This is the latest installment of my ongoing series of discussions with entrepreneurs, venture capitalists and corporate leaders on what to expect as the world recovers in the post-Covid era in terms of technology and innovation.
The post-Covid era is leaving a business landscape that looks quite different than it looked a year ago. The work-from-home mandates, for example, may result in much smaller and emptier corporates offices. A lot of work will be conducted flexibly, from homes or remote locations. Accordingly, “we believe companies that leverage digital technologies to automate the white collar economy will generate the biggest impact,” says David Blumberg, founder and managing partner at Blumberg Capital, based in San Francisco.
This will happen as a result of the convergence of big data and artificial intelligence and integrating IT “more deeply and broadly into healthcare, transforming the automotive industry from product to service, democratizing financial services, building data businesses with rising barriers to entry, orchestrating and simplifying cybersecurity operations and innovating in new domains such as deep tech, IoT and drones,” Blumberg says.
Likewise, such major industries have been untethered from core city locations and are seeing a dispersal across the land. Places such as Silicon Valley could become more of a state of mind than actual locations.
“We’re seeing many businesses that previously only existed on Wall Street and in major coastal metros starting to emerge in the Midwest, and smaller, more nimble companies able to provide direct, effective and measurable services at scale in communities that in the past couldn’t support them,” observes Dave Klemencic, vice president of digital strategy and operations at Smith Kreoger, a digital advertising agency based in Omaha, Nebraska.. “Financial services, education, automotive and home services are among those finding new opportunities, and those that had started the adaptation process sooner are much better positioned in the new world.”
Going forward, we’re likely to see industries become less centralized, more highly decentralized to where innovators and entrepreneurs choose to live and work. “Barriers to entry are about to come tumbling down to some of the most traditionally inaccessible markets, including multi-trillion-dollar sectors like telecoms, automotive and financial services,” says Angus Ward, CEO of Bearing Point Beyond, based in Amsterdam. “Cloud, AI, edge, digital business platforms and IoT represent just a handful of the technologies coming to functional maturity. The combination of all these technologies enables small and medium businesses and large corporations to create truly platform-driven business models – opening access for innovators.”
The past seven months have seen digital transformation go into overdrive, and the pace will only keep increasing, Klemencic says. “Businesses that were already overcapitalized will only struggle further against burdensome debt, while startups staffed with seasoned professionals are finding a new chance to differentiate themselves with a higher level of service.”
Digital marketplaces are an example of the new opportunities emerging. For example, Ward illustrates. “New, platform-based business models and marketplaces create a true win-win for ultra-large corporations and innovative companies of all sizes, catalyzing economic growth. It’s a genuinely exciting time for technology innovators, and traditional laggards, and is in stark contrast to the prevailing economic narrative.”
At the same time, a shakeout of industries is happening, creating both pain and opportunity. “Despite downward pressure on many industries and lines of business, we’ve also seen opportunities emerge in unexpected places,” Klemencic says. “Covid-19 and the broader recession have shaken out bad business models, but the shaking is only starting. At the same time, for players that can be nimble, responsive and carefully husband resources, there are endless possibilities to help businesses get back on their feet. While it’s been preached for a decade or more, a true customer-first approach is more critical than ever. Focusing only on the bottom line might mean very soon that there will be no bottom line.”