How COVID-19 accelerated technological innovation

17 November 2020 | Blog Post

In the second part of a series on the impact of COVID-19, we look at how the pandemic has accelerated technological innovation across multiple sectors. Read Part One of the series here.


Click and Deliver

As the pandemic spread across the globe, many Western economies were forced to impose national lockdown in order to contain the virus. Consequently, all our working and social lives moved to online channels.

With many shops closed, online shopping experienced a huge surge as consumers flocked to online platforms such as Amazon to buy products. According to The Guardian, shoppers on Amazon were spending £9,000 a second during lockdown.

Meanwhile, the British high street suffered a huge decline, accelerated an ongoing demise that was starting pre-COVID, with many well-known brands such as HMV, WH Smith and Marks & Spencer all suffering huge profit losses.

Despite the initial slump experienced by many companies, some of the world’s best-known brands such as Procter & Gamble experienced their best strong quarter results in years. P&G produces brands such as Tide that have become part of what retail experts call a “pantry inventory” of items such as hand sanitiser, detergent and toilet paper, that homes are keeping stocked up in case of another lockdown.

The rise in this type of buying and a reduction in non-essential purchases will be a legacy of the pandemic, argues Jon Moeller, P&G Chief Financial Officer. “It’s hard for us to see in our interactions with consumers that we’re going to snap back and revert to the same attitudes and the same behaviour that we had collectively pre-COVID”.  

A legacy that will extend well beyond COVID-19 will be the widespread adoption of technology ranging from contactless payment to Zoom teleconferencing. Many experts say that habits in technology are “sticky”, meaning that once they are embedded in our everyday lives, they are hard to remove.

 

Beware the GAFAM Monster!

In a sign of the changing times, analysis conducted by Statista showed that during lockdown, the most searched brands on Google in the United Kingdom were Google with 80% followed by Amazon (71%), eBay (50%), Argos (43%) and Tesco (28%).

With national economies and leading companies suffering profit losses due to a loss of sales, the pandemic has given a huge boost to the so-called GAFAM (Google, Amazon, Facebook, Apple and Microsoft) companies.

All of the companies have posted double-digit revenues profits so far this year, with Amazon boasting a 35% revenue increase and Facebook posting a 17% increase according to Statista; a rise in revenue that added an estimated $29.9 billion to Jeff Bezos’ personal wealth.

Those with a good memory will remember that the initial fears of COVID-19 at the beginning of the year saw GAFAM shed $237 billion of their market capitalisation in February 2020, as their share price dropped by 4 percent.

Over the past few decades, the leading companies of the day - those that provided the greatest utility – were the likes of Exxon Mobil and BP, with oil and gas being the key drivers of the global economy. Yet, in the COVID-19 era, the major artery of the economy is technology, with the likes of Google and Amazon becoming the new barons of global commerce and trade. GAFAM is on the rise as BAU becomes WFH!  (Define BAU and WFH)

 

Electrical Water

Technology has the capacity to be transformative in a positive way. One way that this is being achieved is in the Maritime sector.

Before the pandemic, many shipping companies were heavily reliant on spreadsheets and emails to co-ordinate their systems. Yet, the pandemic has forced the industry to engage with technology on a scale that it was reluctant to do so previously.

In a survey by Haven, a transport management services provider, over 42% of respondents are looking to upgrade their systems by investing in the further digitalisation of the shipping process.

However, as with any upgrade and development, there are opportunities as well as risks, with cyber experts warning that many Maritime companies need to step up their cybersecurity efforts to protect themselves. With the main targets being the so-called “on-shore” systems that are currently being upgraded.


Further Reading Suggestions

How COVID-19 shook up global supply chains

The transformation of risk is a growing exposure for insurers


Aggregate Exposure, Connected Risk, Corporate Risk, Corporate Risk Managers, COVID-19, Economic, Financial Services, Risk Modelling, Speciality Classes, Supply Chain Exposure

Return to Connected Risk Articles

48%

Share this article

Need more information? Contact Us Here