Growth in Tech During Covid-19
Covid-19 has changed life in a way we have not seen in a century. The population has been scattered, scared, stuck at home, and forced to alter basic social interaction. With any large scale problem or change, there are silver linings. In this case, those in the tech industry can see the many positive changes during this time in the world for the growth of the technological sector.
The global pandemic has forced people to stay inside while locking the doors at the physical locations of offices, retailers, restaurants, gyms, and almost any other establishments deemed “non-essential”. Physical handshakes, appearances in brick and mortar locations, and office interactions may have been reduced or halted; however, the world has not stopped turning. People still need goods and services, and businesses are still trading, hiring is still going on, and so is firing. Not only that, but people still want to see their friends, call their loved ones on their birthday, and be entertained. How do we do this in the modern world when we are told we should stay away from others? The answer is technology.
The most apparent changes resulting from the times have been work and interactions with those we are close to (friends and family). As far as work is concerned, most companies have asked employees to work from home as states and counties have required businesses to do so. With liability and police interaction or fining penalties at risk, most companies have followed these orders. Remote work in the past had a bad reputation. Employers worried their workforce would be easily distracted at home while managers would struggle to oversee them. Studies have shown that remote workers are often more productive at home than their counterparts working in an office environment. Interesting statistics include that employees may take slightly longer breaks working from home, but overall they work more through the entirety of the day. In addition, many workers cite distractions from their bosses at work.
In contrast, others have overall been measured to be more productive during the day, seeing fewer “unproductive minutes” in a day. These past statistics were nice to look at but were not enough to motivate employers to risk their business on what they saw as an unnecessary trial. With the global pandemic, many have found work from home to be effective, to the point that they may not occupy the office’s entirety when life returns to normal, or in some cases, they may not return to their office at all. With this trend continuing, companies have used technology to continue to work from home.
Video Calling – the Way of the New World
According to Facebook’s CEO Mark Zuckerburg, traffic for video calling and messaging has exploded. WhatsApp, a Facebook subsidiary, has seen use volume double. Microsoft has seen numbers soar for online collaboration, increasing as much as 40% in a single week. Entertainment streaming services such as Netflix and its competitors have hurt the movie industry for years. With theatres shut down, their audience has grown drastically. In parts of the world, growth was 66% for Netflix, while the US saw a more modest increase of 9%, which is still drastic.
On the data side, demand has been sought like never before. In recent years, companies have moved away from their own server and file storage services in favor of cloud services from groups like Microsoft, Google, etc. As millions are forced to work from home and technology infrastructures in house cannot meet the new strain on demand, this trend is increasing.
Technology has grown hand in hand with e-commerce during this period. Amazon, who seems to be taking over the economic world, has once again benefitted from current trends. While the company had recently moved into the brick-and-mortar space with the purchase of Whole Foods grocery chains as well as launching stores under its own flag, the company has always been e-commerce focused. To their benefit, United States online sales were up 49% in April 2020 from April 2019. Many consumers are either scared to shop in stores or forced to purchase certain goods online with locations closed. These trends may continue for some time and become habit-forming. A recent survey from this spring found 90% of shoppers hesitant to shop in stores due to the coronavirus, while 45% of those surveyed believed online shopping would be necessary during the crisis. Due to these changes, Amazon is hiring aggressively, to the tune of 100,000 workers to meet surging consumer demand. Bonuses are being offered to bring in warehouse workers, who oftentimes need zero work experience to obtain employment.
Not all effects of the virus on the industry are positive. Cybersecurity has emerged as a threat as almost all interactions have now been moved into the cloud, increasing the threat drastically. While businesses may be more reliant on technology, not all businesses are open, which has killed online advertising for Facebook, Google, etc. Tech companies such as Zoom or Microsoft have benefitted from communication technology need spikes; however, tourism, travel, and social interaction applications such as VRBO, Airbnb, Uber, and others have seen demand disappear. Many of the positives will also be hindered by the inability to deliver products to meet the near term demand. Much of the world’s technological manufacturing occurs in Asia. With this market shut down or in the midst of recovery, goods have been delayed. With demand expected to slow later in the year, this demand may be missed. For example, global forecasts for the growth of demand for hardware and software services are at 5%. However, these same forecasters only see an actual sales growth of 1% due to the disruption of the supply chain.
Many have viewed these changes as being something that was coming to our world regardless; the pandemic has certainly accelerated these trends as a result of the near term reliance on them. Consumers who have tried new services such as video conferences, security systems, or online grocery shopping have been forced out of their comfort zone to try these services, however now that they are using them, they plan to incorporate them into their lives moving forward, regardless of the presence of a pandemic.