Why Recession Can Lead to Reinvention There is cause for economic concern amid the coronavirus outbreak, but young business owners are ready.
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The current coronavirus outbreak is a crisis on a scale most of us have never seen in our lifetime. Cities and countries are on lockdown, major events have been canceled, and people are panic-buying basic supplies while cutting back on travel. But separate from the tragic health implications of COVID-19, experts say there's likely going to be a global recession. You simply can't shut down cities, countries and supply chains without a big flow-on effect. Think of when a car breaks down on the highway and every car behind it has to stop — it takes time to get traffic flowing again.
In the long term, however, the stage is set for unprecedented growth, because on the other side of this crisis, fundamentals are strong. The millennial generation is hitting its stride financially this decade (and there's a lot of them). The boomers are into semi- and total-retirement and have more wealth than any other generation in history (and they intend to spend it while they are healthy). Technology is laying the foundations for every business to have global opportunities, and governments of the world are pumping money into the economy by the billions.
Imagine a big spinning flywheel that spins down at first, then catapults things up on the other side. First it dips, and then it flies off. This decade is going to be the Roaring Twenties anew on many fronts for entrepreneurs. Many big businesses are being disrupted and some will even fall over, creating opportunities everywhere for small businesses.
After the 2008 financial crisis, we saw the birth of dozens and dozens of brand new multi-billion dollar businesses (Instagram, WhatsApp, Uber, Airbnb, Dropbox, Slack, etc.). All of them were started by young people who probably would have gotten jobs at PwC or some established bank if not for the the previous recession. We will see this sort of activity again in the 2020s, because recessions can also lead to reinventions. Companies that try to stay the same get chewed up and spat out (Blockbuster, Toys "R" Us, Phones4U), whereas companies that reinvent themselves do well (Netflix, Disney, Apple, Microsoft). In many cases, small, nimble business become the bright sparks that fly high after a recession.
Will you cling to how you did business in the 2010s or will you use this time to transform into an even better version of your vision mission and values? Whatever business you have today will look different on the other side of this event.