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COVID-19, a stimulus to the digital economy

Companies, countries and civil society will come out of the coronavirus crisis
economically weaker but much more digitised than before. Seven cases prove it.

Virtual leisure

On 25 March, Lina celebrated her 33rd birthday. She broke open a bottle of champagne and was toasted by her loved ones, all via screens. Due to the lockdown, Lina was forced to organise remote birthday drinks, using a video conferencing app such as Skype, Zoom or Instagram. “I didn’t want to celebrate my birthday alone,” says Lina. “Obviously this isn’t as good as seeing everyone in person, but we did the best we could.” And she is not the only one. Thanks to the COVID-19 crisis, virtual aperitifs are the latest trend, known by names including “coronapéro”, “e-apéro” and “skypero”, from the French abbreviation apéro.

“We’ve moved on from a time when digital was one option among many to a time when it is the only possible option,” explains Olivier Glassey, a sociologist specialising in digital trends at the University of Lausanne. “Being forced to embrace digital has accelerated the public’s learning process and made using digital tools the new norm. We now see grandparents, who were previously reluctant, talking to their grandchildren on video conferencing platforms. And once people have learned to do it and it has become normal to do so, it is highly unlikely they’ll stop using these digital solutions.”

All kinds of leisure activities are going virtual, from yoga and dance classes to a museum visit from the comfort of your sofa. The list is endless. Of course, the activities which are lesser substitutes for real social activities will disappear once the crisis is over. “E-aperitifs, for example, are important to people now, but I can’t see them lasting once the bars and cafés reopen,” says Glassey.

However, the apps which have really shown their worth will remain. “The crisis will reinforce the trends which we were already seeing in society,” explains Julien Leegenhoek, an equity analyst specialising in the tech sector at Union Bancaire Privée. “Netflix is a very good example. Many people didn’t really know much about video streaming, or hadn’t taken the time to subscribe. However, with the lockdown, they have taken the plunge, and now they have started, it is unlikely they will close their account when the pandemic is over. In this way, the crisis is going to speed up the disruption of traditional television.”

The same applies for e-commerce. Fearful of catching the virus at the supermarket, consumers have rushed instead to online shopping sites. In March, in Switzerland, LeShop.ch, coop @ home and Digitec Galaxus saw an unprecedented leap in orders which led to unheard-of delays in delivery. Amazon announced it was recruiting 100,000 people to manage its logistical chain, an increase of 12.5% of its total workforce.

“That’s huge,” says Leegenhoek. “In many sectors, such as video and music streaming (see the March 2020 issue of Swissquote Magazine), e-commerce and video games, the pandemic will bring about a massive increase in the public’s use of digital services. The market was right to invest in these sectors, as these shares here have held up better against the stock market crash than others.” One example is Netflix, whose shares were valued at $325 at the beginning of January and had reached $395 by 14 April. To help monitor this type of stock, in February the American investment company MKM Partners created the “Stay at Home Index”, a stock index listing approximately 30 companies that are benefiting from the lockdowns taking place around the world.


Activision Blizzard (video games), Amazon (e-commerce), Blue Apron (meal deliveries), eBay (e-commerce), JD.com (e-commerce), Match Group (online dating), New York Times (media), Slack (instant messaging), Zoom (video conferencing), Zynga (online games).

Rapid robotisation

While part white collar workers have been able to continue working during the lockdown, the same can’t be said for manual workers, the majority of whom have found themselves furloughed due to factory closures. On 26 March, this was the case for nearly 570,000 employees in Switzerland, 11% of the country’s workers. “Business owners have realised that they can’t risk another halt in production if they want to keep their place in the supply chain,” says Duncan Turner, a robotics expert at HAX, an accelerator based in Shenzhen. The result: the crisis will be a trigger for an increase in the robotisation of industrial sites, in particular in “the world’s factory”, China.

The concept is simple: if there are no humans, there is no risk of a factory’s business being interrupted during a health crisis. In 2018, Swiss company ABB installed 11 robots in the Shanghai factory belonging to the American group Hella Electronics, to make keys for electric cars. Eike Christian Meuter, an ABB spokesperson, has proudly stated how this production line was able to continue operating throughout the COVID-19 epidemic with virtually no human intervention required.

In the coming months, sales of robots will rocket. “We have received a record number of calls to tender for new projects,” says Emil Hauch Jensen, VP of sales in China for the Danish company Mobile Industrial Robots. Even before the epidemic, China was well on its way to automation, in particular in the electronics, automobile and logistics sectors. China alone was responsible for 39% of new industrial robot installations in 2019.

“In China, they have an ageing population, salaries are rising and young people don’t want repetitive jobs on assembly lines,” says Jenny Chan, a sociologist from Hong Kong specialising in the Chinese manufacturing sector. “This is forcing Chinese companies to turn to automation.” Foxconn, one of Apple’s main suppliers, says it has already replaced 400,000 workers with robots.

ABB dominates the sector, alongside German company Kuka, Fanuc and Yaskawa Electric in Japan, and a horde of Chinese start-ups. In 2019, the Swiss group began construction of a new factory in Shanghai which will produce intelligent robots capable of making decisions autonomously, detecting anomalies in production and collaborating with humans.

However, the epidemic itself has also created new opportunities for robot manufacturers. Robots made by Pudu Technology, a start-up in Shenzhen, are being used in around a hundred hospitals in China, Hong Kong and South Korea. “They can give medicine or food to patients, avoiding contact between humans and therefore the spread of the illness,” says Ben Zheng, the company’s marketing director. That also frees up healthcare staff, who can be assigned to more crucial tasks.

Turner also highlights Youibot and iSmart, two more start-ups located in Shenzhen which have created robots that can disinfect a room and sterilise hospital floors using an extremely powerful ultraviolet light. Other companies have developed machines which can take patients’ temperatures or take samples from the throats of those suspected to have the virus, ready for testing.

Many of these firms hope to continue to capitalise on these advances after the epidemic. Youibot has already signed a contract with a manufacturing group in Suzhou, near Shanghai, which wants to use their robots to disinfect its factories. As for Pudu Technology, it hopes to sell its robots to restaurants, marketing them more hygienic than human waiting staff and able to fill in during staff absences.


ABB, Midea (owner of Kuka), Fanuc and Yaskawa Electric, which all make industrial robots.

The home office becomes the norm

“Until now, working from home has been the exception rather than the rule in companies, however, the coronavirus crisis is going to change that,” says Olivier Glassey . “If homeworking proves to be effective during the lockdown, it could suddenly seem a lot more interesting to bosses.”

Julien Leegenhoek, equity analyst specialising in the tech sector at Union Bancaire Privée, agrees: “Once the pandemic is over, companies will ask themselves what they would do if that was to happen every year. Companies need to transfer all their activities onto the cloud, as experts have been advising for the last five years. Homeworking version 1.0, i.e. having a computer at home, is not enough. All software needs to be available online. This kind of decentralised organisation is going to increase after the crisis, as it is more flexible, less expensive and more efficient.”

An opinion shared by Arturo Bris, professor of finance at the IMD and an expert in digital transformation: “The crisis will make people realise they can work from anywhere. In the long term, the very concept of a headquarters will become obsolete.”

This migration will obviously benefit cloud giants such as Amazon Web Services, Microsoft Azure and Google Cloud, but they are not the only ones. The many companies developing dedicated software, such as Salesforce (sales and CRM software), Workday (human resources and finance) and ServiceNow (IT) should all benefit too. “In the United States alone, there are more than 150 companies active in the field of cloud computing,” says Leegenhoek. “Their combined capitalization exceeds that of the CAC40, the flagship French stock market index, which is enormous.”


Alibaba, Alphabet, Adobe, Amazon, Everbridge (crisis management), IBM, Microsoft, Oracle (company software), Sage (software), Salesforce (software), SAP (software), ServiceNow (software), Shopify (e-commerce for companies), Workday (software).

Virtual medicine finally prescribed

It has been a giddying rise. Between 1 January and 31 March, Teladoc Health’s share value increased by 100%, from $80 to $160. The largest virtual healthcare company in the United States, this New York-based company offers the possibility of consulting your doctor online and obtaining a prescription without getting up from your sofa. Due to the increased risk of spreading coronavirus that comes with visits to the doctor’s surgery, the number of appointments which took place on Teladoc’s platform in the second week of March was up by more than 50% year-onyear, with as many as 15,000 visits requested per day. And the same is happening in virtual healthcare services around the world.

In France, the number of consultations that took place on the Doctolib platform was 100 times higher on 30 March than on 5 March, and in Switzerland, several start-ups are stepping into the breach. These include Bern-based eedoctors, which has extended the use of its virtual doctor’s surgery to family doctors, hospitals and other health centres.

“Virtual healthcare isn’t new, it is a subject that has been cropping up since the mid-1990s,” says Julien Leegenhoek, equity analyst specialising in the tech sector at Union Bancaire Privée. “Until now, both patients and doctors were reticent about the idea of doing consultations online. The crisis has shown that in fact this can relieve physical health services and reduce the risks of spreading the virus. What is more, virtual consultations are possible 24/7.”

This move towards virtual healthcare is unlikely to slow down after the pandemic, as healthcare systems are largely in favour of this type of service, which reduces health costs. “Because of coronavirus, we’re going to leap forward 10 years in the development of virtual healthcare,” predicts Doctor Jean Gabriel Jeannot, writing in Le Temps newspaper.

Elsewhere in the scientific domain, Schrödinger, a company which offers a platform allowing virtual testing of the therapeutic effectiveness of a molecule by bringing together physics-based modelling and machine learning, is also benefiting from the crisis. Its technology allowing virtual clinical testing should accelerate the rate at which medicines are developed.


Schrödinger (digital chemistry), Teladoc Health (virtual healthcare), NextGen Healthcare (virtual healthcare).

The adoption of blockchain

The digitisation of work and leisure brought on by the coronavirus crisis is likely to lead to the adoption of blockchain technology, in companies and in society more generally. “The decentralisation of exchanges makes it necessary to be able to carry out secure remote transactions, which is exactly what blockchain offers,” explains Arturo Bris, professor of finance at the IMD and co-author of Block change! How to survive the crypto economy (2018, TROI Studio/ IMD). “When two companies or two individuals do business online, blockchain technology allows each party to be sure that the other will honour their obligations, without requiring third party certification. With the increasing digitisation of society, the use of blockchain solutions is going to accelerate.”


EOS, Ethereum, Cardano, Neo, XRP, Stellar Lumens and all the cryptos that facilitate smart contracts and decentralised applications.

Surveillance becomes widespread

At the end of February, the Chinese authorities – in partnership with digital giant Alibaba – rolled out powerful digital tools to help stop the epidemic. Locating individuals via the GPS tracking system on their smartphones, using facial recognition cameras and carrying out obligatory temperature checks allowed the Chinese authorities to quickly detect coronavirus carriers, as well as identifying those with whom they had been in contact, drastically and rapidly shortening the chain of infection.

“It is clear that these technologies can help in the fight against coronavirus,” says Arturo Bris, professor of finance at the IMD. “They have been used well to help halt the epidemic in China, Singapore and South Korea” – a strong incentive for countries around the world to follow suit. In Switzerland at the end of March, the Confederation asked Swisscom to identify locations where there were 20 or more SIM cards in a 100 m x 100 m space, in order to ensure that people were respecting the rules of the lockdown. Data provided by telephone operators has also been used in Italy, France and Great Britain. “I’m surprised by the amount of data collected and stored during this epidemic, but we need to go further in its analysis,” continues Bris. “Investments in artificial intelligence and big data analytics are going to increase after the pandemic, in order to improve how this data can be used.”

Many countries, including France, Belgium and Spain, have also used drones to ensure people are respecting the lockdown rules and to disperse anyone not adhering to them. So far, the cameras used in Europe have not made it possible to identify individuals in real time using facial recognition, but that is not the case in China.

“With each crisis we redefine what is considered as acceptable,” explains Olivier Glassey. “We are currently living in an extraordinary time and the authorities are expanding the limits of what is considered acceptable in terms of surveillance. The question is whether this Pandora’s Box will be closed again, once the crisis is over.”

However, history tells us that emergency measures tend to become the norm. “Even when infections from coronavirus are down to zero, some data-hungry governments could argue that they need to keep the biometric surveillance systems in place because they fear a second wave of coronavirus, or because there is a new Ebola strain evolving in central Africa,” warns Yuval Noah Harari, in a piece published in the Financial Times on 20 March. “The coronavirus crisis could be the battle’s tipping point. For when people are given a choice between privacy and health, they will usually choose health. [But] this is a false choice. We can and should enjoy both privacy and health.”


Apple, Alphabet, Alibaba , Baidu (internet), IBM, iFlytek (facial recognition), Hikvision (video surveillance), Dahua Technology (video surveillance).

5G restored to favour

The news caused a stir: at the end of March, at the request of the European authorities, YouTube (Google) and Netflix reduced the bandwidth usage of their services, and entertainment giant Disney saw the launch of Disney+, its video streaming platform, delayed in France, also at government request. The aim was to reduce pressure on the network in order to avoid saturation. “While China and the United States are competing to win the 5G race, Europe has fallen behind,” says Arturo Bris, professor of finance at the IMD. “The crisis has made the old continent realise that the 4G network was reaching saturation point and that we needed this technology. Its rollout is going to be sped up after the pandemic.”

Indeed, the uproar originally provoked due to the alleged harmful effects of 5G has died down, replaced in public debate by the pressing need to put in place a more robust network (see the July 2019 issue of Swissquote Magazine).

So much so that Beijing is sparing no efforts in trying to persuade western governments to adopt Huawei’s 5G networks. Targeted by American sanctions, the Chinese company has offered more than one million face masks to Spain, 800,000 to the Netherlands, 200,000 to Italy and 12,000 to Poland. “We won’t forget the countries who helped us,” was the response of Italian Foreign Affairs Minister Luigi Di Maio. Huawei is also telling European hospitals it can improve their connectivity, at a time when their current networks are overloaded.

However, in a blog, Josep Borrell, high representative of the European Union for foreign affairs, warns: “We must be aware there is a geo-political component including a struggle for influence through spinning and the ‘politics of generosity’.”


Ericsson, Cisco, Nokia, Samsung, ZTE, all active in the rollout of network infrastructure.

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