Author: Khuloud Al Omian, Editor-in-Chief, Forbes Middle East
I would like to name the economic and technological transformation that has now begun, “COVID-Tech.” Why? Because this pandemic has made it very clear that we can no longer sustain ourselves independently from technology.
Today our phones, laptops, tablets, and the internet help us to do so much more than just stay connected. This global pandemic has put all our lives, health, education, businesses, food supplies, and economies at stake. It has revealed to us the reality of our existence today: access to basic technology is no longer a “want” but a “need.”
Technology has not helped us to end the pandemic, at least not yet. But it has forced us to dive deeper and discover its true potential across various sectors. “COVID-Tech” has revealed a deep contradiction. Despite our claims of having highly tech-enabled ecosystems, this virus has been able to isolate us all in our homes.
Students have easily adapted to e-learning and quickly developed the motor skills to communicate with classmates and teachers on digital platforms. How will we prepare and innovate for a generation that has acquired technological skills at such an early age? The era of innovation has begun, but where will it lead us?
Today, we have no choice but to order a cup of coffee through a third-party delivery app, or to use a telehealth platform for a virtual check-up from a medical professional. Even the way we work has been revolutionized thanks to video conferencing tools. Such platforms that may have previously been a luxury for some have now forced people to become their customers.
COVID-19 is speeding up digital transformation for industries, companies, and individuals. The over-arching themes in this report are:
How consumer usage habits are changing to embrace e-commerce, digital communication, e-learning, and online entertainment.
How a faster transformation in industries will create new business opportunities, including in food delivery, location services, and Fintech.
How enabling technologies such as AI, 5G, and the Cloud will be now be adopted faster by companies.
I will talk about various aspects of new technology that have touched our lives as laymen who do not play with tech for a living. I highlight the reality of life with the big question: what are the technological and economic transformations beyond the novel coronavirus? But firstly, if someone asks you, “what is COVID-Tech?” tell them it is the era of technology after coronavirus.
Why do we have to keep this memory as a reference point in our history? The answer is simple: imagine if the isolation that we witnessed in a pandemic (COVID-19) was in the era of 2G technology, what would have happened? I will leave that up to your own imagination.
These are my predictions for COVID-Tech.
1. Consumer Usage Habits Are Changing
A) Digital Communication Is Here To Stay
We would have never experienced the true potential of electronic communications had it not been for this pandemic. Microsoft’s Work Trend Index report revealed a new daily record of 2.7 billion meeting minutes via Microsoft Teams in a single day—an increase of 200% compared to an average of 900 million minutes in mid-March.
In the era of COVID-Tech, Google allowed free access to Hangouts Meet services without additional fees for users until the end of September 2020. Javier Soltero, General Manager and Vice Chairman of G Suite said in a post on his official website: “We skipped in the first week of April, an important stage with over 2 million new users who now communicate via Google Meet every day, spending more than two billion minutes together, which exceeds 3,800 years of safety meetings.“
Among other apps that have received unprecedented demand at this stage, Zoom is the talk of the town, which allows for group video and audio calls. According to a statement from the company, the number of users of the platform last month reached more than 200 million people every day using paid and free services, compared to about 10 million people at the end of last December.
The pandemic has also transformed the conferences and events industry, which has now gone mostly virtual, if not completely. This has had both positive and negative impacts on the economy at large, which we will cover in more detail separately.
With the ongoing trend of remote meetings and virtual events, the electronic communications sector is poised to see immense competition and growth in a bid to attract a wide customer base by introducing the latest features to enhance experiences. Whatever the industry updates might be, it is without a doubt that you and I will inevitably be heavily reliant on digital communications in our new normal.
B) Innovations In E-Learning
Research by the University of Florida shows that the global e-learning industry will reach $325 billion by 2025. However, the research was done before the COVID-Tech, and I am sure newer studies will reveal a higher market cap.
Eric Yuan, founder and CEO of Zoom, said: “Zoom’s use jumped overnight to exceed our expectations when we announced our desire to help at the end of February. This includes more than 90,000 schools in 20 countries that responded to our offer to help students complete their studies remotely.”
We are already witnessing a widespread change in the education sector that is moving towards e-learning, and we should expect further advancements in the field.
C) Rethinking Entertainment
Let’s visualize what entertainment will look like post-COVID-Tech. Are we still going to go back to cinemas and immerse ourselves in huge crowds? I am afraid the answer is no, at least not until the end of 2020, or however long this pandemic keeps us indoors. Until then, the demand for consuming entertainment content online is increasing significantly.
In Q4 2019, Netflix had 167.1 million subscribers. Then, in just the first quarter of this year, that increased by more than 35%, with 59.1 million additional users downloading the app.
So, let’s indisputably welcome the era of video streaming platforms such as YouTube, YouTube Kids, Disney+, and many more to follow like Quibi, HBO Max, and NBC Universal’s Peacock. A recent report by Apptopia and Braze highlighted how, in the US, Disney+ was the most downloaded app, with 14.4 million downloads. The platform also reported the second-highest revenues in Q1 2020 at around $48.5 million.
The world of gaming is also incredibly popular with the young generation, who spend their time playing Fortnite, Call of Duty, Tekken 3, DOTA 2, and Minecraft, among many others. The names on Forbes’ list of the ten highest-earning video game players grossed a total of $121 million in revenues last year. App Annie’s State of Mobile Report 2020 claimed that in 2019, $89 billion was spent on mobile gaming, which represents 72% of all App Store spend last year. Mobile gaming was the largest sector in the overall gaming industry based on revenues. These numbers will entice major game publishers such as Electronic Arts, Ubisoft, and Activision Blizzard to invest further into gaming development technologies to enhance in-game features and experiences. We expect more companies to appear in the coming years to try and take a slice of the revenues.
D) Reliance On E-Commerce
E-commerce and e-retailing have seen a triple-fold increase in revenues and customer numbers during this pandemic as people turn to apps and online platforms to order groceries, medical supplies, and other products. Last year, e-commerce retail sales worldwide reached $3.5 trillion, and e-retail revenue is expected to grow to $6.5 trillion by 2022, according to data from German research firm, Statista.
Globally, e-commerce sales are expected to exceed $4.2 trillion this year, especially with the continued growth of tech giant Amazon, which is growing at higher rates than the market, accounting for about 37.7% of all US online sales in 2019, according to a report by EMarketer. With the pandemic isolating people at home, we expect actual revenues to exceed all forecasts and predictions by a big margin.
The global markets will witness growing competition between e-marketing giants such as Alibaba, Amazon, Walmart, and others as they continue to attempt to increase their share of global e-commerce revenues.
E-commerce will have a wider impact on many industries, but specifically food, cosmetics, electronics, second-hand items, books, music, education courses, and children’s products.
2. Faster Transformation Creates New Business Opportunities
A) New Experiments In Food Delivery
I want to focus mainly on the fast-food and home delivery market, where the speed-focused delivery business is racing to capture customers across America, Asia, Europe, and the Middle East. These new electronic platforms attract large investments and high ratings.
The food delivery market is expected to exceed more than $200 billion by 2025. It is estimated that the industry made $82 billion in total revenue in 2018, and this is set to more than double by 2025, supported by a cumulative growth rate of 14%, according to Frost & Sullivan.
In this competitive market, just having a delivery operations team will no longer be sufficient. Restaurants will need to step up and rethink their business models to outperform the sector. Although we already see higher-priced names in the industry joining the food delivery game, I forecast the introduction of at-home dining experiences and the hiring of personal chefs in the post-coronavirus world.
B) Advanced Web Mapping Services
I believe that the growth of the online delivery market will also drive more investments in developing the infrastructure for more accurate location mapping services to improve delivery times. This will not only contribute to improving delivery times but also help to overcome address identification issues and subsequent tracking.
According to Forbes, Uber—which relies heavily on maps as part of its app to help drivers navigate and give customers a visualization of their journey—paid around $58 million to Google to use Google Maps between January 2016 and December 2018.
C) Rising Confidence In Telehealth
What will be the role of mobile and wearable devices and patient monitoring in the healthcare industry? How will AI contribute to remote operations, and how will it help analyze big data to learn patient trends? How can technology be used in hospitals, in operations and diagnosis, so that people can get the best medical care with the best doctors and the most prestigious hospitals in the world, without needing to travel, limiting travel expenses and many other requirements?
The telehealth market is expected to grow by 64% post-COVID-19, compared to the anticipated 32% pre-COVID-19. The virtual care market is also projected to have a 100% increase in its usage and adoption in the remaining eight months of 2020, according to a Frost & Sullivan report.
The global healthcare market reached nearly $8.4 trillion in 2018 and is expected to reach $11.9 trillion by 2022, according to a report by ResearchAndMarkets.com. On the other hand, AI healthcare systems are expected to generate revenues of about $6.7 billion per year, as reported by Statista.
D) A Fintech Revolution
In the era of isolation, we have witnessed an increased reliance on digital mobile banking services and digital payment platforms. There is no doubt that growth in the digital payments sector is driving the global financial technology (Fintech) market, which is expected to reach $460 billion by 2025, according to an Adroit Market Research report.
These studies were released before COVID-Tech, but now I expect to see more demand. An example of this is PayPal, which is currently accepted on millions of websites and is valid in more than 200 markets worldwide for online payments.
Cryptocurrencies are already used globally for online transactions, with governments now exploring Central Bank Digital Currency (CBDC), which will be much safer and more highly-regulated than normal currency. Cryptocurrencies and transactions in the region are subject to a lot of uncertainty, with a number of crimes associated with them that have delayed growth in the region. Although central banks are working to regulate digital currencies, there is still much more work needed in regulations.
3. Enabling Technologies Adopted Faster
A) Exploring The Unknown With AI
Around $57.6 billion will be spent on technologies like artificial intelligence (AI) and machine learning by 2021, as per research by Deloitte. Without a doubt, AI will be one of the most important pillars of automation awaiting the new world order.
Chinese tech behemoth Alibaba has announced that it has an algorithm that can diagnose the COVID-19 virus with 96% accuracy within 20 seconds. Meanwhile, beyond healthcare, pizza chain Domino’s is using AI and machine learning to improve store and online operations thanks to help from Nvidia’s technology.
AI will be among the most important technologies that we will come to rely on, leading to many changes and disruptions in the future across all fields and industries.
According to Oracle, leaders in their fields will be relying on AI-operated tools to understand customer and operational problems and find answers more efficiently in shorter turnaround times, as systems will be relying heavily upon data. Despite some fears regarding human replacement associated with AI, I think these concerns are no longer valid, as we are at a stage of accepting and adapting. We are now ready for new technologies that will help us in automating factories and reducing human labor so that we are ready if another pandemic hits.
B) Adoption Of Cloud Technologies And Big Data Progress
I expect COVID-Tech to be an era of cloud adoption among the masses, as working from home has made it nearly impossible for traditional businesses to survive. Accessibility to important data and information has been a major issue for certain businesses, and many are now contemplating a partial, if not full, adoption of cloud services. To handle and survive in these uncertain and dynamic times, cloud adoption will become a must-have to ensure business continuity regardless of any adverse situation impacting physical movement to work.
The amount of data created each year is growing faster than ever. By 2020, every person on earth will create 1.7 megabytes of information. According to a recent study by Statista, the big data market is expected to jump to more than $103 billion in 2027, which is twice the expected market in 2018. Google has more than 40,000 searches every second, which is 3.5 billion searches per day.
However, a challenge here could be in the question: “Does Google sell your personal data?” The answer is both yes, and no. This dichotomy is Google’s intelligence. Google runs a massive data-gathering infrastructure that is deeply integrated into most of its products. Google benefits from analyzing big data and using it to create new products and new services. New developments would pave the way for enhanced data protection laws. Are these new concepts part of the new world order I’m talking about?
Let’s discuss the future of big data and where it stands now. I want to raise an important point and answer the question of whether or not big data analysis is dangerous or not. The answer is another question: are we ready for this stage? Despite many dialogues on the topic, the world still needs new legal frameworks, more transparency, and possibly more control over how our data is used to make it safer. How would you feel if the companies analyzing our behavior, habits, and everything about us fell into dangerous hands? Ethically, there are still many unanswered questions.
C) 5G Enables A New Tech Ecosystem
In light of this technological revolution in the era of COVID-Tech, there is now a need to adopt and recognize the technology of the fifth generation. The interconnectedness of the technology ecosystem has become clear.
5G, may not satisfy some, but the truth is this platform will likely be the global infrastructure that catches the attention of the world. China is the leader in this technological revolution, having launched the 5G platform as its national network, starting commercial operations on November 1, 2019.
Will 5G technology be a major empowerment platform that will change our lives for the better? Yes, but is it safe? This debate is still deep and ongoing, with some experts expressing concern about its impact on our health due to dangerous levels of radiation and other harmful effects.
In the era of the new world order and its benefits, we only have to ask: will 5G be the next powerful tool? Will we see self-propelled vehicles soon? Is the future coming for a new generation prepared for distance learning? These questions need more time and experiments to be answered, but now if someone asks you about COVID-Tech, what will you say to them? The answer is in your hands.
Stay safe and make sure that your health comes first.