The companies and employees at ground zero of the COVID-19 outbreak provide insight into what works in a time of crisis — and what doesn’t.
Scientists have long warned that emerging infectious diseases represent a new reality with the potential to cause untold human suffering and economic disaster. While the financial damage of the COVID-19 epidemic — first reported from Wuhan, China, on Dec. 31, 2019 ― has so far largely been confined to China, organizations around the world are directly and indirectly affected by what is fast becoming a global crisis.
Managers lack clear guidance on how to ready their organizations for a global pandemic event. The World Health Organization (WHO) tracked 1,438 epidemics between 2011 and 2018 and notes, “In addition to loss of life, epidemics and pandemics devastate economies.” Many of the outbreaks in this period, including Ebola and MERS, were able to be contained geographically. But the conflux of hyperurbanization and global warming makes pandemics and other ecological dangers more likely to spread over a larger area — and a very real threat to the world’s economies.
We’ve been taking a close look at the effects on Chinese companies and workers of the government quarantines that began being imposed in January. The responses of these two sets of stakeholders at the front lines of managing this crisis offer important lessons for organizational leaders in other locales. Current projections suggest that it’s only a matter of time before most organizations are facing similar challenges.
The Impact on China’s Economy and Global Trade
Our first task was to find out how much the virus, and the resultant quarantines, have been affecting Chinese business. Our research initiative at the Global Center for Entrepreneurship and Innovation at the University of St. Gallen, in Switzerland, collects and examines remote sensing data, such as satellite data and digital trace data. We are using this tool to shed light on how COVID-19 has been affecting the Chinese and global economies.
Our team has been analyzing daily satellite data from the European Space Agency’s (ESA) Tropospheric Monitoring Instrument about air pollution emissions to quantify the regional and local impact of the COVID-19 outbreak and government-imposed quarantines on the Chinese economy. Changes in the quantity of pollutants, such as nitrogen dioxide, are useful for identifying daily changes in emissions-heavy industries, such as manufacturing, because of their short lifespan in the troposphere. Emissions data has long been used as a proxy for quantifying shifts in certain types of economic activity. Simply put, a drop in air pollution indicates a drop in manufacturing.
The emissions data shows the severe hit that China’s manufacturing sector took in January and February. (See “Air Pollution Reduction Shows Where Chinese Manufacturing Slowed.”) Our data shows that nitrogen dioxide emissions in China fell by 38% between Jan. 24, the start of the government-imposed quarantines in Hubei Province, and Feb. 21, the targeted “back-to-work” date in many Chinese provinces