So much has happened to the world’s economy within a few years. The year 2020 would always be remembered for the pandemic that put the world’s economy on hold. Many economies, especially developing economies, are still recovering. Russia’s invasion of Ukraine is also disrupting the global supply chain and hindering economic growth. According to the IMF, the feud has triggered global inflation.
Additionally, major economic powerhouses – the United States, China and major European economies are experiencing a setback. The world is experiencing a global recession, and by the IMF and the World Bank’s standards, this means the average global citizen has experienced a drop in real income in a year.
While periods of recession pose difficult times for countries, they also create an avenue for innovation and technological advancements. Necessity is the mother of invention; people often get innovative about how to keep their heads above water during difficult times. History has shown that recessions were a form of launchpad for some of the biggest companies we have today. Here is a list of five companies that started operations during global recessions.
In 1973, an oil crisis with a stock market crash led to a 16-month recession that made the US GDP take its worst hit in nearly 20 years. The Organization of the Petroleum Exporting Countries had put an embargo on countries that supported Israel’s military, including the US. Consequently, oil prices skyrocketed, and the stock market crashed. The GDP declined by 3.4 per cent, and unemployment rose to 9 per cent.
However, this did not hinder Bill Gates and Paul Allen from conceiving the idea for an innovation that impacted the world – Microsoft. Microsoft launched on April 4, 1975, offering a disruptive way to eliminate some of the highest boundaries for businesses to leverage technology in that era.
Microsoft has now become a multinational technology corporation that produces computer software, consumer electronics, personal computers, and related services.
Between 2007 and 2009, there was a sharp decline in economic activity in the US, which the world called the Great Recession. The economic downturn began when the US housing market and large amounts of mortgage-backed securities (MBS) and derivatives lost significant value.
The Great Recession saw the creation of Airbnb in 2007. Roommates Brian Chesky and Joe Gebbia had decided to rent out an air mattress in their San Francisco living room. They created a website and bought air mattresses, and decided to form a full-scale business around the concept. In 2009, they received funding from top-tier VCs and experienced exponential growth.
The online marketplace Airbnb, initially called Airbedandbreakfast defied investors’ expectations and revolutionized the travel lodging industry by enabling people to convert their unused bedrooms into temporary bed and breakfast housing. What started in a room in San Francisco has expanded into a successful global business.
Uber, the popular ride-hailing company, is also a product of the 2007 – 2009 Great Recession. During this time, the US GDP fell by 4.3 per cent and unemployment reached 10 per cent. Travis Kalanick and Garrett Camp conceived the idea for the revolutionary company because they could not find a ride in Paris, France.
The ride-hailing company has expanded its service portfolio to include ride-sharing, food delivery, and a micro-mobility system (electric bikes and scooters). Uber revolutionized the global taxi industry, and as of 2021, it was operational in approximately 72 countries and 10,500 cities.
In the fourth quarter of 2021, Uber had 118 million monthly active users worldwide and generated an average of 19 million trips daily. In the United States, as of January 2022, Uber had a 71 per cent market share for ride-sharing and a 27 per cent market share for food delivery.
The recession of 1937–1938 is one of the critical recessions of the 20th century. It occurred during the recovery from the Great Depression, while the world was on the verge of World War II.
During this time, two Stanford graduates, William Hewlett and David Packard established Hewlett-Packard – HP. The company, founded in a one-car garage, initially produced a line of electronic test and measurement equipment. Their first product was an audio oscillator bought by Walt Disney, one of their first customers.
Hewlett-Packard launched January 1, 1939, and so far has become one of the world’s computer powerhouses. The company is tagged the symbolic founder of Silicon Valley – a region that serves as a global centre for high technology and innovation.
In 1929, The Great Depression, a severe worldwide economic depression began after a fall in stock prices in the United States. The economic shock was transmitted globally, impacting countries to varying degrees.
At the height of The Great Depression, brothers Walt and Roy Disney rebranded their garage-based cartoon studio under the name Walt Disney Productions. The duo introduced the world to Mickey Mouse via their short-animated feature Steamboat Willie during this time, when Americans needed a smile more than ever. Disney survived the challenges of the depression and has become a household entertainment name globally.
From humble beginnings as a cartoon studio in the 1920s to its pre-eminent name in the entertainment industry today, Disney proudly continues its legacy of creating world-class stories and experiences for families globally.