Illustration: Eniola Odetunde/Axios

The coronavirus pandemic has changed the game for U.S. businesses, pushing forward years-long shifts in workplaces, technology and buying habits and forcing small businesses to fight just to survive.

Why it matters: These changes are providing an almost insurmountable advantage to big companies, which are positioned to come out of the recession stronger and with greater market share than ever.

What we're hearing: "There is no doubt that the longer this pandemic pulverizes this economy the main victims will be small and midsized companies," Bernard Baumohl, chief economist at The Economic Outlook Group, tells Axios.

  • "We’re seeing the whole business landscape dramatically undergo massive changes and one part of this is how large companies with resources will take advantage of the troubles, travails and financial problems small companies have."

What to watch: Big companies, which have benefited far more from Congress and the Federal Reserve's coronavirus relief efforts, are expected to buy out or simply wait out smaller competitors.

The backstory: The Fed has provided nearly $3 trillion in liquidity since March to reopen credit and financial markets, and corporate titans like Apple, Exxon Mobil and United Airlines have taken advantage, borrowing a record amount of money at rock bottom rates.

  • The lone lifeline for small businesses has been the Payroll Protection Program, which economists have found to be inefficient, ineffective and insufficient, largely excluding the businesses most in need of assistance.
  • In particular, businesses with Black, women, and immigrant owners have disproportionately been shuttered because of the virus.

By the numbers: A recent survey by the National Federation of Independent Business found that 22% of PPP recipients anticipate having to lay off at least one employee or have already.

  • In a separate survey, 23% of small businesses told NFIB they would be able to operate under current economic conditions for no more than six months. Another 21% said no more than a year.
  • "It’s a bleak picture," Holly Wade, NFIB's director of research and policy analysis, tells Axios. "It’s terrible."

A recent survey of U.S. chief financial officers found the difference in outlooks between small and large firms over the next 12 months "is extreme."

  • Expectations at small businesses "have essentially collapsed," says Keith Parker, global equity strategist at UBS Research.
  • Conversely, more than 60% of large firms with sales over $2 billion expect sales growth to accelerate — 49% expect a "significant pickup."

The big picture: The pandemic has ushered in an evolution in business akin to the development of the internal combustion engine or the dot-com bubble crash that accelerated globalization and second generation internet companies, Mohamed Kande, U.S. and global advisory leader at PwC, tells Axios.

  • U.S. companies are making major investments in supply chain relocations out of Asia and closer to home, as well as artificial intelligence and robotics and re-skilling workforces to operate remotely and autonomously.

The bottom line: "That will be a tough environment" for small business, Kande says.

  • "What happens when you have changes like that is you start to see a wave of consolidation. It’s hard for small companies to survive because they don’t have the balance sheets, they don’t have the capital to sustain a crisis for a long time."

Go deeper

Updated Sep 22, 2020 - Axios Events

Watch: How cities are preparing for an increasingly digital economy

On Tuesday, September 22 Axios' Erica Pandey hosted an event on how cities are building stronger, more efficient operations to support an increasingly digital economy, featuring Dunkin' Brands CFO Kate Jaspon and FCC Commissioner Jessica Rosenworcel.

Kate Jaspon discussed trends in Dunkin' Brands' customer digital transactions and how they're promoting their brand across younger social media platforms like TikTok.

  • How coronavirus has accelerated the move towards a contactless food experience: "We're seeing a lot of guests shift away from cash and actually move to these contactless payments."
  • On the company’s successful partnership with TikTok star Charli D’Amelio: "We've seen a significant number of app downloads and perk memberships come from her demographic and her following, as well as an increase in our cold brew sales since we launched."

Jessica Rosenworcel unpacked the future of smart cities, how new technology can be better integrated into public spaces, and the need for the federal government to better collaborate with city mayors.

  • On cities being able to predict things like fires, safety hazards: "Wouldn’t it be fantastic if we knew those kinds of things well in advance, if we had a predictive ability that exceeds what we have today because we are looking at patterns at a scale that previously we haven’t been able to do? I think that those things are real and they are not so in the far-off future."
  • On partnerships between the federal and local governments: "We've got to figure out how to be partners with mayors and town councils...I think right now they see federal authorities as someone who wants to take their power away and prevent them from having a say and where communications infrastructure goes on their streets in their backyards."

Axios co-founder and CEO Jim VandeHei hosted a View from the Top segment with Visa Chief Product Officer Jack Forestell who discussed changes in digital commerce and what this means for the economy.

  • On digital shopping experiences being the new norm for small businesses: "What we have seen with the pandemic is a sharp uptick in digital commerce...But what we're seeing now is that the new set of digital commerce behaviors is really sticking. The implication is that small businesses, Main Street businesses, really need to get digital."

Thank you Visa for sponsoring this event.

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 32,471,119 — Total deaths: 987,593 — Total recoveries: 22,374,557Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 7,032,524 — Total deaths: 203,657 — Total recoveries: 2,727,335 — Total tests: 99,483,712Map.
  3. States: "We’re not closing anything going forward": Florida fully lifts COVID restaurant restrictions — Virginia Gov. Ralph Northam tests positive for coronavirus.
  4. Health: Young people accounted for 20% of cases this summer.
  5. Business: Coronavirus has made airports happier places The expiration of Pandemic Unemployment Assistance looms.
  6. Education: Where bringing students back to school is most risky.
Mike Allen, author of AM
4 hours ago - Politics & Policy

Biden pushes unity message in new TV wave

A fresh Joe Biden ad, "New Start," signals an effort by his campaign to make unity a central theme, underscoring a new passage in his stump speech that says he won't be a president just for Democrats but for all Americans.

What he's saying: The ad — which began Friday night, and is a follow-up to "Fresh Start" — draws from a Biden speech earlier in the week in Manitowoc, Wisconsin:

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