Research Outline

Economic and Supply Chain Impact of Epidemics


Determine how epidemics and disastrous events such as the COVID-19 are impacting the economy and the supply chain globally. Determine also the steps that can be done to mitigate the impact. Obtain information also on how SARS, MERS, H1N1, and past flu epidemics impacted the global economy, the supply chain, and the logistics systems.

Early Findings

Economic Impact of Epidemics

  • Infectious disease occurrences are slowly but relentlessly rising. With this, their impact on the global economic order is also increasing.
  • As the whole world travel, trade, and communicate through a growing hyperlinked ecosystem, an increasing number of businesses will come to the realization that they will be impacted by diseases that originated from far-off territories.
  • One threat that they will be facing is the outbreak itself. The other is the fear induced by the disease.
  • An outbreak typically takes around 36 hours to move from a remote village to any major urban area in the world.
  • The corresponding economic or social disruption is expected to advance further and more rapidly.
  • The reality of a world that has "always-on news and fake news" will result in fear propagating more rapidly than any disease. Scares like this usually result in explosive policy reactions, massive change in consumer behavior, and wide apprehension among employees.
  • In the previous outbreak incidents caused by SARS, MERS, and Ebola, businesses were badly hit as people steered away from public establishments such as restaurants, stores, and movie houses.
  • Employees found it hard to commute to work as they are scared to take public transport. They also need to take care of their kids while the schools were closed.
  • Supply chains and basic services were interrupted as blockages and disruptions increase.
  • Companies found it hard to cope to ensure the continuity of their operations and to provide support to their customers.
  • These firms were ill-prepared as these extraordinary occurrences were not normally found in their disaster recovery playbook.
  • Recent studies on pandemics revealed that the potential economic impact of these infectious diseases is catastrophic and has the same magnitude as the yearly impact of climate change.
  • According to economists, the estimated yearly economic losses caused by outbreaks will be around 0.7% of the global GDP in the coming decades.
  • Based also on the flu outbreak data of the 20th century, the Commission on a Global Health Risk Framework for the Future assessed that the annualized impact is around $60 billion.
  • Other estimates that include the mortality aspect placed the annualized amount to around $570 billion. This figure is close to the $890 billion annual climate change monetary impact.
  • Including other diseases such as Ebola and Zika in the figure will definitely result in a higher estimate.

Coronavirus (COVID-19) Impact

Ebola Impact

  • The CDC referenced a World Bank estimate of around $2.2 billion in GDP losses due to Ebola in three African countries for just one year (2015).
  • The amount included the direct impact on population health and care services. There are also indirect components such as the effect on food supply and job security.
  • If these were taken into account, the total cost for the three countries will reach $53 billion.
  • These costs did not even include the cost of the efforts to revive the economy, whether successful or not.
  • In addition to these cost considerations, the costs of prevention and mitigation in neighboring countries, the modifications in travel behaviors, and other economic impacts also drove the cost up.
  • While a portion of these figures was shouldered by the countries, most of the Ebola pandemic impact was felt by private firms, their personnel, and their vendors in West Africa and other territories.

SARS Impact

Summary of Findings:

  • Our one hour of research provided some of the impacts of the COVID-19 outbreak on the supply chain.
  • We also provided some of the economic impacts of past pandemics such as Ebola, the flu outbreaks, and SARS.