The Covid-19 pandemic has altered the speed and scope of digital transformation, and the tech sector has been rewarded with significant growth and influence. As we tentatively move into a new phase, can the innovative and agile nature of digital technology underpin the wider recovery and a new more inclusive approach?
The virus has led to an increased demand for agile, cloud-based technology solutions as more people work, are entertained, and shop from home. Even the most prepared organisations have had to adapt to new working practices, streamlined teams, unpredictable demand and the increased impact on physical and mental well-being within a new socially distanced norm. Underpinning this is an increased pressure on the tech sector to improve our Covid19 world by delivering more technology led insight and capability through digital transformation and change.
Given the gravity and scale of the Covid-19 pandemic, we expected to see client’s significant IT projects slowing down and being put on hold. Some have, but a surprising number of companies have accelerated their digital transformation agenda and taken this opportunity to capitalise on the unprecedented and universal need for increased digital capability. This is not uncommon, as Satya Nadella CEO of Microsoft confirmed, “We’ve seen two years’ worth of digital transformation in two months.”
Prior to Covid-19, the champions of digital transformation tried to encourage us to change our habits and embrace a new norm, but as a society we valued the status quo. However, the speed and scale of the pandemic has resulted in unprecedented commercial, social and environmental change. Barclays, CEO Jes Staley stated, “there will be a long-term adjustment in how we think about our location strategy ... the notion of putting 7,000 people in a building may be a thing of the past.” This shift in attitude to more remote working and less commuting may in fact be the catalyst for a digital transformation, enabled and maintained by increasingly sophisticated technology.
However, the undercurrent of anxiety around separation, job security and the implications when the government bailouts ease, is still very real. McKinsey’s identified the disparity of sectors impacted by furloughs and jobs at risk. This highlighted that Information and Communication have only seen 13% of the workforce furloughed compared with Accommodation and Food Services at 73%. While we are yet to understand how quickly each of these sectors will recover the data suggests the tech sector is prised to bounce back faster than almost every other industry out there.
The London School of Economics highlighted the need to avoid the post 2008 austerity and to grow out of this financial crisis. “Recovery must be driven by an expansion of demand but has to be part of a story of sustained investment, innovation and growth…beyond the stabilisation phase, we must act to create a strong recovery that can support job creation and hence consumption, and re-design, not just restart, investment.” The scale of investment is so significant that if leaders chose responsibly there could be a positive impact on climate change and improved environmental legacy too.
The virus has elevated the value and necessity of agile, technology led solutions in all aspects and sectors of the economy. There is a very real opportunity for the innovative approach and inclusive capability of technology to lead the recovery. Five of the big-tech stocks now constitute more than a fifth of the value of the S&P 500 index — a modern-day record in terms of concentration. Big Tech is hunting for expansion too at the fastest pace since 2015. So, the challenge is on for the tech world to drive the recovery while other sectors find their feet, but this will be a colossal ask as the demand for specialist tech talent has never been greater or at such a high premium.
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