The Hyper-Digitalisation of Covid-19

Economics, Politics, Quick Reads, Quick Reads
Reading Time: 3 minutes

“A reminder that the virus does not discriminate, we are all at risk.” These were the words UK Cabinet Office minister Michael Gove presented to the public when Prime Minister Boris Johnson tested positive for coronavirus. Covid-19 may not discriminate but it certainly impacts individuals, companies, and countries differently, for better or worse. Despite the unrelenting news about suffering and hardships as countries struggle to recover, there are still a handful of more optimistic sources proclaiming the upside of the pandemic. Technology has been adopted faster than ever before, with individuals and businesses taking their first (and not last) steps into the digital world. Although many will be eager to return to the pre-lockdown days, one thing is certain: technology will become an even more integral part of our lives.

Telecommunications services were understandably the big winners as users rushed to these platforms for teaching, work, or even doctor consultations. Zoom, an online chat service, went from 10 million to 200 million daily active users in 3 months, with share prices increasing by 140% since the start of 2020. Microsoft Teams crashed due to the unprecedented strain on its system induced by a 40% increase in software usage over the course of a single week. Such technologies, among others, are not only being adopted but also developed at rates unimaginable at the start of the year, with Covid-19 acting as a catalyst for digitalisation. The development of such infrastructure is also allowing a range of events to be held virtually, some of which could become permanent as the ease of global interconnectivity becomes apparent.

The major downside to such hyper-digitalisation is the division it causes as those unable to adjust are left behind. According to the digital economy head of the United Nations Conference on Trade and Development (UNCTAD): “Those that do not have access are at risk of being left further behind as digital transformation accelerates, especially those in the least developed countries.” This is especially poignant considering that only one in five individuals have access to the internet in less developed countries and under 5% of the population buy goods or services online. Not only will they not be able to profit from the once-in-a-lifetime online opportunities provided by the crisis, but they will subsequently suffer in the long term as the global economy digitalises. Unfortunately, developed economies are not immune from this process, with those in less fortunate positions losing out. Some individuals will not have access to online education due to a lack of internet connection or necessary digital devices. Such disadvantaged pupils will not be able to benefit from the online education provided to them, contrary to their peers, further worsening any existing education gap.

Another industry split caused by emerging technology during the Covid-19 outbreak is sports and exercise, for example cycling. The cycling season has, like many others, been put on hold and despite plans for a reduced calendar, it seems unlikely that this will be feasible, marking the first year since 1918 that all professional bike racing has been halted. This could spell disaster for the professional peloton because many team sponsors rely on either gas, oil, tourism, construction, or leisure industries for their funding. This would be particularly damaging because sponsorships account for 80-95% of a team’s budget. One rider went so far as to claim that only 3 of 19 World Tour teams, the highest tier in cycling, would survive if the pinnacle of the sport, the Tour de France, was not raced this year. In the meantime, online cycling platforms such as Zwift, which markets itself as a ‘game’, or TrainerRoad have been hitting new user highs daily with many individuals recognising online cycling as an indispensable way to exercise when in lockdown. This spike in demand is further demonstrated by a shortage of digital bike trainers, initially in Australia and now Europe. With different parts of the cycling world experiencing contrasting outcomes, the sport will likely change forever. This divergence caused by the hyper-digitalisation resulting from Covid-19 is also apparent in many other sectors and will shape our future.

Hyper-digitalisation will inevitably cause a long-term change in the economy as individuals and companies start to comprehend the benefits of prominent technologies during the crisis. With certain businesses moving their products online, employers are starting to reconsider the need for large office spaces and looking into the option of working from home which has previously been frowned upon. The adoption of online shopping is also astounding, with 9% of customers in the US buying something online for the first time. Interestingly, this increase in online purchases is particularly prominent among older generations. Many say that they will continue using such services even when life returns to ‘normal’. Despite this move to a more digitally connected world, the value of physical human interactions must not be understated. Therefore, it is likely that even in a more digitalised world, face-to-face exchanges will not be completely replaced.

Leave a Reply