It's impossible to go a few days without reading a story of a local businesses in the US closing as a result of COVID.
I left San Francisco in June 2020, but already by that point (3.5 months into the lockdown), many of the local businesses in my popular neighborhood had closed down temporarily or permanently. The SF Chronicle has been tracking SF-business permanent closures and updates at this link regularly.
This is not just impacting American cities like San Francisco. I also saw a video from Vice, documenting how Seoul's popular Itaewon neighborhood has been crippled by COVID.
A few thoughts that come to mind:
- Large businesses will use this time to grow their market position. While the local coffee shop, restaurant, and bar may be put out of business permanently, large busineses that have the support of a patient shareholder base, large capital reserves, or have invested in digital initiatives will come out of COVID strong than ever. One
- Amazon feel more important than ever to everyday Americans who need goods, but don't want to leave their homes. AWS is pulling forward years of business by large organizations that feel the need to "move to the cloud"
- At least looking at San Francisco, governments have not been kind to local business owners during COVID. I feel bad for business owners operating in cities (e.g., San Francisco) where there governments have given them little guidance as to when they will be allowed to reopen, support outdoor seating, etc. As an individual, it feels tough to plan months ahead in my own life as a result of COVID, I can't imagine the difficult that business owners who have their entire life invested in a business are coping.
- Not to make this overly political, but at least in the US, most of the pressure for an extended lockdown has come from "the left". Cities run by democratic mayors are playing directly into the hands of big business by not giving sound guidance and support to small businesses that are being forced to close as a result
- I would not be surprised if the rate of people starting small and medium businesses decreased as a result of COVID. One contributing factor is that the fear of starting a business having seen the impact COVID brought. Small business (e.g., local coffee shop) have always been tricky from a financial perspective and COVID has illuminated how weak the financial foundations of some of these businesses are.