Digital Solutions for Hard Hit Economic Sectors

While all sectors have suffered consequences from COVID-19, specific sectors carried the brunt of the economic downturn more than others. Businesses in the hospitality sector such as hotels, restaurants, and food service; firms in travel, tourism, and transportation such as airlines, tour operators, cruises, and shipping, and businesses that are employment-intensive such as gyms, theme parks, convention hosting, live sports, movie theaters, film production, and construction have all been disproportionately devastated by the outbreak. As countries attempted to curb the spread of the virus through economic restrictions and lockdowns, the demand for oil and gas has dramatically gone down while the vast retail sector suffered massive losses from the fall in sales.  

Among the hardest hit, micro, small and medium-sized enterprises (MSMEs), and brick and mortar stores with smaller footprints have immensely felt the negative impact of COVID-19. Due to their smaller operating scale, MSMEs exhibit lower liquidities and easily succumb to strong cost pressures caused by a sudden fall in sales, disruption of the supply chain, or reduction in labor supply. The situation seems to be worse in rural areas where there are fewer economic opportunities and more unregistered enterprises.  

As businesses seek to adapt to a changing reality, a wave of digitization and “going online” has occurred. Several MSMEs have sought to leverage tools of the digital economy—such as online marketplaces and platforms—to stay afloat. However, these small firms are new to the market. They do not possess the networks nor the know-how to navigate the digital marketplace.

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Additional References 

Tourism-Driven Economies in the Pacific to Feel Brunt of COVID-19 Pandemic 

After COVID-19, How do We Bring Tourism Back Better? 

The global economy will emerge stronger if COVID-19 drives digitization 

Fintech is emerging as a driver of innovative financial solutions during COVID-19