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September 10, 2020

WEF: Pandemic recovery “needs to focus on transformation”

By Ellen Daniel

Transformation should be at the heart of post-pandemic recovery, according to industry experts.

Speaking at Tech Nation’s Unlocking Global Tech virtual event, head of Europe and Eurasia at the World Economic Forum (WEF), Martina Larkin outlined the importance of digital transformation.

“We should not underestimate the historic significance of the situation we’re in at the moment. The world will look very different when we move out of this current, urgent situation of the pandemic,” she said.

As countries slowly move out of lockdown, Larkin said that the economic situation is “perhaps not as terrible as it could be” but it is also “very clear that it won’t improve very fast”.

Larkin explained that despite many nations in Europe putting forward recovery plans, and the EU itself introducing a €750bn plan, it is clear that the road to recovery will not be short, with most estimates expecting European countries to be back to pre-crisis levels by 2022.

Facing and asymmetrical pandemic recovery

Larkin said that this recovery will also be “asymmetrical“.

“One specific aspect of the pandemic is the uncertainty of the longer-term impact. We’re seeing an uneven recovery, stock markets are going up but the situation for SMEs and employment is going down,” she said.

“We can see a very asymmetrical coronavirus recovery across Europe due to the big differences in national budgets. The speed and shape of the recovery will depend on the consumption patterns and the consumption resuming.

“In essence this means that most countries in Europe will lose about two years and the measures that are decided now are of course very decisive for the future.”

Business as usual unlikely

What is clear is that a return to business as usual grows increasingly unlikely. The pandemic has seen numerous organisations from across industries accelerate their adoption of digital technologies, be that in how employees work or how services reach customers.

According to research by CCS Insights, two thirds of the 730 senior executives surveyed expect to increase IT budgets in 2021, despite a recession.

Larkin explains that tech must be at the centre of the recovery.

“Overall the recovery needs to focus on transformation. The digital transformation, energy transition, training and skill building, especially for young people,” she said.

“The common message here is that the recovery cannot be a restart…we need to have some creative disruption in our economies and entrepreneurs and innovation will have a critical role to play in this process.”

Tech Nation’s Unlocking Global Tech Report revealed a 68% growth in UK global tech exports, and 35% further growth prediction by 2025. In fact, Tech Nation’s CEO Gerard Grech argued that “UK founders, government and industry leaders should all be gearing up to double tech exports by 2025, in the aftermath of both the pandemic and Brexit”.

Larkin believes that it is important for innovative businesses that are driving this digital transformation are given adequate support in order to survive the pandemic and its aftermath.

“Even before the pandemic we were in the midst of a transformation of businesses like the digital green transition. Now those businesses are suffering from the Covid-19 effects,” she said.

“There are those businesses that don’t have a business plan and haven’t really adapted to this new reality and then there are those that have. But no country will be able to finance all companies which are in trouble at the moment and countries will need to make strategic decisions which businesses and industries they want to rescue.”

She also emphasised the need make the most of the opportunity to create a greener economy, with tech at its core.

“We also need to decarbonise the environment to create a green economy. I believe that one of the big winners of the Covid pandemic could be the environment. We also need to look at technology solutions and how we create the necessary ethical and human principles to guide the use of these technologies.

“We need to define the digital tools, the digital skills and policies that are needed in this context. These are all very important priorities that we need to have in mind when we guide our re-think which is required to shape a better future because it is very clear that the world will not go back to the old normal.”

Read more: From survive to thrive: Digital leadership beyond lockdown.