Coronavirus Pandemic Could Make Big Companies More Powerful
In an interesting analysis, Bloomberg reported on Tuesday that the Coronavirus pandemic raging through most parts of the world could well refashion...
In an interesting analysis, Bloomberg reported on Tuesday that the Coronavirus pandemic raging through most parts of the world could well refashion the economy in a way that larger companies play a bigger role. In terms of both employment and revenue share, the bigger companies could move in with greater strength, the report suggests. It will not merely be survival of the fittest but a case of the powerful getting more dominant and stronger.
The advantage which bigger companies enjoy is clearly because of deeper pockets and wider presence, the Bloomberg report suggests, among other things. Predictably, the hardest hit by the Coronavirus pandemic have been small and medium-sized businesses, in India, as in in other parts of the world. It is for this reason that Prime Minister Narendra Modi in his interaction with chief ministers on Monday, asked them to focus on the small and medium-sized sector. These businesses are cash-strapped, and the government would find it difficult to prop them up through policy measures.
The other significant feature which would emerge as pointed out by the Bloomberg report is that big companies will control supply chains. This will be a two-way street, since suppliers would also find it more reliable to lean on large companies. The report also indicates that employees feel more secure working larger companies. This is true of customer confidence as well, it suggests.
The social value of certain sectors such as bio-pharma and technology will go up, according to the Bloomberg report.Another key advantage which large companies have is their ability to leverage technology, especially information technology. The report suggests that here again, the smaller and medium-sized firms may take a hit.