Yes, we all got that, the corona crisis will accelerate digitalization. We have heard this from all of the great visionaries of our time. One thing is clear: the spread of COVID-19 and government measures have turned previous life upside down and revealed where the break points are. Commerce, education, administration, the health sector, but also the normal office work – none of this was and is still not digitized as you would expect.
And with that, the corona crisis, which will result in a massive economic crisis, is an accelerator for digitalization. If investments can still be eased at all, then they will mainly flow into digitization – this is also shown in a new survey by management consultant EY among Austrian executives. Their number one lesson: the advancement of digitization projects.
If you use the time of crisis to start a new company or have to change your existing company, you have to consider the following trends:
1. EdTech becomes essential
The corona crisis is a wake-up call for the traditionally slow education sector. Teachers are still trying to figure out how the Zoom and Microsoft Teams work to be able to communicate with the students halfway. The Bulgarian system has shown that products of giants like Microsoft, Zoom and Google are the first tools to apply, but they have shortcomings and startups like Shkolo and Ucha.se are also becoming important stakeholders.
So this is definitely one domain where quick and decisive founders can get a lot of money from the authorities, schools and parents. By 2024, the market for “smart learning” is expected to more than double from $ 23 billion in 2019 to more than $ 56 billion – and corona will open the door wherever it has been slowed down so far.
2. HealthTech gets its big appearance
Actually, the innovation industry should have been ready to offer all the right digital products for everything – from tracking cases of infection to telemedical calls to rapid testing and development of vaccines. But it is not. Many things are now rather developed from scratch. Development and approval have been expensive and lengthy, and data protection has been a brake on health data in particular. That will change – investors already name the HealthTech sector as one of the most important future trends. And consumers and authorities will be able to be convinced much faster in the future to drive digitization in the sector.
3. Remote work becomes standard
Up until now, the home office was a goodie for key workers, to whom bosses wanted to write a special treat in the contract. That’s going to change. Wherever physical presence is not absolutely necessary, people will do part of their working time at their desk at home. This requires new things on both sides, for both employees and employers: employers have to provide the appropriate digital tools for this work and have the appropriate confidence in independent work, and employees have to deal intensively with the work-life balance.
4. Coworking spaces are becoming much more important
Point 3 results in point 4. Coworking spaces are currently empty as never before, but that will change again. If more and more companies rely on a mix of physical presence and home office, many bosses will soon question whether a permanent office is still needed. Flexible solutions will then be in even greater demand than before the crisis – an opportunity for coworking spaces of all kinds to offer these flexible working environments.
5. Faster, simpler eCommerce
It’s not a coincidence that during the biggest hackathon in Bulgaria – Hack the Crisis, many of the ideas were related to helping small stores to hop online as quickly as possible, startups in the domain like Cloudcart have also quickly started offering their services for free. This clearly shows where we are at the moment. Accordingly, the demand for online shop systems that everyone really understands will soon increase much more. The platforms – from Shopify to WooCommerce to Instagram shops – are there already – but everything that a small retailer needs (logistics, payment, delivery, stock status, etc.) and that is easy to use will be in great demand.
Facebook’s investment in India shows just how urgent the need is: $ 5.7 billion for ten percent of Jio Platforms. The aim is to bring 60 million micro, small and medium-sized businesses and 30 million small retailers online – with WhatsApp as a sales channel.
6. Efficient job placement
Biggest spike of unemployment since the Great Depression in the USA, record unemployment in Europe too, and so on and so on: In the future, job platforms will see the pressure to be able to place jobs doubling. This time the other way round: It will not be companies that advertise the vacancies and desperately look for skilled workers, but rather the many unemployed will fight for the vacancies that are still open. Or will they actually? According to Volen Valkov, the CEO of online resume generating startup Enhancv, there won’t be such a great pool of talent as we expect. But once more people and companies realize how much of the work could be done online, probably there will be a boom in freelancing and remote work platforms like Transformify, for example. In any case the digital tools that help people find jobs faster than others and also such that help companies identify better applications than competitors will be in demand. And companies need efficient tools to find the right talent in the army of applicants.
7. Good cybersecurity becomes mandatory
Cyber-attacks have increased worldwide with the massive change to the home office – remote working offers new areas of attack when data starts to flow between the home of the employees and the company clouds. The additional relocation of many other areas (trade, education, authorities, etc.) to the network requires digital security solutions that can be deployed quickly and do what they promise. This ranges from Ms. Protection in the new online shops to tap-proof conferencing tools – still not a matter of course today. The takeover of the cybersecurity company Nimbusec by KSV1870 is one of many clear indications of how urgent security solutions will be today and in the future.
8. Digital Entertainment
The preliminary winners of the crisis include not only Zoom and Slack, but also Netflix or Snapchat – because they can entertain digitally and worldwide. On a more local level, new streaming services like Fanstream – the platform for independent theater and movies, emerge and receive a warm welcome from audiences and creators. The retreat into your own four walls may not be as temporary as it may seem – it is quite possible that social distancing will become a kind of digital Biedermeier. The focus on private life in the small family will create a lot of time at home that needs to be filled. Streaming video anyway. But the big internet companies are already working intensively on the rollout of the next gaming and eSports platforms.
Yes, we have been talking about it for ten years. Yes and no. One should take a look at the fact that the Fortnite shooter now hosts virtual concerts by rap stars that are attended by millions of users.
9. Sustainable consumption
The corona crisis and lockdowns have brought many people back to the kitchen. Well, also to local production, which is the important point here. Startups like markta in Austria are currently going through the roof because they make urban (organic) food easily accessible to city dwellers. The constant reports that nature can finally breathe deeply again by dropping down entire continents will show many consumers that sustainable consumption makes sense. Anyone who has suitable and credible offers will find a lot of sales. But be careful: we are not talking about organic hipster premium superfood, but rather mass-market offers.
Sustainability, however, has more faces. Amid the crisis, new models – like the one of Olanga, helping restaurants sell the good food that is leftover at affordable prices, are also being started.
If the predictions turn out to be true, the corona crisis will depress the purchasing power of millions of people. That is why sustainability will also have to be affordable. Amazon can also send organic boxes.
10. More efficient eGovernment
Citizens onsides of the Atlantic can compose jingles about it: The performance of many eGovernment solutions is still far from where it could be. There is still a lot of room for improvement in the digitization of the authorities. Yet, the whole situation got things in the movement. For instance, the Bulgarian municipality accelerated the digitization work in some of its communication channels and launched several new digital services, planning to continue doing it at a faster pace. The government, which has been hesitant when it comes to digital services and allowing remote signing startup Evrotrust in the governmental game, is now also changing the attitude.
We may not like it, but it will happen anyway: Above all, authorities, but also many other large organizations will increasingly demand surveillance technologies. This ranges from temperature measurements at airports to access control in hospitals to checking whether people keep safe distances, exit restrictions or wear masks. It may be dystopian – but governments will want tech ready for possible upcoming pandemics and other threats to take quick action in an emergency. Thermo cams, drones, applications, there are many tools.
The Tony Blair Institute for Global Change (TBI) is already analyzing that government surveillance is a price to pay in crises like the current one (more on this at the BBC).
12. Desktop is not dead
Mobile, Mobile, Mobile has been preached to us in recent years. But where does the quarantined person consume his video streams, zoom conferences and online games? Correct: on a notebook, desktop computer or flat-screen TV. Zoom, which now has 300 million users, is a desktop first experience. One of the largest mobile apps has already admitted that it will not always be called “Mobile First”: Instagram is pulling more and more functions into its web version for desktop computers – most recently also live videos.
13. Digital money
Cash was not welcome in many countries even before the crisis. In the crisis, cashless payment has become the standard in many more shops. At the same time, banks’ projects to create state cryptocurrencies using blockchain did not fall asleep. A test program for a state digital currency started in South Korea in April. The example will create a handbook for countries to follow.
14. Financial literacy
Many many people who lose a lot of money in the crisis will think: How can I be one of the winners in the future? While you no longer get interest from banks for your savings, investments are becoming more and more interesting for the little man. In addition to cryptocurrencies, these are stocks, ETFs etc. In addition to robinhood, Bitpanda or Trade Republic, we are now also fighting for this new market in Europe, in which financial products are packaged in easy-to-understand apps. We even have a tetralogy series on the matter – crypto, real estate & proptech, peer 2 peer? Take a look for yourself.
Are there any other interesting trends you are observing? Let us know.
In the meantime, we are also planning to produce some content for people planning on giving in to entrepreneurship. Let us know in case you have particular questions and we can ask them for you.