If asked to encapsulate the coronavirus crisis in a single word, ‘disruptive’ might be the most appropriate choice.
The outbreak has impacted the life of everybody on earth, changing how we work, exercise, socialise, shop, manage our health, educate our children and take care of our families. Few events in human history can lay claim to such disruptive potential.
The question is: how do we respond to such unprecedented disruption? Do we put our lives on hold, wait out the storm and hope to return to normality once the disruption subsides?
How do we respond to such unprecedented disruption?Or do we adapt, innovate and find new ways new of tackling the situation at hand? Herein lies the paradox of disruption. In order to conquer disruption, we must be disruptive.
Key Points
- Disruption has a lot of currency right now
- Many more people are working from home
- Play at home has also become a significant issue
In the world of business, disruptive companies are those that are able to innovate and create new markets that challenge existing business models.
These qualities are now more important than ever, and a handful of companies and sectors are beginning to show their disruptive mettle by responding to challenges thrown up by the crisis in new, highly creative ways.
Technology gain
The first place to look for such disruption is in the digital economy, which, during the crisis, has been shaped by one trend in particular: working from home.
Over the course of the pandemic, the UK, for instance, has seen a 10-fold increase in the number of people working from home, and those companies able to adapt and shape new patterns of consumption are winning out.
Zoom is perhaps the most well-known success story. Overnight, Zoom became the go-to video communication platform for millions of new ‘everyday’ users, including school and college students, church and concertgoers, and families and friends looking to connect while subject to social distancing measures.
Its year-to-date share price has doubled as a result.
Companies are also doubling down on the use of video communication software, compounding growth in this market. Alongside Zoom, platforms such as Microsoft Teams, Google Hangouts, and Skype and Cisco Web-ex seem to be the preferred choice of video conference platform for many companies.
Microsoft’s Teams platform with multi-application integration has been the standout performer here, gaining more than 12m daily users in a week, representing a jump of 37.5 per cent.
But video communication companies are not the only ones to benefit.
The cybersecurity market has grown significantly amid a more rapid migration to digital networks as brought about by WFH, with the Cloud’s share of security budgets expected to rise from 28 per cent in 2019 to 38 per cent on average in 2020.
CrowdStrike is one of the best recent performers, posting a 60 per cent share price rise over a matter of days.
The company has taken a fundamentally new approach to cybersecurity that leverages the network effect of crowdsourced data applied to modern security through technologies such as artificial intelligence, Cloud computing, and graph databases.
Alongside WFH is the separate, but related, trend known as PAH (play at home). During lockdown, most of our extra free time is spent consuming digital content.
This is captured in recent figures showing US urban residential downstream data consumption to have increased by 98 per cent in the week to March 16.
In this space, we are seeing gaming companies with in-game monetisation functionalities (such as Ubisoft and CD Projekt) as well as subscription-based music and TV platforms doing particularly well.
Online health
But work and play are not the only things being practised remotely.
Coronavirus has heightened the need for remote healthcare and telemedicine, which are being used to help measure diagnostic indicators such as someone’s temperature, heart rate and blood pressure while in isolation.
This disruption to the provision of ordinary healthcare has led to sector-wide innovation.
In China, the outbreak has caused citizens to flock to online platforms such as Good Doctor, Baidu Inc’s Wenyisheng and Alibaba Health Information Technology.
The Good Doctor platform, for instance, saw weekly downloads jump by 1,186 per cent in the week to January 26.
Additionally, the push to develop a vaccine is seen to be spurring disruption; the new collaboration between Pfizer and BioNTech, for instance, brings together one of the largest and most established players in the pharmaceutical sector with a younger company working at the forefront of mRNA-based immune therapies.
One final area where we are seeing disruption is in supply chains. Manufacturers from the automotive, aerospace, home appliance, textile and alcohol industries are among those reshaping supply chains to help counter the global shortages of key medical supplies.
Ford is using parts usually fitted in vehicles, such as fans and batteries, to produce modified respirators and ventilators.
Dyson, on the other hand, is working alongside the Technology Partnership – a group of British scientists and engineers whose purpose is to drive innovation – to develop a new ventilator system altogether, called CoVent.
These are just some of the innovations being driven by disruptive companies in order to tackle the challenges of a Covid-19 world. Now we must look ahead, understand how the crisis will continue to shape our lives for years to come, and equip ourselves with the tools and ideas needed to manage these changes. In short, to overcome the disruption, we must be disruptive.
Wesley Lebeau is manager of the CPR Invest Global Disruptive Opportunities fund
