14 Jul COVID-19 is accelerating the shift to a Digital Economy
The COVID-19 crisis is an unprecedented disruptor, but it is also a unique catalyst. Over the past few years, rapid expansion in access to mobile technologies and developments in areas such as sensors, big data and artificial intelligence (AI) have increased the many ways that digital technology innovations can make each and every company more resilient. Now, the pandemic is accelerating this global shift to a digital economy, which in turn is helping traditional industries become much more competitive, sustainable, and better positioned to handle future shocks, including pandemics.
Before COVID-19, technology from BC’s tech firms had already been permeating the traditional sectors of the economy. Examples are found everywhere: In forestry with highly advanced tools and sawmills, in mining with advanced sensors and vision, in transportation with clean energy, in retail with high-tech design, in regenerative medicine and personalized healthcare, in mobile financial services, the list goes on.
Since March, technology has helped flatten the curve, and support he recovery process, by enabling people to work and purchase remotely and safely. Artificial intelligence, particularly machine and deep learning, is doing heavy lifting on data science questions ranging from economic recovery modelling to identifying viable antibodies for vaccine production. Technologies such as 3D printing are helping with rapid prototyping and production of face shields. And numerous tech platforms supply brick-and-mortar businesses with diverse options for delivery and fulfillment.
Tech adoption to the rescue
It’s clear that BC won’t be returning to the same pre-COVID world. The Canadian Chamber of Commerce issued a report stating that “the pandemic will change how we live, how we work and how we use technology…An increasingly digital economy will require major investments in sophisticated networks, cybersecurity and electronics. It will also force businesses to adopt new technologies and business models to interact with customers, clients and employees.”
The Business Council of BC has stated “in an era when technological change is refashioning business models and operations across the economy, the province should be looking to support the take-up and diffusion within the business sector of the digital and other information and communications technologies that increasingly are driving growth in all innovative, high-wage economies. It is particularly important to incentivize faster technology adoption in core industries like manufacturing, natural resources, transportation, tourism, retail/wholesale trade and construction as one element of a larger strategy to fuel the productivity growth on which workers’ wages ultimately depend.”
BC’s Emerging Economy Taskforce, meanwhile, concluded that the province ”must build on its strengths in the technology sector and invest further in innovation, as well as facilitate the widespread adoption of innovation and technology across all sectors of the economy in order to improve overall business productivity, increase incomes and enable workers to thrive. Economies with strong home-grown technology and innovation industries have higher rates of technology adoption and capture more of the economic benefit than economies that rely on importing technology from elsewhere.”
Focusing on small business
While the Chamber of Commerce report includes a call for the introduction of “programs, funding and incentives for technology adoption in businesses of all sizes and across all sectors to improve Canadian productivity,” the need for these resources among small and medium-sized enterprises (SMEs) is particularly acute. For one thing, these businesses tend to operate in sectors such as food services, tourism, recreation, and arts and entertainment, all of which have been disproportionately decimated by pandemic-related social distancing, business closures, and dwindling consumer demand. For another, they tend to be more financially fragile than larger companies. And SMEs make up 98% of BC businesses and 44% of BC jobs – the foundation of our economy.
By 2022, over 60 percent of global GDP will be digitized. The World Economic Forum estimates 70 percent of new value created in the economy over the next decade will be based on digitally enabled platforms. There is an opportunity to help shape the future of BC and the international competitiveness of all its sectors by supporting technology adoption across the economy and throughout the province – and BC’s tech community is positioned and ready to help.
A call to action
Eleven organizations representing the tech ecosystems of Vancouver Island, the Lower Mainland, Interior BC and Northern BC– collectively the ScaleUp BC partners – came together in April 2020 to propose a $6.4 million economic response plan for BC to immediately support SMEs in technology and non-technology sectors.
Leveraging more than two decades of building the BC innovation ecosystem, the ScaleUp BC partners are uniquely positioned to rapidly deploy support across the entire province so firms can get the help they need regardless of where they are based. Non-technology SMEs face the greatest challenges in adapting to the new economic realities presented by COVID-19. Adoption of technology is in many cases critical to the survival of their businesses and the jobs of their employees.
The ScaleUp partners have access to the resources, structures, experience and governance to deliver value to the economy immediately and are ready to launch within weeks. The initiative will provide support to more than 1100 Small Medium Enterprises (SMEs) in the next 9 months. Through programming and physical facilities, ScaleUp BC partners provide the underlying infrastructure to support the tech ecosystem and ensure that SMEs who have seen their business struggle due to COVID-19 can access programs so they can adopt technology that is critical to the survival of their business.
History has shown that bold interventions not only mitigate the damaging social and economic effects of crises, but can also lead to positive change. Now is the time for this kind of initiative, vision, and courage.