More than three months on since the emergence of the coronavirus, talking about the high demand for products of the digital economy is no longer a predictive matter, but rather a reality. Since the first half of February, the Hong Kong Stock Exchange has displayed huge gains.
It’s not only Chinese companies active in the digital economy who have made gains, but also the shares of digital companies situated around the world. All of this is quietly sneaking under the radar of global news outlets who favor darker news. Those unhelpful bulletins initiate a sense of "panic" that limits the ability of startup owners and small businesses to think about the possibility of adapting and exploiting opportunities presented by these temporary conditions.
Nationwide lockdowns have led to the necessity of searching for alternative services that can be provided through smart phone applications and online platforms. Economists have tried to explain away the gains of digital companies, as a result of these new realities. However, since the coronavirus pandemic is not the end of the world, the emergency situation will soon disappear, just as is the case in China. Life in the Chinese province of Hubei (which was the initial epicenter of the spread of the coronavirus pandemic) is returning to normal, so does this mean that the markets will later suffer a correction within a few months, at the least, within a year? As far as equipment and medical clothing companies are concerned, the most likely hypothesis is that demand for their products will decrease with the decline of the virus spread. As for digital companies, it is likely that they will continue to grow. This hypothesis can be adopted for the following three reasons:
First: the growth of unconventional services via Internet
During the last few months, a group of online services that did not exist before and others that were less common in lower-demand markets for digital services appeared. One such service is provided by Peloton for home training bicycles, which has the advantage of communicating with other trainees via the internet. Demand for this service has increased by more than 50% during a record period, as well as the group viewing service launched by Netflix as an alternative to the cinemas that have closed their doors. We’ve also noticed a huge growth in telemedicine services. In this regard, it is expected that coronavirus will push people towards digitization at a rapid pace, which will lead to a shift in the health sector environment to become more digitized. Telehealth in a number of countries, especially Western ones, may not be new. The United States, for example, is already advanced in the process of digital transformation in the field of healthcare. But what’s changed is the speed and comprehensiveness of this transformation. The concept of digital health care is now spreading to new markets, such as across the Arab peninsula where telehealth is still an unconventional service.
Second: Investing in digital transformation
Despite the digital transformation underway at many companies around the world, the vast majority of companies still rely on the traditional work environment which lacks the flexibility to continue working under the current circumstances. This has forced the companies to accelerate their process of digital transformation, such as transferring the work of their employees to homes, the adoption of cloud computing technology, remote meeting technologies, the adoption of electronic stores and digital marketing, and many other digital transformation measures. Of course those services are not free of charge, and it requires companies to bear the brunt of those costs. Universities in Australia provide a perfect example of this. Many universities that receive international students from China have been forced to equip their facilities with distance education programs for international students who have been forced by ongoing circumstances to return to their countries. By making this rapid investment in digital transformation – after the cessation of the coronavirus pandemic – companies cannot simply abandon those investments. They will continue to use them, which is also another reason why digital products will continue to grow in the future.
Third: The experience of changing the work environment and consumption
The experience factor is related to the previous two factors, as companies now discovering the benefits of the digital business environment will continue to develop their digital business model and abandon many traditional business methods. As for consumption, the change is manifested by changing consumer behavior. Millions of consumers did not have any previous experience with the products of digital companies, such as learning, telemedicine, delivery services, and electronic products. The fact that consumers have now experienced consumption through the internet will enable digital companies to enhance their customer base. "The economy of quarantine," (as it is called in China) will develop new consumer habits, as people who have to the opportunity to experience digital services today may become permanent customers in the future.
In spite of the pessimistic news about slowing global growth, the Chinese experience so far shows more positive signs. After the COVID-19 pandemic receded in China, shops are witnessing an increase in their sales volumes above levels recorded in the same period last year. This is an early indicator of the possibility of markets auto-correcting in the period immediately following the end of the health emergency. As the Chinese experience indicates, companies that are now adapting their businesses through digital transformation will achieve future gains, by exploiting the “pent up demand” caused by the period spend under lockdown conditions.
In the midst of the toilet paper panic, you might be wondering if there’s a way to profit from this madness of the crowd.
Of course, there is. But there’s a better (and perhaps more ethical) way of doing it rather than stockpiling hand sanitizer in your spare room. There are real needs that large markets of people will soon discover. If you can be the first to provide that need, the world will beat a path to your door.
Can you think of the new wants that will result from more people working at home, student classrooms relocating from physical plant to the web and leisure activities moving from arenas and theaters to gaming systems and online movie archives?
Perhaps to grease your creative gears, it will help to explore the quick history of invention through the lens of economic eras. As populations expanded and grew, the need for greater food production increased. To meet this need, creative tinkerers invented tools and machinery to enable greater agricultural efficiencies.
Soon, demand for these tools and machines created a need for greater industrial production. Imaginative logistical thinkers designed new and better manufacturing methods to meet this demand.
Voilà! Bye-bye agricultural age, hello industrial age.
After about a century, it became clear the manufacturing advantage would fall to those who could process data quicker. A need for a machine capable of handling this massive number crunching emerged; thus, the computer was created.
Soon, the industrial economy gave way to our current age: the information economy.
It is this new business of bits and bytes which saw an increased need for faster and more expansive delivery of data. This need allowed a generation-old invention—the internet—to find a niche that exploded the information economy.
As you can see, a specific need triggered each transition from one form of economic activity to another. The results of the conoravirus, and the social distancing policies put in place to prevent further spread of COVID-19, will likely produce a vast array of previously unknown necessities. Maybe some future economic historian will call this period the beginning of the “CoronaEcomony.”
Here is where your entrepreneurial acumen can serve all mankind. Necessity is, after all, the mother of invention.
Does this interest you? Do you suspect you’ll have idle time as a result of going out less? Would you be interested in seeking a way to earn money by delivering newly invented products and services that will benefit your friends, neighbors and perhaps the nation (if not the world)?
Consider how the three behavioral changes defined above may reveal new wants just waiting to be filled.
1: Telecommuting becomes the new norm.
Many suggest remote working will be just temporary. Thought leaders, however, realize the need to work at home will reveal the existence of inefficiencies that exist in the current way of doing things.
Here’s a simple example: the face-to-face directors meeting. This has been a norm since the beginning of the industrial revolution when the entity known as the “corporation” became the standard. Directors would gather together for lunch, dinner or some other activity and hold a meeting.
In the past this was a physical meeting. More often than not today, if you want the best directors, you better be able to allow them to videoconference.
Why? Simply stated, the cost in both time and money required of travel does not offset the value-added of meeting face-to-face.
Now translate this metaphor to the office environment. If your job has you working on a computer in a cubicle each day, why can’t that cubicle be in your home? It’ll reduce your cost of traveling to work, of buying lunch every day and the maintenance (and acquisition) of your wardrobe.
At what point do those costs outweigh the benefits of working in close proximity to one another?
Do you see why telecommuting can become the new norm?
What new wants will bubble up as a result of more people working at home? Perhaps a better understanding of how to make their Wi-Fi more efficient. Maybe they’ll want to learn how to cook meals quicker or more elaborately.
A few years ago, Sonja Nenonene shifted from working for an accounting firm to set up her own tax business at home. She expected to need to buy her own office supplies. “What I didn’t expect,” says Nenonene, “was the need for administrative services. I don’t have a big copier at my house, so I had to find an external provider for this. Normally, I would hand this off to someone else to do the printing and mailing.”
Will telecommuting produce an increased demand for virtual assistants, online tech support and web-based training?
To be honest, you shouldn’t expect to find the answer to “undiscovered wants” in a Forbes.com article. (Otherwise they wouldn’t be “undiscovered,” would they?)
#2: Distance learning becomes the new norm.
Online learning was a growing and evolving industry until regulations made it more difficult for the for-profit educational organizations advancing the idea. While the growth has slowed, it never stopped.
Now it may accelerate as not-for-profit institutions are compelled to deliver their product via the internet. Once the genie is out of the bottle, it usually proves difficult to force the genie back into its captivity. These institutions may realize the benefit of accommodating more students by offering online programs.
This has the potential to broaden the availability of the program to students who are less able to afford higher education because online classes will be offered at a lower cost. In addition, by living at home, students would not burden themselves with the cost of room and board and they’ll be able to continue working at home.
Who knows, with the right part-time job, students won’t have to worry about college loans and may even show net earnings as a result.
The trickier aspect is at the secondary school level. While everyone might not be able to be homeschooled, what if school districts offered students the option to go to school at home?
For smaller school districts, this might make more classes available to students. In the past, if not enough students enrolled in a particular course, that course would not be offered. By making the course available online to multiple districts, the chances are greater that the class will meet the minimum enrollment requirements.
Where is the entrepreneurial opportunity for you?
If you have a niche hobby that represents a small slice of a broader curriculum, you might be able to provide online sessions, workshops and even interactive learning experiences. For example, astronomy is but a tiny subset of Earth Science, and few high school teachers have a formal education in the subject.
If you do, and you can get your hands on the curriculum requirements of your state, you can create a package teachers can use (assuming their districts will allow them to buy it).
#3: New types of sports, entertainment and leisure activities.
Despite the safety of social distancing, humans, being human, will always have a need for human interaction. Think of how you socialize (outside of work). You watch sports, go to movies and go out with friends.
Social distancing has cancelled and postponed sports and made attending social events a risky proposition.
It is in this category that we find the highest potential as well as the most relevant existing examples.
Here’s an idea you can’t do but might offer you a template. The NCAA’s March Madness basketball tournament has been postponed.
What if the relevant colleges and broadcast networks got together with Take-Two Interactive and created a customized version of their basketball video game. They could then air simulated games as if it were the actual tournament.
You could do the same thing with an online game that allows you to play and record. People are already doing this, but it doesn’t yet have the broad appeal that the NBA and NHL have. If you can package even a neighborhood league, you can begin to attract your own audience.
Have you always wanted to own your own sports team? Now’s your chance.
The same thing applies to your long-standing desire to produce TV shows and movies. With live TV shows going dark and movie theaters empty, get your director’s chair ready!
It’s easier now than it has ever been to start your own YouTube channel or podcast.
Do you see a market that you enjoy and no one is yet serving? This represents a prime-time opportunity for the budding entrepreneur.
Yes, you aren’t alone if you see the current reaction to the coronavirus as socially disruptive. It is.
Don’t look at this period as a “glass half-empty” time.
Put your thinking cap on and see it as a “glass half-full” occasion.
Remember, “In the midst of chaos, there is also opportunity.”
Seize this day. Become a Coronapreneur.
source: forbes
