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How has the Coronavirus Impacted the Tech Sector

How has the Coronavirus Impacted the Tech Sector

This time last year you’d have read lots of bold predictions for the new year and decade ahead as we looked forward to the 2020s and the next wave of possible technological advances. Yet for this sector, and every other corner of the global economy, the coronavirus pandemic ensured that many of those prediction pieces now read like wishful thinking.

As governments across the world have wrestled with what to do – and some have been stricter than others, to varying success – there’s clearly been an economic fallout from the public health crisis. While we’re still counting the costs of the pandemic – and still not free from its impact – it’s estimated that spending on devices (in the likes of PCs, tablets, mobile phones and peripherals) dropped about 12.4%.

Zoom boom – and tech’s big role

Yet tech’s story isn’t an unrelentingly negative one. The same figures referenced above also showed both a rise of spending on software (+3.3%) and infrastructure (+3.8%).

Pick away at the global economic numbers and you can also see some ways in which tech is helping economies to weather the worst of the storm. 

Japan, for example, has experienced 5% growth in the third quarter of 2020 – leading the surge of Asian economies in general in what is being referred to as a ‘Zoom boom’. The term refers to the fact that online working – now increasingly common as employees stay within their own accommodation – has caused an increase in demand for screens and laptops that can deliver reliable and efficient work from home. With Asian countries proving to be among the largest producers of consumer electronics and communication equipment. 

 How has the Coronavirus Impacted the Tech Sector

Not just work

It hasn’t all been about work either. With typical leisure activities and tourism ground to a halt, people have been looking to technology to keep themselves entertained. Whether it’s through feelgood games released such as Animal Crossing, collaborative online experience such as those offered through Fortnite or, now, with new consoles, gaming has risen to the challenge to fill the leisure void in our lives.

It’s thought that just under nine million PlayStation 5 and Xbox Series X consoles will be sold worldwide between now and the end of the year in a sales rush that could outstrip anything the industry has seen before.

 How has the Coronavirus Impacted the Tech Sector

What’s next?

By facilitating work during a pandemic – and filling an entertainment gap in our lives – tech has reacted well during the crisis. So, will gains disappear in 2021 as people slowly look to get back to normal after the crisis? 

There was certainly some suggestion of that when looking at the way the markets reacted to positive news from Pfizer about a coronavirus vaccine. As CNBC notes, Zoom Video’s share price fell 17.4% – while other ‘stay at home’ stocks suffered too with companies in the likes of Amazon, Netflix, Shopify down 5.1%, 8.6% and 13.6% respectively. 

Yet we shouldn’t read too much into this reaction. For context, Zoom Video had seen its value rocket 635% before the November 9th drop and it’s unlikely that the world will have a ‘reset’ and simply return to how things were.

Video conferencing apps such as Zoom have helped to win over remaining sceptics and fuel a rise in remote working that shows no sign in abating – with more than a quarter of the workforce still expected to be working from home for multiple days a week by the end of 2021. So, yes, the growth of such apps probably won’t reach 2020 levels – but there’s every chance that they can play a much larger part in our lives than was the case pre-pandemic.