The impact of crises on the global economy - Business Leader News

The impact of crises on the global economy

With Remembrance Day still in our minds and off the back of our article exploring whether businesses should give to the poppy appeal, here at Business Leader, we decided to ponder the impact another war would have upon business and industry across the world.

Would another World War really be the end of times? Whilst its near impossible to predict the intricacies that WWIII/WW3 would have on the world, we are able to study the consequences and impact of the previous wars and use this to draw conclusions on the business world.

What did wartime mean for the economy and what was spurred into action to drive change?

When the previous World War (WWII) ended, the global economy plummeted, and action was required on a global scale to recuperate from the losses. The economy plummeted, with inflation being at an all-time high from unpaid loans that funded the wartime effort. Combat had left much of Europe and Asia’s landscape in ruins, having permanently destroyed pivotal infrastructure and scorched the countryside.

Whilst everything appeared to be lost, this inevitably led to the beginning of global cooperation to ensure such an event wouldn’t take place again. This began with large superpowers promising to stop colonisation and the start of colonised land being returned to the countries from which the land had been taken.

More than that, however, it finally led to cooperation between nations – with what is now known as the European Union being formed in an attempt for businesses to work together across Europe. Instead of having an imbalance of power and resource, the idea was to pool together resources and let each nation capitalise on its strengths; all in a bid to quench the nationalist views at the time.

Were there any revolutionary introductions as a result of the wars?

If any good can come of war, it’s that it revolutionises how we as a race interact with the world, it changes perceptions on what was believed to be possible and remoulds and shapes a different future. The largest and most revolutionary change was definitively the advancement of technology.

The first man-made flight took place only ten years prior to WWI, and at the start of The Great War, British air services had just 272 machines, compared to the 22,000 aircraft available once the war ended in 1918. This increase in production benefitted the manufacturing industry to no end.

Other revolutionary advancements can be seen in the development of radar technology, which was in high demand to detect enemy planes and German U-boats during WW2. It also wasn’t uncommon for many planes to fly along railway lines to try and read city names, so the need for proper communications was important to help pilot’s navigate home.

For espionage and recon work, sound recording and photography were fundamental and had to be improved, and top researchers were constantly experimenting with ways to get an edge over the enemy.

Furthermore, medicine and science were revolutionised by different approaches of attack, and therefore, the relief of this attack. This is made evident by the invention of gas masks, which were pivotal in the aid of ground-to-ground combatants.

In addition to this, with war there comes casualties and prior to wartime, there wasn’t a drive to advance medicine. In 1950, William Murphy classified human blood into the now well-established groups of A, B, AB and O. Murphy also figured out how to stop blood clotting and create a supply for when the wounded needed urgent attention.

What would be the main difference for businesses if war was declared vs a global pandemic?

Without the wartime effort spurring on many medical advancements, we may not be as well-equipped as we are today. For example, during a pandemic, all non-essential businesses were closed down to use as little capacity as possible, so that more people could stay at home. This meant that success was selective as online retailers and home improvement businesses thrived, whilst other businesses, especially those in the hospitality sector, suffered.

Conversely, the aim of total war is to maximise and exploit all production capabilities and mobilise the entire workforce beyond what is considered feasible during peacetime.

Is the world equipped to handle anything similar with regards to businesses?

With regards to business, it is unknown whether the world has the possibility to handle another war. Some industries would thrive, such as manufacturing, for their contribution to the war effort, but others would see a rapid decline, such as major fashion brands, because there would likely no longer be a market for fast fashion.

On the other hand, World War III would be fought differently to previous wars, with a larger emphasis on the digital world. Infiltrating computer systems and acquiring information through digital sources would be comparable to the infantry of WWI and WWII, so the need for sophisticated security and defence mechanisms would need to be in place.

While we cannot be sure the exact path WWIII would take, we can be certain that skilled production would thrive and that a digital influence would be influential in the success of the war. Alongside this comes a degree of unpredictability, as seen from previous war efforts.

When pushed to the edge, creativity, ingenuity and the resilience of the human race is tested and can lead to advancements beyond comprehension.