Regions in India and other countries all around the world have been separated on the basis of size, population, state boundaries and many other basis of classification. For the first time in our lives, now places have been classified on the basis of the number of people who are infected with COVID-19. Places in India have been classified into Green, Orange and Red Zones on the basis of the number of people infected at a particular point of time. Green zones are areas with least number of people infected, Orange zones are those with limited number of infected people, and Red Zones are the regions with the most occurrences of the virus. The pandemic has also taken a toll on the economy and industries. This 3 article series by FIC highlights and classifies industries into Green, Orange and Red depending on how the pandemic has affected the operations of the industry.
Green Industry
The first industry which comes to mind of being classified as a Green Industry would be the Healthcare Industry. There is a double edged impact of the Pandemic on this industry, healthcare is in the epicentre of the pandemic, the private sector has risen to the occasion by assisting the government in all their endeavours from testing to field work to treating positive patients. However there is an unexplored side to this, the sector will need to increase its investment in variable (mainly manpower and consumables) as well as fixed factors (medical equipment, beds, creation of special isolation wards, etc.)
Moreover there has been a sharp drop in the number of incoming (out)patients for elective procedures and international patients as well. It is important to note that ‘Green’ used in extraordinary times does not denote that the healthcare sector is doing well. Many private hospitals are making unprecedented losses due to virtually zero patients for two months, and specialist hospitals (on a large-scale basis) have lost lots of business. But the general outlook is that because this sector is engaged (and overworked), it will manage to stay afloat.
Along with this, the medical equipment industry has taken a massive hit. A lot of countries like India import their medical equipment (gloves, syringes, masks, protective gear, implants, etc.) and machines (Computerised Tomography Scan and Magnetic Resonance Imaging machines among many others). Healthcare workers all over the world are working round the clock to provide the best services to patients and are not being taken care of or compensated as they should be. Governments of different nations have announced various benefits for the industry and workers but it seems to be insufficient. Future predictions for this industry look promising since people will be more careful for their health and well being and would give a boost to the industry.
Other services in the Entertainment sector have been thriving since the start of the pandemic. Companies like Netflix have seen a sudden surge in the number of users. Due to people staying in their homes the number of Netflix users have doubled during the past months, reaching around 20 million subscribers in India. Additionally Netflix’s stock price has also risen a whopping 83% from $364.08 (1st April 2020) to $436.25 (21st May 2020)**. Due to this sudden increase in the number of users Netflix had to reduce the top video quality it provided to reduce the amount of bandwidth consumption. Similarly, Disney’s new video streaming service announced last month that it has crossed 50 million subscribers.
Other companies in the technology sector have also managed to increase their revenue by providing additional services. Amazon and other companies increased orders delivered. Amazon’s stock price rose from $1907.70 on 1st April 2020 to $2497.94 on 20th May 2020. Video conferencing app ZOOM has gained popularity among people of all ages and became one of the primary softwares used for video conferencing not only in the corporate sector but in the educational sector as well. Its stock skyrocketed 248.9% from the beginning of this year. This has not only helped companies and other institutions continue normal operations but it has also helped connect people all across the world.
In the early stages of the pandemic, bulk buying of essential items such as toiletries, food and other essential amenities had become very common. On a humane level, this behaviour of consumers was bashed all around the world – but economically speaking, companies like Walmart, Costco, Target and other major chain stores profited greatly from this. Costco’s earnings are expected to see a growth of 7.9% this quarter.
By Rishabh Khetawat and Iman Bhatti. This article is the third and final part of a three-part series focussed on examining the industrial impact of the pandemic.