Any major event with substantial economic impact and unprecedented shifts in market expectations naturally accelerates change—but a “major event” may be an understatement when history looks back on the global COVID-19 pandemic that has gripped the U.S. and the world since early 2020. Not only is the pandemic causing serious health issues and dramatic loss of life, but its economic impact has been devastating for so many.
However, despite lockdowns, business closures, job losses, supply shortages and other events that directly impacted companies of every shape and size, there also came opportunities that are almost certain to remain a lasting part of the way things operate as we start to recover from the pandemic. Remote interaction (RI), artificial intelligence (AI), big data, a dramatic increase in e-commerce, a rise in entrepreneurial intensity, the re-analyzation of workplace culture—and even drones delivering to the front door—are just some of the things that are likely to be permanent in the new normal.
To get a greater picture of what to really expect, we asked the experts—members of the faculty from each of the nine undergraduate business majors at the Whitman School— to share their insights into the future of the post-pandemic business landscape.
The pandemic has caused great pain for industries like hospitality, retail and office real estate, but it has also seen people’s savings hit record highs, while mortgage rates remain at all-time lows. Significant private equity capital is waiting on the sidelines to be deployed, according to Associate Professor of Finance Milena Petrova, who teaches in the real estate program.
Petrova doesn’t expect to see large commercial market price declines, but, more likely, an evolution happening over time. She notes that, because commercial real estate leases usually have terms of five years or longer, and there will likely be a reduced demand for construction, commercial real estate will be in short supply post-pandemic. This will result in a softer impact on rents and prices, she says, noting that rent collections—both office and retail—have already stabilized to a healthy rate.
“When it comes to residential real estate, working from home has led to weaker demand for housing closer to central business districts, while also contributing to a higher demand and consequential growth of residential prices for suburban housing,” Petrova says.
The pandemic revealed new opportunities in real estate. The tremendous growth in e-commerce has boosted demand for warehouses and industrial space, while the increased reliance on cloud computing and digital communication has led to a growing demand for data centers and digital properties. These areas will continue to enjoy a strong demand and increasing prices after the pandemic has ended.
While the history books are not quite yet closed on the pandemic, there are many glimmers of hope and the certainty of change on the horizon. Those who intend to succeed in a post-COVID-19 business landscape will need to plan, adapt, accept and learn from both the painful and the productive lessons they’ve witnessed—all while being open to innovation, entrepreneurial intensity, data-driven decisions and the resiliency needed to continue to thrive.