Coronavirus and The Tech World

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Category: From Across The Web

Published on Thursday, 20 February 2020 08:16

Written by Ben

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Introduction

A significant percentage of the products we purchase were, partly or fully, made in China. A big part of that significant percentage is consisted of tech products, both low and high-tech. In the low tech realm of products one can find almost everything they could have ever imagined or dreamed of within the limitations of current technology and as long as someone else had the initiative to materialize it; Stretching from tiny and seemingly insignificant spare parts for various products all the way to retail items such as smartphone cradles and end user equipment.

In the high-tech spectrum of products one could find, yet again, a vast array of product types. from customizable single ASIC chips to entire high-end mission critical servers. China has become over the last decades a powerhouse of the global tech industry. A kind of a "One Stop Shop" for the ambitious entrepreneur, the visionary inventor and for the already established firm who is in need for an efficient, fast and a cheap manufacturer. Any one of the aforementioned could theoretically come here and rent the services that the mighty dragon has to offer. This dragon however, has gotten a little ill lately and has been developing some issues spewing out its usual flames of tech dominance. I am referring of course to the notorious Coronavirus.

Panic:

Apart from the slowly accumulating mass panic the world is slipping into due to the health concerns the Coronavirus carries with it, which are rightfully legitimate , there is another side effect the latter might be creating. This side effect is the possibility of an emerging global tech crisis or at the very least, to a certain extent, a recession in the tech world with a great long term negative influence over local tech hubs in China.

The disturbance caused by the Coronavirus pandemic in China has a direct effect over its local economy and manufacturing capacity. This creates a ripple effect of an inability to keep up with the usual supply demands of the modern world for tech products and parts which it requires to keep its economy healthy, functioning and growing. Combined with fake news, rumors, projections with no viable basis with the support of visible evidence of shortage the road to a financial panic is short.

When there's panic people tend to accumulate and in this case it's not food, but tech. Importers, vendors, suppliers, factories outside of China and service providers would be and are the first entities to make the decision to accumulate and stock up a surplus of supplies and parts. The second ones would be their direct clients and eventually their clients' clients. Because if the first tier of consumers had heard about a possible shortage of supplies , sooner or later, the following tiers would as well and act accordingly.

This side crisis shows just how much the modern world's economy has gotten so much dependent on technology and how much it has become so very depended on China. On the other hand, it also shows that at the end of the day, how much the individuals behind this economy care more of their health and livelihoods, than material and monetization.

The Positive Side:

Usually when one loses another one gains. In this case, it is clearly seems that the local online markets in China and door to door services have gained an advantage. Since people are not just unwilling but also are instructed by the authorities to stay indoors due to lock-downs, they turn to online shopping of whatever products that could be delivered to their doorsteps given the emerging crisis and local limitations.

Besides food for local consumption in China, the next most sought after products given the current situation, seems to be protective medical gear such as face masks, gloves and other sanitation products. These products are sought after not just in China, but throughout the world as well, mainly by people who travel overseas often, since they have the highest potential of getting infected by the Coronavirus and eventually becoming their home country's patient-zero upon their return. Nobody wants to be patient-zero, nobody wants to be a patient at all given the high mortality rate of the Coronavirus.

Another group that has gained the advantage in the tech arena would be whoever could deliver products to the end client faster than the Chinese Eco-system can, that is of course, as long as those products are the same ones or at the very least are at the same standard of the original products that were intended to be purchased. And as demand grows and supplies decline it would be inevitable for the prices of tech products to rise.

Final thoughts:

Even after the Coronavirus crisis is over and the threat is contained, the overall loses of the tech hub players in China would have to be dealt with and there's a good chance it would be at the expense of the end-consumer, Hence the fear of a tech recession. This might be avoided perhaps by manufacturers in China getting help from their government in order to prevent such a scenario.

As the tech dragon it is, China has grown into being a significant player in the global tech arena – and it cannot afford itself to loose that status. As the dragon aligns itself slowly and gradually with the world's largest economies, it would also have to align itself in other aspects as well if it would want to keep being amongst the top players. China cannot allow itself to have another outbreak like this in the future not just because of the cost of lives but also because of the credibility issues these crises create. As the old saying, with great power comes great responsibly.

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