Almost everyone around the world is wondering what will happen to the global economy in the coming months. The COVID-19 pandemic launched the entire planet into a recession of catastrophic proportions. That said, things have already started to improve, albeit slowly.
Daniel Orfin of Troy, Michigan, is the founder and president of Orfin & Associates. He provides his insight into how the world economy will recover from the devastating impact of COVID-19.
The Innovation Economy
The innovation economy is going to be key to recovering from COVID-19. The innovation economy refers to the economic activity specific to start-ups. Pre-COVID-19, start-ups were experiencing a ton of growth in economic markets all over the world. Take Canada for example, where thousands of registered start-ups raised more than $3.7 billion worth of capital in 2018 alone. That is why Dan Orfin believes that start-ups will serve as the supply chain for the new, post-COVID-19 economy.
Consider the nature of entrepreneurs. Entrepreneurs, those who found start-ups, are scrappy, creative, and hardworking by nature. They are willing to take risks and put everything on the line just to have a shot at building something successful or worthwhile.
Thus, it is these people that have the strength and resilience to keep going, even amidst an economic recession. However, Orfin notes that it isn’t just up to the entrepreneurs to persevere during this trying time. Governments and venture capitalists need to continue investing in the innovation economy to ensure it stays afloat and all the progress that had been made prior to the pandemic does not go to waste.
The COVID-19 Vaccine
A COVID-19 vaccine is not only key to improving the worldwide health situation, it is also crucial to the economy. Daniel Orfin of Orfin & Associates claims that the sooner we have access to a coronavirus vaccine, the sooner the economy will return to normal. The economy and health sectors are much more linked than people may have thought prior to COVID-19.
When a vaccine has successfully made it through clinical trials and is made public, only then will we start to see a significant upward trend in the global economy. A vaccine should make it much safer for people to go about their business as usual, including travelling. At that point, businesses can fully reopen, increasing the number of available jobs and overall making people feel safer about leaving their home and spending money again. Thus, a COVID-19 vaccine is the best chance we have at kick starting the recovery of the global economy.
Patience is Key, Says Dan Orfin
A quick economic recovery is extremely unlikely. Thus, we all need to be patient and prepare for a much slower ramping up of economic activity than in the past. In part, the COVID-19 pandemic has been characterized by a smattering of different approaches around the globe. While every country certainly has the right to implement their own measures and policies, greater uniformity would help when it comes to managing the pandemic and improving the economy.
For example, simple measures like mandatory masks in indoor spaces, physical distancing of six feet between people of different households, and a very gradual easing of such restrictions as cases decrease would help improve the global economic reality we are currently facing.
Despite the trouble that certain countries have had, Dan Orfin of Orfin & Associates still believes that there is light at the end of the tunnel. Most countries now have the coronavirus under control, and luckily, countries in North America have been able to watch what those in Asia and Europe have been doing to better learn which methods are most effective. Overall, patience is key when it comes to economic recovery. It will be slow, but it will happen as the global health predicament improves.
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