Microtechnology industry does not expect long-term damage from corona crisis – but overall economy will be severely affected

20.03.2020

Representatives of the microtechnology industry at this point in time do not assume that the industry will suffer from the consequences of the coronavirus pandemic in the long term: 63 % currently do not expect any long-term effects that will have a lasting impact on the industry for several months or even years. This was the result of a quick poll conducted by the IVAM Microtechnology Network on March 19, 2020 among its members based in Germany.

Economic damage to microtechnology suppliers by Corona strongly depends on the user industry

Since a large proportion of microtechnology companies are suppliers and thus dependent on the business of the distributors, a possible decline in business strongly depends on the user industry. For example, the crises will affect suppliers to the automotive industry more severely than suppliers to the medical technology industry. Specialized or OEM suppliers could find themselves in a difficult situation, as they do not have much opportunity to take countermeasures. 

Coronavirus pandemic also creates opportunities for medical applications 

In the medical technology and healthcare industry, the coronavirus pandemic is even likely to open up opportunities for new applications using microtechnology. A clear majority of 90 % of the surveyed industry representatives and researchers assume so. 

In addition to miniaturized and mobile systems for rapid diagnostics, critical situations such as the current pandemic would require, for example, sensors for respirators or medical measurement technology. In some cases, components and systems are already available for such applications. 

According to the industry representatives, it is necessary to rethink global supply chains to ensure that opportunities for companies in medical technology can be fully exploited. 

Apart from market opportunities, the microtechnology experts are also considering the consequences for the healthcare system. For example, the pandemic makes it clear that there is a need to accelerate the expansion of telemedicine. They also hope that politicians will recognize the need to strengthen the healthcare system and act accordingly.

Global economy more severely affected by corona crisis than by the financial crisis

Although the participating IVAM members expect the corona crisis to have a relatively mild impact on their own industry, they believe that the impact on the global economy will be more serious than that of the economic crisis in 2008/2009 - 68% of those surveyed expect so. This is the probable outcome, because this time it is not primarily the financial sector that is affected, but the entire real economy. A tightening of protective measures, in particular a complete curfew, would further intensify the effects in the medium term.

Effectiveness of economic support programs not yet assessable

Are the economic support programs that the federal and state governments are establishing in order to support businesses in the coronavirus crisis sufficient? This will become evident only much later: 63 % of survey participants are uncertain whether the measures that have been announced or established so far are sufficient to avert massive economic damage from the coronavirus pandemic. This is very difficult to assess at this point in time, they say, and depends on the still unforeseeable extent of the damage and the duration of restrictions. Different sectors will also be affected to varying degrees, which makes it difficult to distribute funds according to need.

“The challenge for politicians is to distribute the aid to the right companies. It is to be expected that companies that were already affected before Corona will also receive aid. Overall, not only short-term growth but also the prosperity of society could be affected,” one respondent comments.

Protective measures against the spread of Covid-19 are appropriate 

The measures taken by the Federal Government against the spread of COVID-19 are appropriate and meet the need for protection of the population and the interests of the economy equally: 58 % of representatives of the microtechnology industry agree with this assumption. About a third (32 %) are rather unsure. These measures, they assume, can only be effective if the population consistently adheres to them. A lack of awareness in parts of society will probably lead to even stricter measures being taken. Anyway, some respondents would prefer a faster and more consistent implementation of protective measures. 

The IVAM Executive Panel is the mood indicator for the microtechnology industry. Experts and from industry and science give their opinion on a current topic from the fields of economy, politics or society. In order to collect these opinions, we conduct quick surveys among selected executives in mostly small and medium-sized enterprises and leading scientists in Germany and some neighboring countries.

Nineteen representatives of the microtechnology industry answered the survey regarding the coronavirus pandemic and its effects on March 19, 2020.