The Pandemic, Governance & Technology: Impact & Bubbles

Governments no longer have a choice about digital transformation. They need to go digital and the time to act is now. In this three-part blog series, I examine what COVID-19 means for governance and analyze the technology and transformation strategies that are necessary to power a robust response.

• Part 1 gives an overview of emerging micro and macro socioeconomic trends and the rise of “bubbles”.
• Part 2 examines the critical steps governments need to take for successful digital transformation.
• Part 3 expands on the technology and people strategies that underpin the transformation journey.

Besides the few centenarians still alive, no other human has experienced what is happening now with COVID-19.

All countries, enterprises, and people will be forced to accept the new reality, the new norm. Governments have to look at improving operations and services to stay relevant and competitive.

Digital transformation is no longer a choice – it’s a must

Globally, many of us must be asking when this pandemic will be over. When will the new norm start? On 8 June 2020, New Zealand declared itself clear of COVID-19 virus. Meanwhile, South Korea is now worried about a resurgence, just weeks after the country reopened its economy and schools. The pandemic in Africa and Latin America has likely yet to hit its peak.

One thing is clear about COVID-19 – it is very contagious. In this global economy, or just a very mobile population in a city, no one is safe until everyone is safe, until a commercial vaccine is available.

There are a few models predicting the future of COVID-19. A more popular one is “The Hammer and Dance” by Tomas Pueyo. Globally, it is not unlikely that the “Dance” phase and the vaccination phase may take up to three years, and only then can the world declare that the COVID-19 pandemic is over.

But, we are already in the new norm!

Why Anywhere Is Everywhere

The World Bank estimates that 55% of the world population is urbanised. So, it is safe to say that 4 billion individuals are currently experiencing this new norm. Not all of us are privileged enough to stay at home as mandated by many governments globally. There are those providing essential services, such as healthcare, medical supplies, emergency services, groceries, farming, delivery, and ICT infrastructure. And we mustn’t forget homeless people or the less affluent: while some of us are grumbling about social distancing and staying home, those who are not as privileged have to sacrifice even more, and make alternate arrangements for their loved ones to reduce the risk of spreading the virus to them.

Under this new norm, we cannot live, play, learn and work as we’ve been used to doing all our lives, aside from the comparatively short interruptions during pandemics such as SARS and MERS that some of us experienced.

With the highly contagious COVID-19, we have no choice but to be physically separated, usually restricted to our own household to contain the virus spread, to flatten the curve. For some time to come, many of us won’t be able to visit our relatives and friends, patronise our favourite eateries, work out at the gym, or catch a movie. For many of us, we have to study, work and shop from home, which usually involves video streaming.

Can you imagine if COVID-19 had happened when we were still on 2G wireless or dial-up Internet access?

Read more: Why We’re Better Equipped than Ever to Fight the Pandemic

Even now, many countries are caught with insufficient bandwidth to homes, forcing some carriers to think about bandwidth rationing.

The Rise of Bubbles

After the “Hammer” phase of this pandemic, we may be unable to immediately open up the economy and go back to things exactly as they were before COVID-19. With the “Dance” phase and vaccination phase, we may have to wait for up to three years. Although with the curve relatively flattened, instead of living, playing, learning, and working from home, we may have to do that from anywhere. While no longer isolated within our households, we are likely to keep ourselves within smaller trusted communities, or bubbles, either voluntarily or by law. When there is a community spread in one bubble, we will need to move to another bubble. This explains the need for us to prepare to live, play, learn, and work from anywhere.

The need for enterprises, schools and governments to go digital, and the resulting need for mobile broadband, especially 5G, are critical.

A few governments have already implemented social bubbles, restricting who with and how relatives and friends can meet and socialise. Some countries and cities are also in discussions to create tourism bubbles. We are likely to see regional business/supply chain bubbles (e.g. China and Singapore creating a green lane for essential travellers), education bubbles, and of course, healthcare bubbles. Online shopping and deliveries, which are already organised by location, will evolve into trusted bubbles, too, with more personalisation. We may see interconnections between bubbles, but with “border controls and tests” to ensure trust.

Socioeconomic Trends

Beyond individuals, what are the impacts on our societies, cities, and countries?

How we buy things: The majority of the people in China adapted to the initial lockdown very quickly because of the societal omnipresence of e-Commerce and cashless payments (e.g. Alipay, WeChat Pay). Consumers and enterprises in China continue with their transactions, especially non-physical goods, just like before the lockdown.

After the initial Circuit Breaker (aka lockdown) in Singapore, many of us are continuing with our online shopping even for meals, and our current multiple electronic payment systems may be driven to interoperate and even consolidate.

How we work: Many companies are now waking up to this new reality that face-to-face meetings, or even travelling, are not always necessary. Big and expensive offices are likely to be replaced by video conferencing and digital collaboration tools. Specialists are likely to be decentralised, too. Factories may be decentralised in different bubbles, each with its own end-to-end supplies, and with more production automation. Schools and higher learning institutions will definitely introduce more modules that allow for learning and collaboration from anywhere, and even online examinations with improved identity verification technology and anti-cheat systems.

How we play: But as social creatures, we will still leave our houses to socialise with relatives and friends. Places of worship, shops, restaurants, and entertainment outlets will have to rethink and redesign their physical layouts, possibly with tightened regulations, to create trusted bubbles. In the short term, the costs of socialising will rise for various reasons, including the need for more space as a result of sparse layouts.

But with more decentralised neighbourhoods/cities, or bubbles, the situation may improve. Over time, we may see more high-end dining and entertainment establishments adopting a “food court” style, where restaurants and outlets collaborate and share a sparse, common facility for customers to use, while each business maintains its own shopfront, with a common pool of servers to serve the customers. Shopping experiences may be hybridised, where consumers select their purchases from anywhere online, and then spend a shorter time in physical shops to verify the physical reality of goods.

Economic Downturn: Unfortunately during the lockdown and initial period of the new norm, companies will go bankrupt and unemployment rates will increase, as we have already witnessed in many countries. Few governments have large enough reserves to help everyone and every company, especially with a prolonged “Hammer and Dance” phase. Society, enterprises, and governments have to help upgrade and retrain the workforce for areas with increasing demands, such as healthcare assistants and delivery personnel. Despite governments’ best efforts, there is a risk that economic inequalities will rise, which may lead to social unrest.

Law & Order: Other law and order issues include a rise in domestic violence, child abuse, looting, cybercrimes, online scams, and even fake medical supplies. The rising costs of living and increasing unemployment rates will push up conventional crimes too, such as theft, robbery and burglary. We may also see more migration across cities and countries, even illegally, as people seek better economic and healthcare conditions. Such uncontrolled migration will pose problems to bubbles.

A Changing Cityscape: From a city perspective, we may see the beginning of the end of mega cities, or at least densely populated cities. Many governments have been planning to move their capital cities because of over-urbanisation and overcrowding. Of course, such planning and execution will take decades. But COVID-19 will accelerate such decentralisation, and we may see more smaller and self-contained cities with end-to-end services, i.e. trusted bubbles.

Transportation Innovation: Green lanes, or trusted land, sea, and air travel, will be needed to connect such bubbles for people and goods. For the next two years, air travel especially long-haul, will be greatly reduced. Enterprises are likely to decentralise specialist staff and/or manufacturing facilities in their own bubbles. With lower demands and the need for more space, the cost of transportation will rise in the immediate future. But this may drive the industry to innovate more efficient modes of transportation, including autonomous vehicles.

Global Interdependence: At a country level, governments are coming to terms with their dependency on other countries for medical supplies, essential goods, and even food. For a small country like Singapore, we have to bring back some manufacturing and farming capabilities, even with higher costs, to ensure that we are self-sufficient at least for a sustainable period of time. The entire country’s supply chain system has to be re-evaluated, with reliable business continuity management (BCM).

Countries need to look at BCM not only for physical goods, but also in people and services. Do we have enough healthcare professionals and essential talent? It is unavoidable that a country needs to depend on various services providers, e.g. carriers and cloud providers. Is the cloud provider able to manage its own BCM? If the cloud provider has its data centres in another country, will the services be shut down by the other government? This is why other than bringing manufacturing, farming, and people back to a country, governments are now looking at Sovereign Cloud, for both BCM and data privacy/security purposes. One example is the EU’s Gaia-X.

You can read more about Huawei’s position on Global Digital Governance in our Global Industry Vision 2025 report.

In part 2 of this series, I will look at the steps governments need to take for successful digital transformation in response to the new norms established by the pandemic. Make sure you subscribe to this blog to receive notifications of the latest posts from Huawei experts.

Disclaimer: Any views and/or opinions expressed in this post by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Huawei Technologies.