As technology and economic growth become increasingly linked, not investing in digital capabilities is now a significant risk.
While digital innovation and transformation have been underway for decades, the volume and speed of recent technological advances is accelerating transformation across all aspects of society, with significant impact on economic sustainability. Looking at the disruptive impact of the COVID-19 pandemic, it's clear that many of the trends that came into play as a result, have the potential to permanently alter the global business and economic landscape.
As technology and economic growth become increasingly linked, it's critical that technology investments generate revenues, drive productivity and reduce cost. This imperative is heavily influencing investments across the spectrum of consumer services, business services, infrastructure, logistics, healthcare, financial services, and other sectors. Economists commonly refer to the concept of creative destruction; wherein, with each recession, those parts of the economy that break down are replaced with new innovations that move the economy forward. In the case of COVID-19, creative destruction is in the spotlight. The profound changes we are seeing as a result of this disruption will likely impact the way we work, play, learn and interact well into the future.
In the early days of technology evolution, developers focused on task implementation: word processing, data manipulation in spreadsheets, data transmission, etc. New functionalities were born and the technologies permeated homes, businesses and institutions, but for a long time, the amount of true innovation was limited. Cyclical forces such as the employment rate and capital spending influenced the ebb and flow of spending on new technologies, considered a risk within the broader economic context.
However, with more recent advances in digital capabilities, including web-based software, powerful smartphones, artificial intelligence, Big Data, 5G and streaming, technology adoption has become pervasive and productivity enhancements are quite significant – making technology a secular growth trend.
Now, not investing in digital capabilities is a significant risk.
Innovation, Growth and Disruption – Five Key themes
The companies that will succeed in this environment can span sectors, industries and product groups across the economic landscape. Some will create structural growth by delivering innovative products and services that utilize digital technologies. Others will develop disruptive technologies that upend how long-established businesses provide services to their markets. Still others will deliver solutions that anticipate and address shifting consumer and corporate demand as individual and company behaviors evolve.
What unifies the opportunity for all of them is a set of drivers that will shape how they respond to digital innovation.
- Digital Consumer – Consumer expectations and consumer behavior have shifted dramatically as all aspects of our lives can be captured, organized and facilitated via digital technologies. eCommerce, Social Media, Advertising and Streaming are just some of the examples of how the landscape has been disrupted, forever altering how people access and interact with information and content, and how those who are sharing information are taking feedback on that content.
- Digital Services – More and more companies and institutions are using technologies such as cloud computing, SAAS, Artificial Intelligence, Big Data and Remote Access/Remote Working to drive productivity during an incredibly challenging time. Whether you are a provider or a user of services, the services of today and the future look quite different from how they looked a decade ago.
- Infrastructure – infrastructure lies at the center of the digital eco-system as the speed and volume of activities accelerate. Semiconductors, Handsets, 5G, Data Centers, Towers, reliable power generation, etc. all play a crucial role in support of consumer and corporate demands.
- Fintech – Electronic and Contact-less payment activity has been growing for many years and the COVID-19 pandemic has re-accelerated a focus on the cash-less society. Advances in algorithms and AI are leading to new products for mortgage origination, insurance, security trading and investment advice. As financial services firms seek to offer services to younger members of society (Millennials), the mechanisms and the safety of the delivery of services must evolve to meet their demands.
- Healthcare – the medical field certainly came into the spotlight as a result of the COVID-19 pandemic, and continues to transition toward greater utilization of digital technologies in the fields of tele-medicine and medical records, diagnostics and testing, genetics, robotic surgical procedures, and research data.