A recession triggered by the COVID-19 coronavirus is now almost guaranteed, and will fundamentally change the way do business, placing a greater focus on technology than ever before.
This is according to Nigel Green, CEO of independent financial advisory firm deVere Group, who made the comments following the US Federal Reserve’s decision to make a second emergency interest rate cut.
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“Any way you look at it, it’s now almost certain that there will be a coronavirus-triggered recession as both global supply and demand are impacted,” said Green.
“We can expect this recession to be deep but short. The slowdown will be temporary because it’s not caused by deep-rooted problems and imbalances in the economy, rather by a wholly unexpected shock that’s gripped the world.”
How the coronavirus recession could speed up Industry 4.0
According to Green, all recessions cause a reshaping of the business world and beyond – and this one will be no different.
“Every recession produces a new world. This one will too. A COVID-19 recession is likely to fundamentally shift how we live, do business and invest,” he said.
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By GlobalDataThis will particularly, Green said, cause an acceleration in the adoption and development of Industry 4.0, also referred to as the fourth industrial revolution, which sees smart technologies transform industries at every stage.
“The coronavirus outbreak can be expected to speed up the so-called fourth revolution, which is fuelled by new technologies, such as artificial intelligence and mobile supercomputing,” he said.
“New industries will emerge and, of course, there will be winners and losers. This will mean job losses in some sectors and huge, possibly unprecedented, job and investment opportunities in others.”
The social distancing and self-isolation initiatives that are currently being put in place around the world are likely to help reinforce adoption of some digital technologies.
“Enforced social distancing will highlight how families, friends and colleagues can interact, remain connected and work, how businesses can still efficiently operate, and how investors can manage assets via advancing digital infrastructures,” said Green.
“The disruption and shifts will underscore that we live in a time of great capabilities and great promise. But to build and protect their wealth as the world adapts to a new era, investors should be revising their portfolios to mitigate risk and take advantage of the opportunities.”
Read more: Coronavirus disruptions: How CIOs can prepare
