COVID-19 and robots. How coronavirus will spark a boom in investment in automation

Do you know how they say that in Chinese the word "crisis" consists of two words - "danger" and "opportunity"? In fact, this is an etymological fallacy, but this is not the point here. It is easy to see why this catchphrase has become so popular, because the crisis does bring with it a lot of new opportunities, along with dangers and risks. Well, you probably already understood what we are driving at: COVID-19, pandemic, quarantine, and a noticeable crisis in the economy as a result of all this. A crisis that, despite its bleak nature, has also brought significant changes. And a lot of opportunities, in particular for technology companies and startups. Today we decided to take a look at which technologies, industries and market niches have already received a noticeable impetus to development thanks to the ongoing epidemic, and which ones only show the potential for explosive growth in order to better understand what opportunities everything that is happening opens up for programmers and other IT professionals, as well as entrepreneurs.

Automation: explosive growth of investment in the automation sector is coming

The epidemic and quarantine have already left millions of people without work. Only in the United States, according to experts, there are more than 10 million new unemployed. But this, in a rather unexpected way, spurred the development of a whole technological direction, the name of which is the automation of business processes. Even now, the accelerated implementation of automation solutions allows you to replace some of the functions that until recently were performed by people. Despite the fact that automation itself is not a new trend, and technologies have been developing in this direction for several years, experts say that it is the coronavirus crisis that will provide an impetus for a noticeable increase in activity in the field of automation. The push is mainly financial, as a significant influx of investment is now expected in the field of automation. “There is a popular opinion that automation will slow down because of the crisis, because technology is expensive, and companies will be reluctant to make large investments in a crisis. This is not true. Economic studies over the past decades show that such investments are made in times of crisis, and in larger volumes than before,”saidMark Muro is a senior fellow at the Brookings Institution who does research on automation. As scientists explain, the introduction of various kinds of automation methods never takes place gradually and measuredly. Instead, automation develops in bursts, which peak just at the time of hard times in the economy, when it becomes more expensive to support people than to spend on automation. It is at times like these that employers are most eager to get rid of low-skilled workers and replace them with new technologies, along with fewer high-skilled workers, to increase productivity and stay afloat during a recession. For this reason, automation should be one of the main beneficiaries of the current coronavirus crisis, as far as the economy as a whole is concerned. as well as the technology sector. By the way, which of the above can be concluded? Pretty simple: like it or not, you need to improve your skills, and preferably now, before the evil robots come and kick you straight down the social ladder. How to raise? Well, finish learning Java, for example. And of course, regularly read articles on CodeGym with various useful information, this also does not hurt. But back to automation. If we believe the forecasts of scientists, very soon we will hear this word much more often than before. In what sectors of the economy should automation receive, and is already receiving, the greatest development? until the evil robots come along and kick you straight down the social ladder. How to raise? Well, finish learning Java, for example. And of course, regularly read articles on CodeGym with various useful information, this also does not hurt. But back to automation. If we believe the forecasts of scientists, very soon we will hear this word much more often than before. In what sectors of the economy should automation receive, and is already receiving, the greatest development? until the evil robots come along and kick you straight down the social ladder. How to raise? Well, finish learning Java, for example. And of course, regularly read articles on CodeGym with various useful information, this also does not hurt. But back to automation. If we believe the forecasts of scientists, very soon we will hear this word much more often than before. In what sectors of the economy should automation receive, and is already receiving, the greatest development?

Retail

Of course, retail will be one of the main integrators of automation solutions, because this area has been seriously affected by the epidemic, which simply forces business owners to automate operations that used to be the prerogative of human beings. Retail sectors such as grocery stores and delivery in general have become especially important during the epidemic, as they provide people with the necessary food. On the one hand, quarantine has spurred automation in these sectors, forcing companies to introduce new solutions, such as using robots in delivery, or automating payments for purchases through the terminal. On the other hand, the need to quickly launch new solutions in a full-fledged mode to serve a large number of customers has also exposed serious problems that need to be overcome. Since the epidemic started in China, Chinese experience in introducing automation and adapting retail to new realities has allowed Western companies to learn from the experience of Asians. In particular, Wuhan, the city of more than 11 million people that started the COVID-19 epidemic, showed everyone how little time it takes to change: in just a few days after the start of the quarantine, digital delivery networks for everything needed were established. This experience has inspired both start-ups and big retail players in the West to follow the Chinese example to seize the opportunity and strengthen their position in the market during the explosion in demand for home delivery of groceries, medicines and all other goods. But the problem is that, as experts say, the Western world is noticeably behind China, both in terms of so-called digital maturity (that is, the willingness of consumers to apply and switch to digital solutions), and technologically. It turned out that Chinese consumers are moving from traditional retail to online much faster than Westerners. According toReport Global E-commerce 2019from eMarketer, China is the world's largest e-commerce market today. Its volume is $1.93 trillion a year, which exceeds the US figure by almost three times. 71% of Chinese consumers have transacted online at least once; online purchases account for more than 36% of total retail sales in the country, which is significantly higher than in Western countries. For example, in North America, the share of online shopping does not exceed 14.5%. Europe lags behind even more - 10%. China was at the level of such indicators almost five years ago. Therefore, the combination of digital maturity with the presence of a strong IT infrastructure was ideal for the explosive surge in demand that occurred due to the crisis caused by the virus. Therefore, experts suggested back in March, in the West, such a successful adaptation of new automation technologies in conditions of self-isolation and social distancing may not happen. And in general, they turned out to be right: even the largest of the retail giants in North America, like Amazon and Walmart, are far behind their Chinese counterparts both in terms of the introduction of automation and, in general, in terms of the development of their technological platforms and solutions.

Logistics and production

Logistics and manufacturing is another big market segment that should accelerate the adoption of automation. As the researchers note, one of the direct results of the crisis will be the understanding by companies in different market segments of the vulnerability of their global supply chains. “When something like this [like a mass lockdown] happens, the risks associated with investing in new technologies look different compared to the possible losses if a similar situation happens again,” he said.Arun Sundararajan is a professor at New York University's Stern School of Business who researches digital technologies and how they are transforming society. All this, according to the scientist, will lead to significant changes in how products around the world are produced and delivered. In particular, it is expected that many companies will want to move these operations closer to home, and this will be difficult to do without automation. As Sundararajan points out, something similar happened to the banking system after the 9/11 crisis in 2001. At that time, banking IT systems were unprepared for all sorts of shocks, which provoked a whole wave of automation. Companies that work in production and logistics are already beginning to feel new trends, although they note that that while venture funds and investment companies are still in no hurry to allocate a lot of money for innovation, but are actively interested in how to automate at least part of the work processes. According to Melonee Wise, chief executive of Fetch Robotics startup, which is implementing mobile robots for warehouse automation, the company received 63% more inquiries from new customers in March 2020 than a month earlier. “Now we often hear from clients about how a significant part of their budgets was frozen, except for automation budgets. All of a sudden, everyone was wondering how robots can help them keep production going while maintaining social distancing between people and not working at a loss,” said Weiss. but are actively interested in how to automate at least part of the workflows. According to Melonee Wise, chief executive of Fetch Robotics startup, which is implementing mobile robots for warehouse automation, the company received 63% more inquiries from new customers in March 2020 than a month earlier. “Now we often hear from clients about how a significant part of their budgets was frozen, except for automation budgets. All of a sudden, everyone was wondering how robots can help them keep production going while maintaining social distancing between people and not working at a loss,” said Weiss. but are actively interested in how to automate at least part of the workflows. According to Melonee Wise, chief executive of Fetch Robotics startup, which is implementing mobile robots for warehouse automation, the company received 63% more inquiries from new customers in March 2020 than a month earlier. “Now we often hear from clients about how a significant part of their budgets was frozen, except for automation budgets. All of a sudden, everyone was wondering how robots can help them keep production going while maintaining social distancing between people and not working at a loss,” said Weiss. which is engaged in the implementation of mobile robots for warehouse automation, already in March 2020, the company received 63% more inquiries from new customers than a month earlier. “Now we often hear from clients about how a significant part of their budgets was frozen, except for automation budgets. All of a sudden, everyone was wondering how robots can help them keep production going while maintaining social distancing between people and not working at a loss,” said Weiss. which is engaged in the implementation of mobile robots for warehouse automation, already in March 2020, the company received 63% more inquiries from new customers than a month earlier. “Now we often hear from clients about how a significant part of their budgets was frozen, except for automation budgets. All of a sudden, everyone was wondering how robots can help them keep production going while maintaining social distancing between people and not working at a loss,” said Weiss.

healthcare

And, of course, the need to limit contact with people in order to avoid infections has become an excellent opportunity for a number of medical robots, which are now capable of performing a whole range of simple but important functions, such as cleaning and decontaminating rooms and measuring patient health indicators. For example, Aethon's TUG autonomous mobile robots are already in use in more than 140 hospitals to perform safe drug delivery, bed linen and food transport, and garbage and biohazard waste collection. Since the advent of COVID-19, the company has experienced an unprecedented surge in demand for its products, according to Peter Seiff, CEO of Aethon. However, Seiff notes that most real deals have so far been frozen in anticipation of the lifting of quarantine and the normalization of the situation. Another area of ​​healthcare that is ripe for automation is long-term care, experts say. Seiff said the company had not previously developed solutions in this area, but due to the huge increase in the number of requests after the outbreak and the advent of social distancing, it began to work on solutions for long-term care. Well, disinfection robots that treat rooms with ultraviolet light to destroy bacteria and microbes have almost become commonplace. They, in addition to Aethon, are supplied by a huge number of companies, including Xenex, VD Robots and others. In addition to the robot manufacturers themselves, there is a growing interest in companies developing software and technical solutions for robotics. For example, Braincorp,

Other niches and market segments

Well, let's briefly go through the rest of the niches and market segments, which also received a boost thanks to the coronavirus hysteria.

• Tools for video conferencing and remote work.

  As companies around the world have made a dramatic and massive transition to remote work, it's no surprise that video conferencing and remote collaboration solutions have skyrocketed in popularity . The biggest beneficiaries of this are the market leaders Microsoft Teams, Google Hangouts, and Zoom. Especially the last one, which turned from a little-known tool into a mainstream service, which fundamentally moved two leaders (the aforementioned Microsoft Teams and Google Hangouts). Zoom shares have risen more than 50% since the outbreak began. This is despite the fact that the market as a whole has fallen markedly.

• B2B solutions for digital business, business intelligence and logistics.

  Due to the rapid growth in demand for automation, primarily from retail, a noticeable increase in interest in software companies developing various kinds of solutions for scaling and developing digital business lines is also expected.

  Among the solutions that have been buzzing around due to the epidemic are Combiworks (a service that allows you to compare supply and demand levels at production facilities), Cargomatic (provides a platform for connecting large logistics companies with small local carriers) and Bringoz (another logistics platform that which recently began rolling out new functionality to make it easier for retailers to scale home delivery).

• Digital and contactless payments.

  Although this area as a whole has already developed more than actively, the coronavirus has also spurred it on. Many establishments have begun to completely switch to contactless digital payments, abandoning cash, which can serve as carriers of infection. There are over 1.7 billion unbanked people in the world today, according to the World Bank, so this market remains wide open to new solutions and will remain so for a long time to come.

• streaming services.

  And of course, huge demand due to quarantine, when bars, restaurants, gyms and other entertainment facilities are closed, has received various kinds of entertainment Internet services, primarily video streaming platforms. Platforms like Netflix, Hulu, Amazon Prime Video, Disney+ and, of course, PornHub are reporting explosive traffic growth and competing with each other to better capitalize on the growth opportunities that have opened up. According to a new report from market research firm Nielsen, video streaming traffic around the world increased by about 60% during the pandemic. Three-quarters of consumers have already subscribed to new streaming services or connected to TV-integrated devices for online TV since the lockdown began.