Is the Coronavirus Pandemic Forcing Us to Take a Step Into the Future?
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Declared a global pandemic, coronavirus (COVID-19) is forcing governments and enterprises all over the world to rapidly put containment measures in place. China has been the most affected by the epidemic, however, due to strictly-enforced containment policies, on March 12, local authorities announced transmission rates had slowed considerably.
And while the human cost is undeniable, experts suggest that close cooperation between the private sector and the Chinese government has boosted the local technology industry in China.
An analysis by Yunqi Partners highlights a boom in demand for solutions related to virtual meetings, online education, digital healthcare, cybersecurity, and telecommunications, which have all assisted Chinese citizens impacted by containment policies.
With new solutions having been tested on a scale never previously seen before, experts predict that usage trends will remain high after the pandemic subsides. Here’s how a worldwide pandemic is forcing society to ‘crash test’ new technologies on scale, in three different verticals:
Schools Closed: Driving Investment in E-learning Technology
According to the United Nations, schools in over 13 countries have closed to contain the coronavirus. The disruption has directly impacted around 290 million students, a figure UNESCO claims is “without precedent”. In place of classes, e-learning has become the substitute channel for education.
Jin Chi, a professor at Beijing Normal University specializing in education and child development told Brookings Institution that amidst the coronavirus outbreak, “teachers have formed groups to learn best practices from each other, consult with technical staff, and master different kinds of online teaching platforms.”
Teachers are testing new ways to use online resources, and sharing best practises. This kind of research will no doubt lead to e-learning platforms being optimized, and perhaps eventually, moving towards being the primary mode of teaching -- especially for those outside of urban areas, part time students, or those want to study at an institution outside of their geographic location.
The pandemic has also motivated technology providers to adapt their business models. Century, an AI-driven learning platform, which typically costs thousands of pounds to use, made its service completely free amid the coronavirus outbreak. Now, 50+ schools in Asia are receiving training and access to the platform, at no cost.
And service providers are booming in the midst of scaled adoption. TAL Education, which partnered with 300+ Chinese schools to stream free classes, as well develop data tools to analyze student performance and support teachers has earned an extra $1.7 billion since the beginning of the crisis.
And as universities and further education institutions all over the world scramble to put together e-learning resources too, or risk losing a competitive advantage, there are plenty more opportunities to come for providers who can get their door in the door first.
Offices Shut: Crash-testing Remote Working on an Unseen Scale
With shared workspaces posing one of the largest risks of infection, remote working has been quickly-adopted across the world. Chenxi Wang, a managing partner at Rain Capital, told MarketWatch that large organizations like Google and Facebook found themselves better prepared to scale-up remote protocols as working outside of office has long been embedded in their team cultures.
However, scaled remote working has put a strain on enterprises which rely heavily on on-premise network security protocols. While day-to-day communication might be easy enough to move to the home environment, enterprises have realized that maintaining security protocols, on scale, from afar, poses huge challenges.
More than 400 million businesses and consumers worldwide use VPNs: secure web connections that protect information sent between employees and businesses, as well as encrypt data and scan to detect hacking threats. But the reality is, most VPNs are not designed for simultaneous use on a large scale. According to CNBC, this has led to widespread cases of system overloads and crashes.
Nonetheless, the situation has created opportunities for companies who were quick to react.
At the start of March, companies like JPMorgan Chase, Morningstar, and Arity began testing their systems by asking all employees to work from home one day. Following the test, JPMorgan Chase told team members in New York that 25 - 50 per cent of them should work from home full-time if possible. Similarly, ServerCentral Turing Group held a day where employees worked from home to test its systems. The company then sent out questionnaires for employee feedback on how the equipment performed.
Instead of relying entirely on third-party providers, cloud-computing company Nutanix, decided to create an intranet site for its employees, providing details about how to access its VPN, log into company-wide applications, and video conferencing tools.
The value of this type of resource is twofold: productivity is improved for current employees working from home, and a new resource is available to be included in the training of future employees.
Looking to the long-term, the economic effects of the current crisis will affect even the biggest companies. Enterprises are going to need to find ways to tighten their belts, and remote work policies could reduce costs, without the need for layoffs.
After all, a 2015 experiment conducted by Stanford professor, Nicholas Bloom, found that employees who worked from home were not only more productive than those in an office, but also took fewer sick days, shorter breaks, and less time off. Companies with remote workers equally saved $2,000 per employee on office space costs.
Paper Money Removed From Circulation: Accelerating Adoption of Cashless Payments
In light of the COVID-9 pandemic, the World Health Organization (WHO) is advising people to avoid using paper currency, and to use cashless payment to help contain the spread of infection.
In China, the central bank has removed cash in the hardest-hit areas. Money used in hospitals, markets, and public transport has been destroyed, while other areas have quarantined money in local banks, and are using high temperatures and ultraviolet lights for disinfection of banknotes. In total, as much as $1.1 billion worth of money was taken out of circulation in the Guangdong province over a mere 10 days.
In Europe, leading tourist attractions like the Louvre Museum in Paris are only accepting card payments, and more businesses are sure to follow as increasingly restrictive measures are rolled out.
Normally in the midst of a disaster like a hurricane, people are advised to withdraw money from ATMs as insurance should digital systems fail. The coronavirus seems to have turned this on its head.
But the reality is that society has been taking baby steps towards full adoption of digital payments for years. While shoppers utilized paper cash for 46 per cent of purchases under $20 in 2015, this dropped to just 37 per cent of similarly priced items in 2019, according to a study by Square.
After all, as cashless payments are being encouraged amid coronavirus, there are also long-term benefits to business owners. For example, increasing operating productivity, reducing waiting times for clients, and providing a safer work environment for employees.
Cashless payments leave less room for human error. In the retail sector, miscalculations and shoplifting account for 1.33 per cent of all sales, amounting to $46.8 billion in 2017. Not having to handle cash not only improves businesses’ margins, but lowers the risk of robberies too.
From a government perspective, there are many advantages of cashless transactions. They leave less room for tax evasion, laundering, theft and other illegal behaviours. They also remove the cost of printing money. The higher value a note is, the more it costs to print (e.g. a $5 bill costs 10.9 cents, whereas a $100 bill costs 12.3 cents). A cashless system removes these printing and distribution fees, while making transactions significantly safer, and more transparent.
With this in mind, despite recent bans of cashless businesses in New York, San Francisco, Philadelphia and New Jersey to avoid excluding ‘underbanked’ sections of society, health concerns will likely force these cities to join the cashless bandwagon.
Ultimately, it will also prompt governments to find ways to include ‘underbanked’ people in the new cashless system, and educate those on the fringes of society as to how to adopt the new technology.
While COVID-9 may have sped up acceleration, an independent report in the UK already predicted last year that cash use would cease entirely by 2026. While only 30 per cent of Americans reported having entirely abandoned using cash in a Pew Study report in 2018, if the majority of businesses follow the WHO recommendations to stop accepting cash this number is going to skyrocket.
One Step Back, Two Steps Forward
Now that we’ve come so far in implementing new ways of doing things, should we go back to our original ways after? Joe Chan, partner at Mindworks Ventures in Hong Kong, doesn’t think so. Speaking to Techcrunch, Chan noted that “people are reluctant to change once they form a new habit”.
The long-term effects of COVID-9 are yet to fully surface in society, as the virus continues to make its way across the globe. What is clear though, is that being unprepared for a crisis of this scale has forced private and public institutions to adopt quickly, using all available tools.
As restrictions have forced billions of people to develop new ways of learning, working, and spending, the coronavirus has inadvertently led to a ‘crash test’ of existing technology. While e-learning, teleconferencing, VPNs, and digital payments were all available before the outbreak, society needed an extreme circumstance to make the evolutionary leap for these tools to become the norm.