The coronavirus, or COVID-19, presents the biggest threat to the global economy since the Great Recession of 2008 — not to mention the threat to human life. The outbreak already is decimating the travel and leisure industry, and forcing trade shows to scale down or cancel.

It threatens manufacturing in many industries, and it will have a negative impact on consumer sentiment and purchasing patterns. Industries particularly affected are those that rely on raw materials, components, or finished product manufacturing in China, Italy, South Korea, and other regions hard hit by the outbreak.

Among them are two industries key to the global economy — electronics and automotive. The automotive industry already is taking a hit by losing a month’s worth of sales in China, the world’s largest market for auto sales.

Despite China’s efforts to get manufacturing back online after the extended Chinese holiday, the effort is proving difficult because of continued local travel restrictions. It has become a challenge to get the necessary manpower to the right locations to restart factories or relieve the skeleton manufacturing crews utilized through the holiday.

While there was an increase in inventories prior to the holiday, many will become depleted in the next few weeks, resulting in supply shortages in manufacturing. In addition, the slowdown in shipping will impact not only the products available to consumers, but also the resources necessary to resume normal shipping schedules.

As a result, the impact of the outbreak on manufacturing will determine the fate of the global economy in 2020 and possibly even into 2021.

What We Don’t Know

A bigger issue is lack of knowledge about the virus. While it is becoming clear that people can be carriers without displaying symptoms, or may have the virus for several weeks before displaying symptoms, it is not clear how long the virus can live outside a human host.

It is also unclear how large the outbreak may be due to the lack of adequate testing. Many people have not been tested because they don’t exhibit symptoms of the virus. Even in the U.S., where the government apparently allowed the potential spread of the virus through emergency personnel who failed to follow quarantine safety procedures, the spread of the virus could be much broader than what is known.

California claims to have upwards of 8,200 people under observation. There is fear of what the impact of the virus will be as it reaches underdeveloped regions with fewer medical resources, as seen with the recent outbreak in Iran.

Based on a recent case in Japan, it also appears that a person may be re-infected. Some already are calling this a “pandemic,” which if not contained quickly, will have a huge impact on the global economy.

However, despite the potential gloom that lies ahead, the current situation also is creating new opportunities in technology beyond the need for more medical equipment and supplies, and the increase in e-commerce.

Opportunity Landscape

The opportunity lies in changes to how business is conducted. Despite advancements in technology, a significant amount of business is still conducted “face-to-face” or f2f. Some of this is cultural, especially in Asia. Some of this is strategic (like being able to read body language during negotiations). However, much of it is due to the lack of an effective technology for interaction.

Voice and video conferencing, as well as the use of various productivity tools, has made work collaboration of disbursed resources possible, but it has done little in the way of enabling sales and promotion. This would account for the steady growth in trade show and convention revenue that reached and estimated US$15.5 billion in 2019, according to a summary of various estimates.

Trade shows and in-person meetings allow people to establish a connection, effectively demo new products, and combine physical experiences with one-on-one interactions and real-time feedback. Several trade show startups and tech companies have attempted to host virtual events in the past with very poor results.

Currently available collaboration tools have failed to meet users’ full range of needs and cost expectations, which may account for why a start-up like Zoom was able to enter a market that should have been dominated by the likes of Microsoft, Google and Cisco, with products like Skype, Hangouts and WebEx.

Now may be the opportunity to rethink the use of technology for sales, trade shows, and other f2f interactions in business.

Moving the Queue to the Cloud

As a high-tech industry analyst, I can work from anywhere. I live in the middle of the woods in the White Mountains of Eastern Arizona. Yet I travel extensively to work with existing clients, meet with potential clients, and hear and see the latest technology at trade shows and company events.

Fortunately, some of the latest technology could pave the way for more interactive experiences. Virtual reality (VR) and augmented reality (AR), as well as various combinations of mixed reality (MR or XR), have made huge strides in recent years.

Facebook’s Oculus Quest, accompanied by a new slate of interactive games, finally offers the immersive interactive experience VR has been promising.

If we can take that technology and combine it with the real-life experience of demoing new products and talking in real-time with company representatives, we may have a new model for trade shows and in-person meetings.

Doing so would be no easy task, especially when you have to account for thousands of people aimlessly wandering around a trade show, but just as people queue up for demos in real life at trade shows — especially VR demos — they could queue for demos or to meet with company representatives in a virtual environment.

Cloud resources are a key enabler. Everything from cloud rendering to virtual assistants could be utilized to improve the user experience and create a more natural and effective user experience.

Born of Necessity

This creates an opportunity not only for those who are developing the key components of the solution from the edge to the cloud, but also for those who can integrate the technologies with applications and user interfaces to provide the interactions as a service. This is a huge opportunity for everyone from Zoom to Facebook to create a virtual business environment. Ready Player One, here we come.

The greater challenge may be the change in usage patterns required. Can we reprogram several generations of business professionals to use technology rather than an airplane and a handshake?

It’s usually easier with the younger generation — hence my reference to the movie Ready Player One. However, the change may be driven by necessity as the world faces a potential pandemic, as well as changes in the environment, resources and politics.

Just as the COVID-19 virus could have a significant impact on the global economy, it could force a significant change in society through technology that likewise ripples throughout the economy. This also could be a green alternative to using up the resources required to transport people and equipment across the globe for trade shows. Where there is adversity, there is also opportunity.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.


Jim McGregor has been an ECT News Network columnist since 2017. He is the founder and principal analyst at Tirias Research with more than 30 years of high-tech industry experience. His expertise spans a broad range of product development and corporate strategy functions, such as semiconductor manufacturing, systems engineering, product marketing, marketing communications, brand management, strategic planning, mergers and acquisitions, and sales. McGregor worked for Intel, Motorola, ON Semiconductor, STMicroelectronics and General Dynamics Space Systems prior to becoming an industry analyst and In-Stat’s chief technology strategist. Email Jim.



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