During the 2020 pandemic lockdown, many high school students embraced innovation. For Caleb A., a senior at Sandy Creek High School in Tyrone, Georgia, that took the form of Up Next Finance, a website to help high school students understand investing, economics and personal finance. “My mission is to help people learn about finance and create a better life for themselves,” says Caleb, who has also turned to TikTok to share finance tips.
Like any good researcher, Caleb couldn’t help but observe the shifting financial scene during COVID, initially with a plummeting stock market that was 30% off its high. That volatile landscape prompted him to also write Teenage CFO, a book on finance that includes a case study about how the pandemic is affecting business.
“My overarching point is that certain industries benefited from the pandemic, while others saw catastrophic effects happen to them,” notes Caleb. “You look at the airlines, cruise operators, hotel, travel and lodging. They saw their businesses being crippled by the pandemic and revenues fell off a cliff…On the other side, we look at technology: Amazon, Apple, HP, all these companies have benefited from remote work and work outside of the office. They saw huge gains in their revenues and huge gains in usage and traffic to their websites.”
Caleb is not alone in his pursuit of understanding the pandemic effect. The advance of the Coronavirus, quarantine, vaccination and the slow emergence from the crisis have given researchers the opportunity to study issues they’ve been interested in for years. It has, in many ways, been an experiment rich with opportunities for data collection and observation.
Needless to say, it has been keeping academics at the Wharton School busy. For example, Dr. Guy David, Wharton’s Gilbert and Shelley Harrison Professor of Health Care Management, has been studying how resources are allocated during the global health crisis. “The pandemic has disproportionately affected disadvantaged people, it has disproportionately affected people who lost their jobs, it has disproportionately affected people who needed care and had to get it virtually. It gave us the opportunity to shed some light on these issues and get some very important variation that we didn’t have before,” says Guy David, Wharton’s Gilbert and Shelley Harrison Professor of Health Care Management.
As we think about the pandemic’s effect on business, here are some of the latest investigations in which researchers are digging into the data:
Productivity and Innovation. Michael Parke, a Wharton professor of management, supervised a survey-based study on productivity and innovation that was commissioned by Microsoft and conducted by Boston Consulting Group and KRC Research. The study polled about 9,000 managers and employees in large firms in 15 markets across Europe, with about 600 respondents per country. Productivity and innovation are two factors that drive business success. The study found that productivity – how effectively employees work and produce goods and services — has remained stable or even increased for many companies that shifted to remote work during the coronavirus pandemic. However, innovation has taken a hit as both leaders and employees feel more distant from each other.
One of the bigger lessons in the study, Parke said during an interview on Wharton Business Daily on SiriusXM Ch. 132, is the “learning opportunity” that the pandemic is providing for companies. ”This experiment that was forced upon us is showing that employees are able to be productive, and there are some things they really enjoy about that autonomy, so that trust is something organizations should really increase,” he said. “At the same time, [they should be] developing the capabilities to maintain good collaboration in this remote working environment, because flexibility for individuals obviously can create some collaboration challenges as well.”
“When you make decisions laser-focused on efficiency, you might be missing on resilience.” — Santiago Gallino, Wharton Professor
Economic Impact. The Penn Wharton Budget Model has been hard at work during the COVID-19 pandemic, providing research and economic analysis that help explain the fiscal impact of public policy. These numbers can help policymakers arrive at better decisions about new laws and regulations that are based on solid data. The Penn Wharton Budget Model’s economists and data scientists have studied everything from pandemic job losses to how the economic recovery hinges on the vaccine rollout.
One of PWBM’s most recent studies updates its research on the long-run effects of learning loss on the economy – in other words, how will the pandemic school closures (all those hours in Zoom class!) and resulting levels of learning loss ultimately impact the labor market and how productive workers can be? Studies have found that remote education reduces learning outcomes for students and that current students are likely to earn less in future wages.
The good news: the Budget Model’s latest findings after digging into the numbers suggest that student learning loss was not as great as previously reported. Still, there will be some effects on future productivity. Would a proposal to extend the school year and the learning make things better? The summary: “Using recently available data on learning loss from pandemic school closures, PWBM estimates that projected 2051 GDP (Gross Domestic Product) is 1.4 percent lower than it would have been without the learning loss. Extending the 2021-22 school year for all public schools by one month would cost $78 billion and limit the reduction in 2051 GDP to 1.0 percent.”
Broken Supply Chain. The supply chain crisis is among the greatest pandemic lessons learned for businesses. It began with empty store shelves and supply shortages (toilet paper!) way back in March 2020 and has continued to plague companies. The COVID-19 pandemic caused product shortages in the second quarter of 2020 as factories closed and people who were stuck at home didn’t buy as much. The supply chain woes continue, with fewer parts to make products (like computer chips) and a labor shortage. Cargo ships are circling ports, containers filled with merchandise sit undelivered in giant containers, and stores just don’t have as much product to sell during their busiest season of the year.
Supply chain disruptions rippling through wholesale, retail, transportation and labor, said Wharton’s Santiago Gallino, a professor of operations, information and decisions, present an opportunity for companies to rethink the resiliency of their supply chains. Supply chain efficiency – making sure products are created, shipped and sold in the best way possible – is always a priority for companies. But now, suggested Gallino during an interview on Wharton Business Daily on SiriusXM Ch. 132, companies also need to be thinking about resiliency, or how quickly they can adapt to disruptions and maintain normal business operations. “When you make decisions laser-focused on efficiency, you might be missing on resilience,” he said. “Companies have discovered if it’s one shock that lasts a relatively short time, you can manage and take the pain and the hit. But when this has been going on for several months, now the issue of thinking very carefully about how you can be more resilient going forward is an interesting conversation.”
And it’s an even better topic for research. As businesses are assessing their existing supply chain from end-to-end and identifying gaps and vulnerabilities, the researchers are watching, surveying, gathering data and generating insights. Stay tuned for the findings.
Caleb A. worked on an innovative project throughout the pandemic. Did you also embrace innovation? Share your story in the comment section of this article.
What are some of the learning opportunities mentioned in the article or implied here that will help businesses work better and smarter? What are other business-related observations from the pandemic?
Why is the Penn Wharton Budget Model’s research and economic analysis so important to the future of business?