Why These Megatrends Will Become Even More Prevalent After Corona

Megatrends such as digitization, automation and sustainability have passed the corona pandemic’s test by fire and have thereby gained even greater momentum. Here’s what lies ahead for business and society.

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“Never let a good crisis go to waste!” were supposedly Winston Churchill’s words as he worked to form the United Nations at the Yalta Conference, towards the end of the Second World War. During the financial crisis of 2008, Rahm Emanuel, the former White House Chief of Staff under Barack Obama, also used the quote during several interviews and discussed in more detail how he understood it: it’s about using the opportunities presented by a crisis and coming to grips with things that had never really been thought about before—because until the crisis hit, they had seemed impossible.

A tiny virus has overturned countless habits, swept away firmly held certainties and subjected the world to a gigantic field study. As a consequence, numerous developments that had been brewing beneath the surface have now suddenly burst forth, in more and more areas. Along with all the disruptions the crisis has caused, it has also had the effect of triggering a surge of innovation in some fields. It is inspiring some long-term trends and is revealing possibilities that hardly anyone dared to dream of before.

For historians and biologists, such processes are nothing new. “Without crises, there’s no development—they strengthen us,” says Gerrit J. Schenk, a researcher who has specialized in crises and catastrophes at the Technical University of Darmstadt. Some biologists go even further and argue that catastrophic moments in nature are even necessary for evolution.

The Corona Pandemic Has the Potential to Go Down in History as a Great Technological Watershed

There are numerous historical examples of this. In the Middle Ages, epidemics such as the plague or cholera resulted in the development and establishment of modern sewage systems. The Great Depression in 1873 helped the tin can make its breakthrough—American manufacturers avoided newly imposed tariffs on imports by selling processed foods. And it wasn’t until the oil crisis in autumn 1973 that renewable energies received a necessary boost in many affected countries.

Many scientists already believe that the corona pandemic has the potential to go down in history as a great technological watershed as well. “The crisis makes future-oriented ways of doing business and living together plausible in an unmistakable way,” write future researchers Harry Gatterer and Matthias Horx in a post-corona study. The network economist Dr. Holger Schmitt dryly describes the upcoming disruption with the following statement: “The economy will look different after this crisis.” And Chief Economist Dr. Fritzi Köhler-Geib at the KfW Group is convinced that a transformation will take hold in small and medium-sized enterprises in particular.

One of the central trends in this is digitization. “Many companies have suddenly been forced to go digital,” Köhler-Geib says. And much of what’s now being tried out will simply remain after the crisis subsides. The fact that digitization is penetrating into ever newer branches of the economy, optimizing processes and opening up new business fields was already part of everyday business even before the outbreak of the corona pandemic. However, the pace of this transformation was comparatively gradual: there were initial struggles with technical problems, internal organizational resistance to be overcome, doubts to be dispelled. The pandemic radically changed all of that. It neutralized the old rules of the game, imposed new ones and then rang in the next round.

Within just a few weeks, it opened the door for hundreds of thousands of potential users who should, could and had to try out new digital applications and business models. New ideas that emerged from existing trends were able to prove their value in practice and anchor themselves in the habits of their new users.

Business models were established very quickly, ones that had been unthinkable just a few months before due to technical concerns, IT hurdles or a lack of demand. Wine tastings are suddenly taking place in virtual wine cellars, a speech therapy session works on FaceTime, the dynamics of contract negotiations unfold even via video conference and certifications or consultations are carried out with the help of smartphone cameras and telephone connections.

The number of people using the Microsoft Teams collaboration software has more than doubled, from 20 to 44 million users. Insurance giant Allianz saw a tripling of virtual meetings and customer consultations in the first three months of the pandemic. A survey found that 60 percent of 18- to 29-year-olds said they plan to continue making more video calls after the crisis. “Many companies are trying out working from home and virtual collaboration, establishing digital sales channels in a time of closed shops and restaurants, or replacing paper-based working processes with digital ones,” Köhler-Geib says.

Once the crisis is finally over, one of its lasting legacies will be a renewed focus on automation.

Leslie Joseph, analyst at Forrester, a market research company

At the same time that these transformations are occurring in offices, a new wave of automation is also taking place in production facilities. “There are tools now available for introducing automation in nearly every profession,” writes network economist Holger Schmitt. It starts with simple automation in offices, continues with smart robots in factories, and ends with autonomous vehicles. The pandemic is now encouraging many manufacturers to relocate production facilities from low-wage countries to closer to home and to rely more on robots and automation.

For instance, BMW placed an order for five thousand industrial robots from Kuka in the middle of the crisis. Providers of service robots, like the Danish company Blue Ocean Robotics, are making strong positive adjustments to their growth forecasts. And the Chinese company ZhenRobotics reports a tripling of orders since the crisis began. “Once the crisis is finally over, one of its lasting legacies will be a renewed focus on automation,” writes Analyst Leslie Joseph at Forrester, a market research company.

Making Things Possible That, Until Recently, Seemed a Long Way Off

A third movement being accelerated by the corona pandemic, along with digitization and automation, is the trend toward sustainability and a net zero carbon footprint. At the end of 2019, the European Union announced the European Green Deal. It’s goal: the entire continent should have a net zero carbon footprint by the year 2050. To put this ambitious plan into practice, the European Commission began discussing a European climate law that is intended to legally enshrine carbon neutrality by 2050.

The corona crisis has given this idea an even greater push and urgency. Under the hashtag #GreenRecovery, scientists, NGOs and companies began calling for a green economic stimulus package just a few weeks after the pandemic broke out. They are calling not only for rebuilding the structures of weakened economic sectors, but also for making them more sustainable in the process. Initial steps in this direction can already be seen. Many countries have passed considerable subsidies for the purchase of electric vehicles. France and Germany have made a joint statement calling for green support plans for all economic sectors and want to create a fund of 500 billion euros for this purpose, including further subsidies for purchasing e-vehicles and support for hydrogen as a fuel source. Even the International Monetary Fund is also insisting on sustainable approaches in its guidelines for allocating development funds for programs after corona.

Even without billions in subsidies, power generation from renewable energies will grow almost five percent this year despite construction delays caused by the pandemic, according to the International Energy Agency (IEA). In total that would mean that renewables account for almost 30 percent of worldwide energy supplies. At the same time, the global demand for conventional fuels for air and road travel is declining, so that global energy-related carbon dioxide emissions will fall by almost eight percent in 2020.

The trend towards sustainable mobility is a major part of this. The management consulting firm McKinsey is predicting that the triumphal march of new technologies such as hydrogen propulsion, electromobility and automated driving will now really gain momentum. Market studies show that the share of electric vehicles could triple by the year 2025. But even hydrogen technology is also becoming increasingly popular. Japan has been converting its energy infrastructure towards hydrogen for the past several years. China also plans to more strongly promote this energy source in the future. And Germany is investing 9 billion euros in the technology as part of a national hydrogen strategy.

While some trends are already clear today, others are only slowly taking on a very rough shape. Yet regardless of whether it’s sustainability, automation or digitization, the most serious global crisis since the end of the Second World War could actually make some things possible that seemed very far off until recently. At least this crisis won’t have gone to waste.

Bild: GettyImages/Westend61
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