The stock markets are the first thing to come to mind for many Americans when hearing the word “volatility.” When the market has seen striking gains and painstaking dips within the past few years, it is not difficult to decipher the reason. Global markets are trading in a fluctuating manner, industries are seeing surges of squeezes and tight spots, and business productivity is operating at a disappointing level. It is indisputable that small businesses are always the first to come during periods of growth and the first to go during recessions. No matter how much public support or external assistance they receive, smaller businesses have neither the sizable cash flows nor the established customer base larger companies have. The proportionate trend of business size and survivability is inherent in all major industries in every corner of the globe and during any era. Although the term “small business” refers more to corporate size rather than industry, for the purposes of this article, we will consider it as its separate industrial sector. Following predicted devastating losses in the upcoming economic slowdown, the next major financial loss will likely be in the technology industry.
As advanced as modern technology appears, it still is primarily a luxury rather than a necessity and has yet to develop into a crucial cornerstone of daily life. Major industries such as retail, insurance, automobiles, health care, and many others have evolved to the point in which the products produced and sold, or lack thereof would play an extremely impactful role in each individual’s daily life. For instance, insurance companies as a whole will likely never run out of customers due to the fact that demand for insurance(whether health, auto, home, or life) is nearly universal in modern society. Compared to the aforementioned industries, technology does not have nearly the same amount of grip on its customer base to power through a recession. In other words, regardless of how an individual’s financial situation is, they will likely still keep their money in a bank(financial industry), drive a car(automobile industry), and eat food(agriculture industry). The same cannot be said about the technology industry. For information-based companies such as Alphabet(the parent company of Google), tighter economic situations will often result in a decline in adherence to advertisements. For technology retail companies such as Apple, customers may not find the means to purchase the next iPhone. Details like these will render the entire industry unstable.
The only factor more detrimental than poor fiscal situations is declining culture. Numerous studies have demonstrated unsurprisingly that households across the United States have seen a decline in technology ownership and usage. Direct impacts of the gradual finish of the coronavirus pandemic can be felt directly in companies such as Zoom and Netflix(this issue is a little more complicated and may be explored in a later article), and trickle across to other sub-sectors and companies as well. For example, a decline in online meetings will decrease the demand for computers, a decrease in streaming usage will undoubtedly affect television sales, etc.
The negative culture and poor global financial situation are poised to plunge the technology industry into a deep decline, the worst since the end of the dot-com bubble. However, this time, many larger companies may be gone for good. Hints of impending doom are already being felt in many companies. Google announced the first major layoffs for employees in company history while Apple promised large increases in salaries for all employees soon. Twitter and Microsoft may soon be the subject of legal scrutiny while Netflix and Tesla have become household laughingstock across the nation. The situation is looking very grim as such unprecedented events unfold. Perhaps the world would fair better in technology’s absence.