The short-term consequences of the new coronavirus are quite noticeable. The slowdown in the economy due to the pandemic impacts investment decision-making, business development and technological projects. The trend towards digitalization is now inevitable and sectors such as health, education and finance must adapt to new technologies.

The Covid-19 pandemic will have consequences on the economy, politics, society and business decisions. Companies had to quickly migrate to teleworking, modify their processes and accelerate digitalization.

In Latin America the percentage of companies with Internet access exceeds 85 percent, according to a study by the Economic Commission for Latin America and the Caribbean (ECLAC) and the Development Bank of Latin America (CAF). However, the percentage of companies that use electronic banking barely touches 34.20 percent in Peru while in Colombia it rises to 95.39 percent. Meanwhile, the percentage of those that purchase inputs through the Internet ranges between 15.20 percent in Peru and 66 percent in Brazil, the report indicates.
The report indicates that, in general, Latin America is characterized by not having shortcomings in terms of mature technological adoption but rather in the assimilation of technology in production processes, particularly in supply chains. Therefore, it encounters challenges in terms of disruptive technologies that facilitate intelligence, autonomy, cloud computing and analysis of large volumes of information.
In Argentina there is a primary state of maturity of digitalization, with some companies advancing in this concept and others still lagging behind. The coronavirus highlighted the need to incorporate more technology into processes, invest in developments and reinvent ourselves.
The coronavirus pandemic forces the most affected sectors to digitize and undertake new projects. Mandatory social isolation in Argentina changed the way companies work daily. Before the outbreak of the coronavirus, 65 percent of companies did not have employees teleworking while today 42 percent have more than half of their staff working remotely, according to a survey carried out by IAE Business School of the Universidad Austral.

But digitalization can also be seen in other spaces. For example, the film industry quickly turned to streaming services to release new films and theaters began to broadcast their works in digital format. SMEs, meanwhile, turned to electronic commerce to be able to market their products and payments for services through electronic channels expanded.

Digitalization accelerates

In the midst of mandatory social isolation, there are figures that show that digitalization has begun to accelerate although, in general, investment in information technologies in all productive sectors in Latin America is expected to contract by $15 billion this year, according to IDC.
There are some lights in the Argentine market. Electronic commerce, for example, will experience an expansion that will reach figures that were expected for 2025 about four years earlier. By the end of the year, this type of trade is expected to reach 10 percent, a figure that was only estimated for 2025. By 2021 it will reach 20 percent in Argentina and, in developed countries, 30 percent. Before the coronavirus, electronic commerce represented two percent of total retail trade, according to Indec data.

This also promoted the use of digital tools to make purchases and pay bills for public services, connectivity and entertainment. Data from 4Finance indicates that, since the beginning of the quarantine, in-person payment has been reduced from 60 to 30 percent while bank transfers have increased to 50 percent and digital media has reached 20 percent.
In health, meanwhile, the use of tools such as video calls expanded to attend to medical consultations, follow psychological treatments and even monitor patients infected by Covid-19.
IDC estimates that in the short and medium term, after sending employees home, growth in demand for software, unified communications tools and collaboration software is expected. This will be followed by virtualization, cloud, connectivity, Big Data, Analytics and security solutions.

The next step: IoT

The FIEL Industrial Production Index (IPI) registered a year-on-year decline of 6.4 percent in March in Argentina. This means a contraction in production of 0.9 percent compared to the month of February. With factories closed due to fear of contagion of the new coronavirus, expectations are not favorable for the following months.
Industry 4.0 is the concept that encompasses the digitalization of industrial activities, robotization and the use of Internet of Things (IoT) technologies to accelerate processes and delegate manual tasks to factories. The use of technologies would allow jobs to be reduced inside factories, leaving humans in higher-value positions, with benefits in efficiency but also in reduction of human contact, benefiting programs to reduce transmission of the virus.
IoT can also be used in the health field for process automation tasks, but also for prevention and monitoring of coronavirus patients. There are even devices capable of capturing information on the temperature of patients and transmitting information to health professionals. In China, meanwhile, where the new virus was born, the government was using robots connected to the new 5G mobile network to control the epidemic.
In a context of strong global economic contraction, the new coronavirus presents an opportunity to invest in the digitalization of processes. After the pandemic, teleworking will expand and automation and IoT will appear as immediate solutions to avoid crowds and human contact. The pandemic invites the most affected companies to reinvent themselves and find in their technology and connectivity providers the solutions that allow them to be more flexible in a challenging context.

Fibercorp