The Challenges and Opportunities of COVID-19 for IoT and Innovation
Zone Leader Cate Lawrence considers the effect that COVID-19 will have in the growing technological hub of Berlin, specifically in IoT.
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COVID-19 has hit globally with a reach and scale far beyond what we could ever have imagined. Besides the significant impacts our health and that of our families and friends, how we live our daily lives has shifted. Our home is no longer a haven but a powerhouse of work, leisure and childminding and everything in between.
I live in the city of Berlin, a city that is a mish-mash of innovation adverse and innovation when it comes to daily life (despite whatever attestations you here about Germany and efficiency). Before COVID-19, cash was king. Faxes and posts were still commonplace when it came to dealing with healthcare and government officials — OK, you mostly had to submit paperwork in person. GDPR and privacy are prioritized over digital tracking (stay tuned for an additional article expanding on this). It may be 2020, but the ICILS (International Computer and Information Literacy Study) in 2019 found that only 26.2 per cent of young people in Germany attend a school where both teachers and students have access to a WiFi network. This puts Germany behind the international average of 64.9 per cent.
The City of Startups?
Juxtapose the digital aversion with the tech sector in Berlin, which includes over 1,500 startups with a new company formed in Germany every 20 mins — including over 59 blockchain startups, a myriad of incubators, accelerators and other infrastructure. There are over 100 coworking spaces filled with freelancers, artists, writers, and other creatives. You can spend an afternoon talking to someone about automation and robotics, then be scrabbling for change because a store is cash-only. Or be searching for a post office to send something by post as it's not legally binding via email (I even had to resign by post at a startup). It's a city historically averse to card (or contactless payments) and digital communication. Germany puts security and privacy first, at least online.
COVID-19 Drags Service Industries into Digitization -Whether They Like it or not
As someone who is wildly passionate about IoT and emerging tech, it's been interesting to see some of the basic boots-on-the-ground changes in the city from COVID-19 that have happened super fast. I now see a plethora of restaurants and retailers that are offering digital food and goods pick up and delivery platforms. Cash is being eschewed for digital payments. Admittedly, these are small shifts when it comes to real innovation — we're not talking about delivering by drones, autonomous vehicles or robots — but it's a significant shift culturally.
Germany's version of the CDC, the Robert Koch Institute, has teamed up with health tech startup Thryve to develop an app called Corona-Datenspende (corona data donation). The app works with a range of smartwatches and fitness wristbands from companies like Apple, Fitbit, and Garmin. User information collected by the app includes various automatic or manually recorded activities like walking, exercise and rest; blood pressure, heart rate and temperature; and socio-demographic data such as age, gender and weight.
What Does COVID-19 Mean for Startups?
But what is the impact on the bigger startup sector? A new study by Bits & Pretzels, a German founders' festival, reveals that 65 per cent of German startups predict they'll run out of cash within the next six months. In a survey of almost 1,000 entrepreneurs, 52 per cent indicated that they expect sharp revenue falls within the next three month. About 40 percent of entrepreneurs in later-stage startups said that they are still able to go for another seven to 12 months. The figures aren't certainly unique to Germany but offer an insight into the challenges impacting startups.
Some startup verticals seem to be hit hard by the crisis. Most financial declines anticipated by entrepreneurs are in mobility (85 per cent), education (80 per cent) and proptech (67 per cent) verticals. In response, 50 pe rcent of respondents have implemented short term work, immediate governmental aid and loans. Entrepreneurs, health and wellbeing, and fintech are predicting an increase in revenue moving forward.
Challenges and Opportunities for IoT
Obviously, IIoT will suffer until factories can go back to work. Manufacturing and automotive sectors have downed tools. Supply chains are significantly delayed. The IDC recently released a report detailing COVID-19's expected impact on the semiconductor industry. It suggests an 80 per cent chance of significant contraction in semiconductor revenues. IDC further estimates that year-over-year revenue growth for the semiconductor market would be around -6 per cent in 2020.
Encouragingly, the IDC release suggests that companies should continue to focus on advanced technologies such as 5G, IoT, and edge computing in order to rebound post-crisis. Achim Granzen, a principal analyst at Forrester, told FutureIoT the postponement of the 2020 Olympics Games is a blow for IoT providers who have developed new IoT solutions that are to be used during the games.
But we've also seen a plethora of examples of speedy innovation. In Germany, Bosch developed a diagnostic test that can be used directly by all medical institutions. Rapid tests in six weeks can detect a SARS-CoV-2 coronavirus infection in patients in under two and a half hours. It's one of the world's first fully automated molecular diagnostic tests and is measured from the time the sample is taken to the time the result arrives. It can be performed directly at the point of care, eliminating the need to transport samples, which takes up valuable time. With the tests currently in use, patients must usually wait for one to two days for a result.
It's unclear how many of the digitization efforts of the last few weeks will remain after the COVID19 lockdowns start to clear. It's equally unclear how many products being worked out by startups will be deemed superfluous or unnecessary. Will health tech — despite its long lead times, robust testing and delays to deployments lead the pack? Will the gaping holes in digital education in places like Germany lead to a (funded) revolution of digital transformation? Will we be back by 2021, talking about all these issues at MWC or CES? Only time will tell.
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