by Hong Luo and Alberto Galasso Harvard Business School
The COVID-19 pandemic has profoundly influenced the lives of most people on the planet. It has changed daily activities; something as simple as a walk in the park is perceived very differently now. The same is true for businesses. Many businesses have shut down or changed to accommodate social distancing. New patterns of consumer and worker behavior and expectations have emerged during the first weeks of the crisis.
COVID-19 represents a tremendous economic shock and burden. In recent weeks, the focus has begun to shift towards ways to address its health and safety risks while also accommodating an appropriate level of economic activity. Businesses have historically overcome this type of challenge through the introduction of risk-mitigating technologies, which in this pandemic include technologies, business practices, and strategies that improve customer and employee safety by mitigating the risk of contagion. Other examples of this in the past have been less extreme, but include, for example, medical device advancement developed in response to a rise in consumer awareness of radiation risk.
We recently explored this example, which shares an underlying business response with the pandemic. An increase in risk perception makes consumers more willing to pay for safety features, which, in turn, provides producers greater incentives to develop and commercialize technologies that address consumers’ demands for safety.
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