Will Covid-19 Spur Innovation: 4 Insights for Entrepreneurs

The coronavirus pandemic has been life changing for all of us. National lockdowns, quarantines, the #stayathome campaign, remote work, interrupted travel plans, as well as struggling businesses and economies have accounted for a disruptive start to 2020. One industry that has been put to the test in the time of pandemic is healthcare.

The other one - is technology. The necessary self-isolation has shifted our lives online, revealing the true condition of digital infrastructure around us, but at the same time exposing enormous innovation opportunities. Below I share 4 insights that can be extrapolated from the current situation and used to turn crisis into an opportunity in the eventual post-pandemic world.  

Insight 1. Digital divide is strong, and it is high time we close it.

The covid19 situation has exposed a digital divide that is still sharp in many communities and countries. There are two areas where the divide has surfaced out in particular: (i) in the ability of individual countries to deploy technology to fight the pandemic, and (ii), in the ability of individual citizens to continue living their personal and professional lives in a remote setup.  

The effort to deploy emerging technologies in the fight against covid19 has been extensive especially in Asia, most notably China, Singapore and South Korea, showing an impressive advancement in AI, robotics, big data and automation in this part of the world. In Singapore robots have been used to deliver meals and medication to coronavirus patients and to disinfect hospitals. In China drones deliver medical supplies, and in South Korea artificial intelligence is used to scan thousands of medical images in a flash to accelerate diagnosing.

While Asian countries keep on deploying the tech artillery to combat the virus, many other countries are facing more fundamental problems, including the shortage of basic medical safety equipment supplies, such face masks, protective gloves and suits. In Italy more than 2,600 medical workers so far have been infected with coronavirus accounting for 8,3% of the country’s total cases. That’s double the percentage of infections among medical staff in China.

The digital divide has also become apparent in how quickly and seamlessly citizens can adjust to a remote lifestyle in the “stay-at-home” period and continue to participate in the economic, political, and social aspects of life. Although according to Eurostat over 85% of EU citizens have regular access to the internet, having to rely on digital infrastructure in virtually every area of life, from shopping, administration, payments and education has revealed that there is still a lot to be done to provide citizens with the type of digital infrastructure that would allow them to function “as usual”.

In my native Poland, insufficient digitisation has become a problem especially for teachers and students who are forced to shift to online education for the next few weeks or even months. Lack of one reliable and standardised online curriculum, little familiarity with digital education tools and methods, limited computer literacy among the teachers and insufficient experience in running lessons online make for a truly chaotic experience, both for teachers and students alike.

Of course, some schools, teachers and students will be more prepared to handle the situation, but it is the underprivileged who will suffer the consequences of remote education most severely.

The digital divide exposed by the outbreak has thus highlighted a demand for accelerated innovation that could narrow the gap. The coronavirus situation shows that access to digital infrastructure is not just a matter of greater comfort or convenience, but a fundamental human need, and that access to exponential technologies by governments could make a difference between life and death.

Insight 2. Tech solutions must come with solid governance

As new tech projects are being impetuously deployed to fight the pandemic, the governance issues remain. There are two sets of challenges related to governance in the time of pandemic. First, digital agencies and policy makers are forced to play the catch-up game to enforce policy laws on those digital infrastructures that had been deployed before the outbreak, but are now being used at a much greater scale. Second, they must keep up with the number of new projects that are being rapidly rolled out as the aftermath of the outbreak.

In Sweden shifting to digital education has exposed standardisation issues of the digital curriculum. The standardisation problem goes back to the long history of public sector agencies that used to operate across the Swedish public administration with significant independence (see this OECD report for more details).

Such decentralised mandates have contributed to the emergence of policy silos that work against establishing strategic coherence across the Swedish digital education curriculum. The consequences are now fully exposed.

Hasty deployment of digital tools aimed to aid the situation is another type of a pandora’s box for policy makers. The central concern here is achieving the fine balance between social impact and data privacy. As countries are working against the clock to fight the spreading of the virus, it is easier than ever to deploy technology-driven solutions with immediate positive impact, but with potential benign effects on citizens’ privacy in the long term.

The Washington Post reports that the American government has approached Facebook, Google and other tech giants to obtain greater access to citizens’ smartphone location data in order to more effectively combat the spread of coronavirus. In Poland, the government issued a Home Quarantine app that allows quarantined citizens to check in and prove their compliance with the restriction.

The check-in is achieved by taking a selfie that is then correlated with the phone’s geolocation data. The application has generated a lot of controversy. While some see it as a tool of social usefulness, others perceive it as a reflection of “Orwellian” reality, where a system introduced in haste and fuelled by fear, turns into a tool of surveillance and control.

Insight 3. Investments in innovation should be proactive, not reactive

In times of crisis governments, organisations and businesses that come on
top are those that can swiftly switch to sustainable digital infrastructure and offer customers, citizens or employees seamless digital experience, including cashless payments, online shopping, virtual workplace, online entertainment etc.

Digital maturity does not come out of nowhere though but is a consequence of two factors: proactive investment in innovation programs, and an agile mindset, with strong ability to quickly adapt to new circumstances. It remains to be seen to what extent the outbreak will encourage business leaders to accelerate the development of behaviours and mindsets that will help them build resilience to effectively navigate their organisations when the terrain gets rough again.

In the center of this approach should lie a strategic shift away from perceiving innovation as extravagance or a threat against legacy systems, and towards making innovation a strategic driver of all business operations. According to research, increased investment in innovation is indeed correlated with crisis. In a study based on 15k EU companies, Brzozowski and Cucculelli (2016) analysed the degree of innovation investments following the 2008-2009 recession.

Results show that companies that have experienced and survived a crisis are more likely to adopt a proactive approach towards innovation investment. The coronavirus outbreak could thus push the so-called innovation followers to become frontrunners, while strugglers might start catching up to become followers.

Insight 4. Remote work will impact workplace dynamics

With many governments declaring a state of emergency due to the covid19 outbreak, employers globally are enabling work-from-home structures to allow employees to adhere to social distancing guidelines. Will the newly acquired or reinforced home office habits reshape workplaces in the post-pandemic world?

Distributed workspaces have become possible thanks to technologies and tools that can support the remote workflow, including real-time collaboration, efficient communication, and document sharing. There is a
plethora of online tools available that provide a fairly seamless and intuitive online working experience, tailored to almost every need – from document sharing, video calls, chats, planners and time trackers, through to more sophisticated tools such as virtual conferencing apps powered by AR and VR technologies.

Working remotely might not be an option for every everyone due to industry type, logistics or simply preference. However, research continues to show strong correlation between some degree of remote work and job satisfaction. A study of 1,001 remote workers found that they are 57% more likely than the average American to be satisfied with their job,
and 80% described their typical stress level during the work week as low.

Paradoxically, remote work can make more space for one to one interactions between colleagues. In a personal conversation, a colleague of mine who works as a university professor, and who is now conducting her academic teaching online admitted that working remotely gives her more
opportunities for quality interactions with students, something she hardly had time for when working on site. Often the remote setup gives people, especially more introverted ones, the extra confidence to interact and engage with peers.

Studies show that remote work also benefits the employers. Apart from the obvious advantage of removing location as a roadblock to reaching high quality talent, companies allowing remote work on average have a 25% lower employee turnover compared to those that don’t.

Moreover, remote working model leads to significant cost savings. A typical company saves about $11,000 per half-time telecommuter per year, according to Global Workplace Analytics. To coin this situation into an opportunity, employers must consider remote work not as a desirable perk but an equally efficient yet more cost-effective alternative to onsite work.

The shifting workspace dynamics reveal innovation opportunities in this space. As digital workplace infrastructure is being put to the test, gaps and insufficiencies surface out. At the same time remote work makes space for creative solutions that shift more and more work activities normally shared in the physical space to the online world. What we can thus anticipate is accelerated innovation in this area, inevitably leading to better products and services.

Conclusion - with crisis comes opportunity

The crisis has forced us to unlock and leverage the digital solutions available to us now. But this intensified adoption of technologies has also revealed what still needs to be done to up the quality of digital infrastructure around us. While for each government, organisation and business there will come a time for conclusions and learning, it is likely that the outbreak will spark a wave of innovation leading not only to optimised services and products, but to new solutions altogether.

From elementary digitisation in some communities through to cutting-edge tech in others. The examples provided here, such as education, employment or workforce are just a few out of a wide range of areas impacted by the outbreak. As people become used to availing themselves of digital services and start forming new habits, we should anticipate a wave of innovation, designed for our new way of living and working. The innovation shift will require all hands on deck, not just for entrepreneurs, but also for policy makers who now more than ever must make sure that the solutions deployed are sustainable, secure and in compliance with regulatory standards.

It is difficult to predict when the crisis will be over and what impact it will have on societies and economies, but it is likely that in the post-pandemic world the technology sector will have their hands full.