By Kayla Matthews, Freelance Writer
Several months into the COVID-19 crisis, experts and analysts are beginning to clearly see how the crisis is impacting the economy. They’re also becoming more aware of the pandemic’s long-term impacts.
The pandemic is majorly impacting the economy as sudden shifts and demands have thrust certain industries into the spotlight. Consumption habits have changed rapidly, while supply chains have experienced numerous disruptions.
Here are six tech industries that have suffered the COVID-19 economic impact, plus how they’re likely to fare once the crisis has passed:
1. IT and Cybersecurity
Several states across the country began implementing stay-at-home orders in March. Subsequently, information technology (IT) workers quickly became responsible for shifting thousands of workers out of the office, setting up their devices and providing resources so they could work securely from home.
IT companies have had to rapidly increase spending on resources like hardware and software to manage the new demands, which puts pressure on company servers, cloud services, virtual private networks (VPNs) and computer resources.
Security staff and technology have also become even more important than before. Company networks have been made more vulnerable by the number of Americans working from home, connecting to business servers using personal devices and networks. Hackers, in response, are launching more attacks in an attempt to take advantage of the chaos and new network vulnerabilities.
If remote work is here to stay — which many business leaders believe will be the case — the IT and cybersecurity industry will likely remain highly central to business operations, even after the COVID-19 crisis has passed.
2. IT Hardware Manufacturers
The hardware sector was briefly disrupted by the temporary closure of major Chinese factories and material suppliers. While some feared a major supply chain disruption, the Chinese economy slowed down but never stopped.
Demand shifts will likely have a more significant impact on the industry. In March and April, there was a drop in consumer demand for technology like smartphones and liquid crystal display (LCD) televisions. At the same time, the networking hardware and technology needed to maintain business servers increased. These changes are likely to be temporary but may last well into the future — primarily due to low consumer spending that may be the norm for the next few months.
3. Circuit Board Manufacturers
Printed circuit boards (PCBs) are a critical component of electrical products and exist in just about every modern electronic device. These include many pieces of medical equipment — like ventilators, patient monitors and certain tests for COVID-19.
Increased demand for hospital equipment has helped the industry. However, the circuit board sector hasn’t been immune to the supply chain disruptions and overall demand drops within the past few months.
The circuit board industry is essential for the production of electronic devices and will likely recover over the next few months. Smaller manufacturers, however, may struggle to make up for the tough market conditions of February and March.
4. Semiconductor Manufacturers
Semiconductor demand is expected to decline noticeably this year. Many companies are putting off planned hardware upgrades. While many consumers are upgrading their personal hardware to handle the demands of working from home, these purchases will only partly offset total losses.
Semiconductors, like PCBs, are necessary components of modern electronics, and the industry itself will likely recover as demand evens out over the year. For the moment, however, some manufacturers — especially smaller firms — may struggle.
5. Telecommunications
The coronavirus was another setback for the telecommunications industry’s next big innovation, 5G.
Telecommunications companies began to roll out 5G, the next-generation cellular network technology, in 2019. However, their efforts were slowed by limited consumer adoption of 5G-ready tech, regulatory issues and pushback from meteorologists concerned about 5G’s potential to degrade the quality of weather predictions.
This year, the conditions for a broader deployment of 5G seemed right. Now, however, it looks like it will be another slow year for telecom operators. Telecommunications businesses are typically less impacted by economic recessions. But, the specific nature of the COVID-19 crisis has led industry experts to believe the field may struggle more than usual.
6. Telehealth/Telemedicine
As health care providers around the country temporarily shutter their practices, many are turning to high-tech solutions to continue seeing their patients. Telehealth solutions — which allow doctors to meet with their patients securely and remotely — have become essential for many health care workers over the past few months. As a result, the sector is experiencing explosive growth in demand.
It’s not clear if doctors will continue offering telehealth once it is safe for them to meet patients in person. As with working from home, however, many industry figures believe the crisis may push many health care providers to make remote medical services a permanent offering.
The Long-Term Economic Impact of COVID-19 on the Tech Industry
While the crisis is not over — and it’s unlikely the economy will return to normal for some time — experts are beginning to feel more confident in predicting the outbreak’s long-term impact on the tech industry.
The crisis may accelerate the pivot to remote work and services like telehealth. Business IT companies, as a result, will need to invest in resources that allow them to handle the growing numbers of Americans who work from home and companies that offer remote services.
Weak demand will make the foreseeable future somewhat tough for some manufacturers, especially those primarily invested in consumer markets. This low demand likely won’t last forever, though.