Covid-19 is the biggest driver of digital transformation yet

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Ikhlaq Sidhu | Voices, India, Times of India | May 7, 2020

Dr Ikhlaq Sidhu, Chief scientist, UC Berkeley Sutardja Center and Curriculum Chair, Plaksha University.

Since January of 2020, the world has been watching the unfolding of the Covid-19 pandemic. The infection has now reached just about every community on the planet leading to a current state of health crisis and economic uncertainty.

Most of us have felt a strong sense of disruption in our work and social lives. The world is collectively trying to understand what happens next. The fact is that due to the disruption caused by Covid-19 we have already experienced more digital transformation in the last 1 month than we have seen in the last 20 years. While, many workers and businesses are suffering from closures and quarantines, other areas of our economy are actually innovating and/or growing. These areas include telecom, Internet, supply chains, pharmaceuticals, and healthcare to name a few.

To fully understand what is happening, we must realize that these changes will be driven by new mindsets and behaviors that our society is now starting to adopt.

We are already seeing glimpses of it. Our activities such as video conferencing and ordering food over the internet are actually more efficient than we ever experienced before. Many of these positively adapted new solutions will continue to exist even after the crisis is over. Like hygiene ratings on food delivery apps and acceptance of social distancing techniques. In the future, instead of asking “why meet over video?”, people may ask, “why do we need to meet in person?”

And for the things that do not go well during this crisis, we will permanently change our behaviors to avoid these pains in future. For example, individuals who lived through the Great Depression of the early 1900s became more careful with money through the rest of their lives.

The mindset change could be “We are in a war with disease because it has done more damage than competing countries” or “We see an emergence of a ‘work at home economy”. Scientists and experts will be placed on a higher pedestal than they are currently and the government will be expected to invest and develop infrastructure and science that cares for the population. The changing mindsets could also shift the perspectives on social media. While it would remain valuable, there will be a social and political emphasis on policies that eliminate unverified information.

The Roadmap to What Comes Next:

When will all these changes happen? The answer is that it will be in stages. First stage is our present-day situation, which is a breakdown of infrastructure and societal functions. The second stage, which we are approaching, is stabilization our most critical functions such as supply chains, basic services, and money flow.

The third stage which is longer lasting, will begin likely in 2021. We will see a desire to correct and improve the world with new policies and new solutions for a better world.

Regardless of when the ‘Corrections’ phase begins, we foresee the following effects in work, life, and society- continued growth acceleration in telecom, internet and video conferencing, investment to redesign supply chains for resilience and global/local balance, restructuring of the healthcare system to handle infectious disease. Policies, processes, and technologies will be put in place to reduce or at least mark unverified, fake information on the Internet.

The requests for government to orchestrate research and new programs in areas for public health and safety that would otherwise not be profitable for corporations, will increase. Research in personalized medicine may play an even bigger role due to the memory of the Covid-19 pandemic. The Covid-19 virus affected people in very different ways. Many are even asymptomatic while others cannot survive. This will be a strong case for developing medicines based on person specific factors like genetics.

It will create opportunities for new ventures that support social distance and health safeguards. There may be a renewed focus on self-sufficiency and living off the grid.

This is period could boost the needs for virtual reality and digital transformation. While Internet infrastructure will continue to grow, there will be greater needs for greater non-verbal communication over digital channels.

Data, AI, and Technology Still have a Key Role:

Given the changes in mindset and behavior that are currently underway, we can already see a new world forming. One thing that we have already witnessed is a tremendous widening of digital divide. Any firm or organization that is part of the digital world is actually more critical than ever before. In this situation, if pressed, most consumers will keep paying for Internet service before they pay for a car. People are working and traveling not by roads but whenever possible over digital highways. And firms that do not have transform digitally, will remain paralyzed.

The core technology, data, AI, and IT systems are not going anywhere, but instead they will be growing, adapting, and becoming more essential than ever before. Whether you are an investor, professional, or student, it will be critical to understand what’s next and where the opportunities will be in the world post 2020. These are just are just a few signals that we have already seen through our collaboration with UC Berkeley and Plaksha University in India:

The new telecom and IT infrastructure: Our ability to function without the internet is quickly approaching zero. Never before have we been so limited to communicating digitally, ordering online, working from home, and relying on internet-enabled entertainment. Telecom, internet providers, and applications will have greater value to their customers than ever before. At the same time, their core services will need to adapt and innovate for reliability, performance, and customer service.

2. Cyber-security and physical security: Systems that created safety and security, whether in the digital world or physical world. The new digital world in particular has never been this critical. Zoom video conferencing has recently increased its call volume from 10 million per day to 200 million per day in the 4 months from December 2019 to March 2020. Zoom has also serious gaps in security. Cybersecurity and personal safety will become a primary driver for consumers, businesses, and government spending.

3. Automation Everywhere: This particularly includes healthcare platforms and algorithms to track social contact, inform people before they get sick, and let healthcare and governments know when infections are starting to spread. More generally, the demand for automation through robotic, drone-based, and remote-control applications will also see growth. To add one more technology in the mix, consider AR/VR, which will also have a greater impact on remote work, entertainment, and services than we could have guessed before Covid-19.

4. Supply Chain: We have also never experienced a time when supply chains have been as critical as they are today. The pandemic has shown us that they are still vulnerable to shortages, hoarding, worker safety issues, and global politics. The supply chain is an inherently technology-based system and we can expect a lot of innovation in this area as well.

5. No-touch technologies: These will allow people to pick up fewer illnesses by touching fewer items. Examples include payments without signing, eliminations of door handles, touch-less faucets, and more. Gone are the days when people will want to hold a shared pen at the bank teller. Every service business will want to offer this capability to their customers as a premium service.

In summary, our mindset and behaviors have already started to change. Clearly, the world will never be the same because there will be long-lasting effects. After we stabilize basic services, we will likely change our targets for innovation and policy. From this logic, we can see that the world’s requirement for digital technology and digital transformation is only accelerating.

This article was first published in Voices, India, Times of India on May 7, 2020.

Dr. Ikhlaq Sidhu

Dr. Ikhlaq Sidhu