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Why Zoom can't save the world

16 1 0
06.08.2020

By Ricardo Hausmann

CAMBRIDGE ― Before COVID-19, spending on business travel totaled $1.5 trillion a year (about 1.7% of world GDP). Now it is down to a trickle, as countries have closed their borders and social distancing has taken hold. Planes have been grounded, hotels are closed, and executives are not earning frequent flier miles. Many travel and hospitality jobs are feeling the consequences. But if this were all there was to it, the impact, however large, would probably be much smaller than the decline in general international tourism, and easily reversible once the pandemic ends.

Alas, recent research by Harvard's Frank Neffke, Michele Coscia of IT University in Copenhagen, and me, forthcoming in the peer-reviewed journal Nature Human Behavior, finds that the impact of closing down business travel may be much larger and more durable. To understand why, we first must ask ourselves why business travel was so big to begin with, and why it had been growing at three times the rate of global GDP, despite the availability of Skype, Facetime, WhatsApp, or just e-mail ― all tools that predate both COVID-19 and Zoom.

Was it all about perks, or was that $1.5 trillion mostly money well spent? If so, why, and what are the implications if those activities are now restricted?

Clearly, when we started this research, we could not have imagined such a complete shutdown of business travel. But our analysis does shed light on the possible consequences.

At the time, we were studying technological diffusion. Technology, we argue, is really three types of knowledge: embodied knowledge in tools; codified knowledge in codes, recipes, formulas, algorithms, and how-to-do manuals; and tacit knowledge in brains. Of the three, tools and codes are easy to move around, but........

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