It’s been a little over a year since the world became aware of the novel coronavirus, COVID-19. The virus’ spread has been felt in every corner of the world. It has paralyzed economies, overwhelmed healthcare systems and has been responsible for over 2.4 million deaths worldwide to date.
While there are signs of optimism as vaccines begin to rollout, the availability of vaccines is likely to vary hugely around the world. Businesses large and small thus have to continue adapting their business models, especially when crossing international borders.
International Business professor Klaus Meyer has built an academic career researching how foreign companies invest in emerging markets, and how Chinese companies are entering the global marketplace.
However, for since COVID-19 struck Meyer has shifted his focus to studying not only the impact that COVID-19 has had on global business operations, but also exploring the potential everlasting effects of the pandemic. Specifically, he’s been developing conceptual thinking around the future of business-related travel and exploring reasons for China’s V-shaped recovery.
Future of travelling for business
The COVID-19 pandemic has stalled business travel to a near standstill. The notion of short-term trips to nurture customer relationships, or to visit a subsidiary has been nearly entirely replaced with video-conferencing options. Meyer believes even with a globally distributed vaccine, business travel will likely change forever.
“So, we will have substitution effects and that’ll have impact on how we do international business,” said Meyer. “Companies will be much more selective when to send people abroad for a business trip, in particular for shorter business trips.”
Meyer believes virtual technologies, such as Zoom, are here to stay. They will be best applied best for routine interactions, such as budget approvals, or maintaining existing relationships.
However, travel will still be effective and justified for establishing new bonds and developing trust.
“[Travel is important] when it comes to building new sales leads, for example, or building new relationships, and having intensive conversations about vaguely defined topics, and developing a new projects,” said Meyer. “For some purposes, it’s still very relevant to travel.”
Drive behind China’s recovery
While COVID-19 has caused virtually unprecedented upset to the global economy, studying how well it recovers will lend valuable insight for future generations. Recently, Meyer has been looking at how China has managed to achieve a rapid V-shaped recovery thus far, and how this has been enabled in large part by local entrepreneurs.
Meyer argues that there are three complementary forces at play:
- China’s tough regulations on people’s mobility that constrained the spread of the virus – at least after January 22, 2020.
- The strong digital economy infrastructure, not only in terms of services available, but with consumers that are used to using online for shopping and many services; and
- Chinese entrepreneurs acting quickly and decisively to develop new products and services when cities or provinces entered a lockdown.
Meyer and his research collaborators, emphasize the importance of entrepreneurship in tackling the consequences of the coronavirus. Entrepreneurs in emerging markets are used to high volatility and used to quickly pivoting, thereby able to come up with solutions to problems on short notice.
“Crisis creates entrepreneurial opportunities that, if acted upon, will help societies – particularly in emerging economies – to overcome the social and economic disruptions of the pandemic. They can identify social needs and develop novel solutions to such needs,” said Meyer. “We argue that entrepreneurs in emerging economies may be particularly able to respond to such opportunities to the benefits of their societies. Specifically, the recent economic recovery in China has been enabled in substantial part by local entrepreneurs.”
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