandemic had radically changed higher education. The sudden transition to online teaching and learning exposed, however, some benefits by enhancing educational flexibility and digitization. The long-term effects of these changes are currently unknown, but a key question concerns their effect on student learning outcomes. This study aims to analyze the impact of the emergence of ...
Research Spiceworks: State of IT 2024
For Tech Brands: Craft campaigns that speak directly to the concerns and ambitions of tech professionals, enhancing engagement and conversion rates. For IT Professionals: Compare your strategies and challenges with industry peers, gaining a competitive edge and refining your approach. For Everyone: Plan your 2024 initiatives with confidence, armed with data-driven insights that align with the ...
Research: What Happens When Influencers Turn Off Comments
Recent research shows that one commonly employed tactic — turning off social media comments — can undermine influencers' key assets: their persuasiveness, likability, and perceived sincerity.
The State of Travel: Hotels and Online Travel
The Skift Research team recently unveiled its State of Travel 2024 report, a 400-page that documents the consumer and business trends in various sectors of the travel industry — including hotels ...
Effects of COVID-19 on business and research
The COVID-19 outbreak is a sharp reminder that pandemics, like other rarely occurring catastrophes, have happened in the past and will continue to happen in the future. Even if we cannot prevent dangerous viruses from emerging, we should prepare to dampen their effects on society. The current outbreak has had severe economic consequences across ...
Reality Check: Americans Misjudge Political Debates, New Research
The new research, Americans Misperceive the Frequency and Format of Political Debate, published in Scientific Reports and authored by Modupe Akinola, the Barbara and David Zalaznick Professor of Business, Sheena Iyengar, the S. T. Lee Professor of Business, UC Berkeley Professor Erica R. Bailey, and Columbia Business School doctoral student ...
The post-pandemic fast-food business: More beverages, snacks and
The post-pandemic fast-food business: More beverages, snacks and chicken, less pizza and sandwiches Fast-casual and quick-service restaurants on the Technomic Top 500 have grown sales by 33% over the past five years. But that growth was not created equally as consumers shifted their spending. By Jonathan Maze on Aug. 22, 2024
Growth from adversity: How older adults bounced back ...
COVID-19 Pandemic and Posttraumatic Growth in Residents of a Continuing Care Retirement Community: A Mixed Methods Study. Journal of Gerontological Nursing , 2024; 50 (6): 25 DOI: 10.3928/00989134 ...
Do you work for Kohl's or another company with a return-to-work?
When the coronavirus pandemic caused businesses to move to more remote work, many employees took advantage of the change. But in the last four years, more businesses have started requiring their ...
Will this be the year K-12 students recover from the pandemic's effect
The achievement gap before and after the pandemic widened during the 2023-2024 school year in nearly all grades, increasing by 36% in reading and 18% in math, according to a 2024 NWEA report.