The Economy post-COVID

  • techUK techUK
    Friday12Jun 2020
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    In the eighth webinar in our series techUK discussed the impact of COVID-19 on the economy and how we can recover

COVID-19 is first and foremost a health crisis, with Government’s around the world taking steps to reduce the spread of the virus by closing offices, businesses and keeping people apart for their own safety.

As a result of these restrictions on our ability to meet, share ideas and buy and sell products and services COVID-19 has caused an unprecedented economic shock on both the supply and demand side. Therefore, a second crisis, an economic crisis, now weighs heavily on the minds of Governments.

In the eighth webinar in our series on the world post COVID we explored what has happened to the tech sector as a result of this unprecedented economic shock, and discussed how we not only seek to build an economic recovery, but a recovery that supports our long term strategic goals such as increasing inclusion and diversity in the sector.

 

On the panel we were joined by four excellent guest speakers:

Philip King – the UK’s interim Small Business Commissioner with a 40-year career including senior credit management roles in the tech and communications sector, as well as distribution and retail.

Priya Guha – a diplomat by trade having served as British Consul-General in San Francisco from 2011–2016. She was the first woman to hold the post and now works as an advisor to high-growth startups, helping corporate innovators bring the future to market. Priya is also a member of the Innovate UK Council.

Orlando Machado – Orlando is Chief Data Scientist at Aviva where he leads a team of data scientists, statisticians, insight analysts and targeting specialists whose aim is to understand customers better than they understand themselves. Learning from vast volumes of data to create relevant and engaging products and experiences.

David Turner – David is Chief Marketing Officer at Sidetrade, an AI B2B service provider that aims to empower marketing, sales and finance teams to grow sales and accelerate their businesses. As Chief Marketing Officer David has been operating at the coal face of the crisis, seeing the impact on his client’s customers and partners.

 

You can watch the full discussion below, and read here our top three takeaways from the discussion:

 

Diversity and inclusion are no longer ‘nice to haves’, they need to become ‘must haves’ to get the recovery right:

Our panelists pointed out that as a result of this crisis underrepresented groups in the tech sector, such as women and people from BAME backgrounds were most at risk of suffering the economic, health and mental health impacts of the crisis. Yet as has been shown in numerous studies, increasing the inclusion of these groups in companies and on boards can have huge growth benefits allowing companies to develop products and services more accessible and relevant to the society that they are trying to engage with.

Our panelists said that achieving our strategic objectives such as increasing diversity and inclusion must be threaded into the economic recovery, not only as an issue of social justice, but also because it will increase the chances that the recovery will be more successful and more equitable. In particular, Priya pointed listeners to two recent studies by McKinsey showing then benefits diversity brings, and the IFS showing that the lockdown will most heavily impact the low-paid, young and women.

The discussion culminated in call to action that businesses should use the crisis as a opportunity not only to rebuild, but to build back better, ensuring that we access all the benefits that including in a plurality of ideas and voices can bring.

 

Cashflow will remain a large problem for business even once the worst of the economic crisis has passed:

Philip pointed out that while we have seen a large injection of financial support from the Government to protect the economy, businesses remain nervous and uncertain.

Cash flow remains a key issue with payments and late payment activity having a large effect on individual businesses and entire sectors, with some businesses cutting back on payments to suppliers until the crisis has passed. This will be a huge issue not just in the near term, but also in the long term. As without shoring up the delivery of cash across the economy many more businesses may fail, and this could constrain competition and growth as the economy recovers.

Cashflow therefore will not only be king as is often said, but as Philip commented in this crisis it will be “King, Emperor and President as we move forward”.

Therefore, to create a healthier business environment that is more resilient will mean businesses taking a more partner centered approach to their suppliers rather than a transactional one, with a changed view of risk. One where risk is seen as a whole supply chain issue rather than just a risk to a single business in isolation. Businesses will therefore need to act accordingly, supporting their partners to in turn support themselves.

 

Digital tech has not only helped us adapt, but opened our eyes to new ways of collaboration:

A strong theme that came across from all panelists was that the ways in which the workplace has changed as a result of COVID-19 has brough benefits that should not be abandoned once we can return to our offices.

David in particular highlighted that his CEO was having more conversations with more staff than ever before as a result of using cloud-based video software. While Priya said that the use of these technologies can help improve inclusion and ensure a more diverse range of ideas make it into business decisions, ultimately improving outcomes.

Pre-crisis the UK had fallen behind other European countries in terms of the adoption cloud computing software. Around 42% of all UK enterprises buy cloud computing services; however the equivalent figure in Finland is 65%, in Sweden 57%, and in Denmark 56%. This kind of bread and butter digital adoption Orlando pointed out was central to making productivity gains and improving business performance.

Many more UK businesses will be using cloud computing and digital solutions in order to continue operating during the crisis. This impetus for digital adoption must not be lost during the recovery and we need to ensure that the new normal means being more willing to leverage the benefits of these technologies.

 

Full video below:

 

 

  • Neil Ross

    Neil Ross

    Policy Manager | Digital Economy
    T 078 4276 5470
  • Sabina Ciofu

    Sabina Ciofu

    Head of EU and Trade Policy
    T +32 473 323 280

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