Signs of reopening abound, and predictions of a return to a life somewhat as we once knew it are now everywhere.
After 16 months, the COVID-19 crisis finally shows signs of abating in the United States. That means good times may be ahead, but the post-COVID world will be different than what we were accustomed to before the pandemic.
What can we expect? And how can today’s young professionals position themselves to thrive in the future?
Cal State Fullerton Finance Lecturer Joe Greco, who studies international and corporate finance and investments, and is also owner and principal consultant for Irvine-based Global Financial Strategies Inc., gives an expert perspective of what might be on the horizon.
What are the biggest changes in business that you’re seeing as we reopen?
As the global economy reopens, which will be slower than in the U.S. as most countries don’t have the supply of vaccines that we do here, the most changed industry will be the security industry. This is due to the increased use of digital media, especially purchasing online. The need to secure increased use of digital transactions will hasten the decline of markets already in progress, especially shopping malls and department stores.
How can today’s college students and graduates prepare for these changes?
The best preparation is to be observant as the government continues to change the status of the lockdowns. Industries that depend on live bodies to attend will have the best opportunities for job openings. The most immediate openings will be in the sports industries. There will also probably be an increased demand given the significant number of retirements.
There are anecdotal reports that “pent-up demand” may power the economy in coming years. Is there any evidence to back this up?
I know of no academic research that proves conclusively that increased savings rates result in increased pent-up demand. The pent-up demand that is present now is probably most concentrated in the consumer sector, where major purchases have been postponed or constrained by the lockdowns globally.
Will higher rates of savings continue?
Americans traditionally are not great savers compared to residents of other developed countries, such as Germany, which has a savings rate as high as 32% of consumer income, according to World Bank data. We are lucky to see 17%, but estimates vary. If the past is any indicator, there will not be a significant change in American consumer saving patterns in the long run. Additionally, if interest rates paid to savers continue to be very low, there is no more incentive for Americans to save other than the safety factor in light of a future pandemic.
If you would name a single industry that is primed for the most growth post-COVID, what would it be and why?
The sports industry that relies heavily on live attendance is most primed for the most growth in profits. Other industries that have been heavily impacted by retirements will also be primed, especially the fields of teaching and insurance.