What Tech Leaders Should Know About The Economic Outlook

Traditional economic data isn’t updated often enough to keep up with the impact of the COVID-19 pandemic. Here’s an article on Protocol that says what tech leaders should know about the economic outlook, according to economists and data analysis startups.

Novel data for the economic downturn

Since firms tend to shy away from spinning their nowcasts into takeaways (leaving that to their clients), Protocol also enlisted economists to help analyze the data and compare findings with traditional models.

Here’s what may be in store for tech over the coming months.

Top-level takeaways

A key reason for a more rapid decline in the unemployment rate from the near-term peak is the unprecedented size and speed of the fiscal and monetary response to this adverse shock, which contains measures aimed at maintaining payrolls.

What tech leaders should know

For one, expect less pricing power and lower margins. With the businesses shuttering across the country and high unemployment numbers, consumers by and large will have less to spend with. This could lead to supply surpluses, and in the world of tech, electronics manufacturers, in particular, will need to cut down on production

Conflicting recovery forecasts

Predictions of what recovery will look like are akin to trying to predict snowstorms in the summer. Gro Intelligence CEO Sara Menker told Protocol that the U.S. could see a V-shaped recovery, similar to China’s, but that’s more likely the sooner recovery begins. Menker does concede that the two countries’ substantially different strategies addressing the pandemic make it difficult to know when we’ll be on the up-and-up again.