Crisis = Danger + Opportunity
Past periods of temporary crisis have permanently changed behavior. The Oil Shocks in the 1970s jolted major economies and caused lines at gas stations as OPEC constricted energy supplies. This drove vehicle fuel efficiency innovations and investment in domestic oil production. After 9/11, passengers became accustomed to far tighter security screening at airports. During and after the financial crisis, businesses embraced cloud computing, and consumers adopted e-commerce. The social distancing across major economies is creating a massive shift to remote work.
The Implications of remote work
The coronavirus crisis is forcing rapid workplace change as society’s physical contact becomes replaced with digital connections. While organizations like Momenta have been collaborating with distributed teams for many years, adoption within companies has greatly varied. There are distinct advantages to in-person collaboration, but when that’s not possible people need to adapt quickly.
What does social distance change?
Forced by self-quarantine, in-person meetings must increasingly move to online conferencing/digital communications. This will drive the need for additional bandwidth, compute, and storage with higher throughput and lower latency. Expect continuing innovations to scale internet infrastructure, including multiple flavors of edge computing, machine learning/artificial intelligence, and low-power connectivity.
What happens to the supply chain?
Beyond the spectacle of toilet paper locusts descending on supermarkets across the globe, the crisis has exposed very real vulnerabilities in critical supply chains, such as pharmaceuticals and medical equipment. The sudden demand spikes for products like hand sanitizer, bottled water, paper towels, and toilet paper has emptied inventories, but there’s the risk of disruption to in-person warehouses and distribution workers that move the goods to the consumer. Factories need to respond quickly to unexpected spikes in demand without over-investing in capacity only needed for a brief period. Expect to see more innovations in automation, robotics, remote, and autonomous vehicles.
Where do we go from here?
The economic situation and the market remain fluid as the full impact of COVID-19 and subsequent mitigation efforts unfold, however, expect to see rapid changes ripple across industries for the foreseeable future. There is a recession coming, and that will mean spending cuts and layoffs on one hand, but also investments in new capabilities, a rethinking of office spaces, new considerations around living density and public spaces and above all, new ideas that come to fruition far more rapidly than in stable times.
Crisis is the combination of Danger and Opportunity, and in these interesting times there are opportunities like never before to rapidly innovate, to transform and to embrace Digital Business – Momenta Partners expect to emerge stronger than ever once this has passed.
Wishing you stay safe, healthy and connected.
