Can we actually look back at the September 11, 2001 tragedy and take away hope that small business can survive the recent Covid pandemic?
On September 11, 2001 the world changed as we once knew it.
I remember driving to work and listening to the radio in total disbelief. How could something like this happen in todays world.
The aftermath of this tragedy brought the world to a standstill. Up to that day the modern world had never to deal with that kind of crisis.
It is reported that the four day shut down of the airline industry cost 1.4 billion dollars alone. (https://fas.org/irp/crs/RL31617.pdf)
Investopedia.com reports in a recent update article July 7, 2020
- “The 9/11 terrorist attacks on America caused significant economic damage in the immediate aftermath, rippling through global financial markets.
- Airlines and insurance companies took the hardest immediate hit, and U.S. stock markets initially fell more than 10% in the days after.”
The Good News
The article continues with the following.
- “Despite its lasting impact on the American psyche, the economic and financial impact of 9/11 was fairly muted, with markets bouncing back months after to new highs.
- This was helped, in part, by a resilient American economy along with support and stimulus from the federal government.” (End of article)
Even though the cost to the economy in the US was in the billions of dollars the bounce back of small businesses to recover was quite amazing .
Markets responded in the months after 9/11 and record high profits were recorded.
Consumer confidence was there to help in the rebound.
In the spring of this year we all learned of the devastation that the COVID virus was capable of inflicting to the small business economy.
Businesses were closed and the economy worldwide came to a standstill.
If we thought for one moment that 9/11changed the world I think that it is fair to say that the COVID 19 pandemic has well outdone that idea.
In a recent paper ”The Impact of COVID-19 on Small Business Owners: The First Three Months after Social-Distancing Restrictions “ by Robert W. Fairlie, states the following.
“The number of active business owners in the United States plummeted by 3.3 million or 22 percent over the crucial two-month window from February to April 2020. The drop in active business owners was the largest on record, and losses to business activity were felt across nearly all industries. African- American businesses were hit especially hard experiencing a 41 percent drop in business activity. Latinx business owner activity fell by 32 percent, and Asian business owner activity dropped by 26 percent. Simulations indicate that industry compositions partly placed these groups at a higher risk of business activity losses. Immigrant business owners experienced substantial losses in business activity of 36 percent. Female business owners were also disproportionately affected (25 percent drop in business activity). Continuing the analysis in May and June, the number of active business owners remained low – down by 15 percent and 8 percent, respectively. The continued losses in May and June, and partial rebounds from April were felt across all demographic groups and most industries. These findings of early-stage losses to small business activity have important implications for policy, income losses, and future economic inequality.” (End of article)
The devastation in the small business community through the first 6 months has been catastrophic. However through this devastation, small rebounds have been made in the months of May and June. Self employed and small business are starting to bounce back.
Here is an example of self employed businesses using their creativity to bounce back, as taken from a recent fortune.com article.
“This is a marketplace that moves faster than we’ve ever known before. The life cycle of companies is much shorter now,” said Derricks. “For companies of every size, there’s a rule of thumb to having some portion of your business that is ready for that. That 80% is business as usual but leaving 20% to experiment, to try new markets, to try new products. I think resilience comes from having that kind of flexibility in your spine.”
During the pandemic, one major shift among small businesses has been bulking up on technology.
As social distancing rules and stay-at-home orders move commerce online, small businesses, known for lagging behind in their tech, are pressured more than ever to reach customers through digital channels.
In another example of going with the flow amid the coronavirus, Schmidt cited her local bakery in San Francisco.
Those on social media know well that the pandemic has cultivated a passion for bread making among amateur chefs, with a love of sourdough booming in the city of the Golden Gate Bridge.
Seizing on the moment, the bakery began offering a free sourdough starter kit every Sunday morning—a move that likely also pushed customers to buy a baguette or cupcake as they were getting their freebie.”
It can be seen from the information above that both the 9/11 attack back in 2001 and the current COVID19 pandemic have both had devastating effects on small business.
However, it can also be noted specifically that self employed small business owners are very resilient and innovative.
They will survive and rise up out of the ashes to be strong again.
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