# Vision

Digital Leap:
When If Not Now?

The coronavirus has accelerated digital transformation in many sectors. It has revealed deficits, but also released new energy. We look at five industries and their digital futures.

Not only students and teachers have learned a lot during the Corona lockdown - as for example in this virtual school lesson. In many areas of public and private sector, it led to a surge in digitalization.Plainpicture

Health agen­cies report­ing case sta­tis­tics by fax, schools lack­ing the tech­ni­cal means for online instruc­tion, and retail­ers with­out any dig­i­tal presence—the coro­n­avirus lock­down mer­ci­less­ly exposed dig­i­tal deficits in both the pub­lic and pri­vate sec­tors. But it has also released new ener­gy and showed what is pos­si­ble. For instance, the admin­is­tra­tive orga­ni­za­tion with large­ly ana­logue tech­nol­o­gy that man­aged to dig­i­tal­ize its pan­dem­ic-relat­ed ser­vices essen­tial­ly overnight from offices now locat­ed in homes. Or the teach­ers who suc­cess­ful­ly impro­vised their vir­tu­al lessons. And the retail­ers who cre­ative­ly expand­ed their online busi­ness mod­els. The cul­tur­al sec­tor was equal­ly inven­tive. Vir­tu­al tours of muse­ums, livestreams of orches­tra con­certs, and lit­er­a­ture fes­ti­vals on Zoom will almost cer­tain­ly expand acces­si­bil­i­ty to cul­ture on a last­ing basis.

There’s no going back to the pre-crisis mode.

Achim BergAchim Berg
President, Bitkom digital association

Digital turning point

The speed with which solu­tions have been found dur­ing the pan­dem­ic is an impres­sive demon­stra­tion of how high­ly com­plex process­es like dig­i­tal­iza­tion can be accel­er­at­ed with­in very short peri­ods of time. “It seemed unimag­in­able that work­ing and study­ing online would actu­al­ly become stan­dard prac­tice,” says Achim Berg, the pres­i­dent of Bitkom, an asso­ci­a­tion of more than 2,700 Ger­man com­pa­nies in the dig­i­tal econ­o­my. “But now the enor­mous poten­tial of dig­i­tal tech­nolo­gies can no longer be over­looked.” For him the cri­sis rep­re­sents a turn­ing point in dig­i­tal­iza­tion, and a wake-up call to pur­sue the process with all avail­able means. There can be no turn­ing back to the pre-cri­sis mode, he says. The course is now being set. Depend­ing on the sec­tor, orga­ni­za­tions and com­pa­nies have respond­ed to the need for dig­i­tal­iza­tion in many dif­fer­ent ways.


Trade fairs: Virtual gatherings

Trade fairs were affect­ed right from the start of the coro­n­avirus pan­dem­ic. As large-scale events with hun­dreds or thou­sands of par­tic­i­pants, exhi­bi­tions around the globe had to be can­celed or post­poned. Those orga­niz­ers with the abil­i­ty to switch to vir­tu­al plat­forms con­sid­ered them­selves for­tu­nate. One of them is Gamescom, the lead­ing Euro­pean trade fair for com­put­er and video games. Fans and experts gath­er every year in Cologne to catch up on the lat­est devel­op­ments in the field. The fair had already rolled out ini­tial dig­i­tal for­mats in 2019. “That enabled us to reach mil­lions of fans online,” says Tim Endres, the direc­tor of gamescom. “Dig­i­tal­iza­tion had already made enor­mous strides in the trade fair sec­tor before the coro­n­avirus hit,” he adds. The event will take place entire­ly online in late August 2020: “Gamescom 2020 will be the first pure­ly dig­i­tal event run by Koel­n­messe.” Now Endres and his col­leagues are refin­ing their dig­i­tal for­mats and work­ing at full speed on addi­tion­al exhi­bi­tions. “The fact that we didn’t have to start from square one has paid off.”

Digitalization had already made enormous strides in the trade fair industry before the coronavirus hit.

Tim Endres
Director, Gamescom

Over­all, how­ev­er, the effects of the pan­dem­ic on the world­wide exhi­bi­tion and event indus­try have been severe. UFI, the Glob­al Asso­ci­a­tion of the Exhi­bi­tion Indus­try, esti­mates that can­cel­la­tions will lead to loss­es of as much as 134 bil­lion euros in the sec­ond quar­ter of 2020. “But trade fair orga­niz­ers are inven­tive and flex­i­ble. In the future, some for­mats will be more com­pact or spread out over more space in order to meet hygiene requirements—and will be enhanced by dig­i­tal com­po­nents for cus­tomers who can­not be there in per­son on account of trav­el restric­tions,” says Kai Hat­ten­dorf. He is the man­ag­ing direc­tor of the UFI exhi­bi­tion asso­ci­a­tion, based in France, which rep­re­sents the inter­ests of around 800 mem­ber orga­ni­za­tions in eighty-eight coun­tries and regions world­wide.

Endres, too, is con­vinced that “trade fairs have always revolved around per­son­al con­tacts made at event loca­tions. Although we obvi­ous­ly will con­tin­ue to dig­i­tal­ize, online options can­not and should not replace real-life par­tic­i­pa­tion. As soon as real events are pos­si­ble, we will use hybrid formats—wherever appropriate—like a com­bi­na­tion of actu­al exhi­bi­tions and dig­i­tal offer­ings.”

Trade fairs focus on bringing together people and companies with common interests. This even applies to such digital topics as computer games—as here at Gamescom 2019 in Cologne. In the future, the fair will focus on hybrid formats. Franziska Krug/Getty Images

Administration: Suddenly online

The need to dig­i­tal­ize appeared lit­er­al­ly overnight. At the start of the coro­n­avirus cri­sis in March 2020, Ger­man admin­is­tra­tive offices put appli­ca­tions for tem­po­rary unem­ploy­ment com­pen­sa­tion and emer­gency relief for com­pa­nies and free­lancers online. The pan­dem­ic showed how impor­tant it is for coun­tries’ admin­is­tra­tive process­es to func­tion dig­i­tal­ly. “Online gov­ern­ment ser­vices are an effec­tive tool for mas­ter­ing the chal­lenges of this cri­sis,” says Ernst Bürg­er. Since late May 2020 he has head­ed the newly insti­tut­ed Dig­i­tal Admin­is­tra­tion depart­ment at Germany’s Fed­er­al Min­istry of the Inte­ri­or, which is charged with accel­er­at­ing the process of dig­i­tal­iza­tion.

Accord­ing to the 2018 Unit­ed Nations E‑Government Devel­op­ment Index, which sur­veys the dig­i­tal­iza­tion sta­tus of all 193 mem­ber states every two years, Ger­many holds rank 10. Swe­den, Fin­land, and France all score above it, and the world leader is Den­mark, which launched a dig­i­tal­iza­tion strat­e­gy back in 2001. Danes can use a per­son­al ID num­ber to do things like apply for social secu­ri­ty or child ben­e­fits, make med­ical appoint­ments, and pay bills online. The top ten coun­tries also include Aus­tralia, which is work­ing on dig­i­tal IDs, and Sin­ga­pore, whose dig­i­tal admin­is­tra­tion process­es are advanced by a gov­ern­ment-spon­sored Smart Nation pro­gram.

The virus has forced us to seize the opportunity to digitalize. Our agenda now is ‘Prioritize digitalization!

Ernst Bürger
Director of the Digital Administration Department at the German Federal Ministry of the Interior

By the end of 2022, near­ly 600 admin­is­tra­tive ser­vices are expect­ed to be acces­si­ble online in Germany—as pre­scribed by the Online Acces­si­bil­i­ty Act passed in 2017. Stud­ies by the Docu­py report­ing project at the WDR pub­lic tele­vi­sion sta­tion show that in early March 2020, appli­ca­tions for just three admin­is­tra­tive ser­vices could be sub­mit­ted online. Appli­ca­tions for sev­en­teen oth­ers could be filled out online and print­ed, but no sin­gle ser­vice was entire­ly usable online. But that quick­ly changed. As of May 2020, pan­dem­ic-relat­ed ser­vices such as hous­ing ben­e­fits, emer­gency child ben­e­fits, and employ­ee com­pen­sa­tion can now be applied for online. Next in line to be dig­i­tal­ized are appli­ca­tions for unem­ploy­ment com­pen­sa­tion and sub­si­dies for stu­dents and school­child­ren. As Bürg­er notes, “Crises require peo­ple to act quick­ly and deci­sive­ly. The virus forced us to seize the oppor­tu­ni­ty to dig­i­tal­ize. Our agen­da now is ‘Pri­or­i­tize dig­i­tal­iza­tion!’”


Education: “Finally a boost”

Well before the coro­n­avirus broke out, pre­scient teach­ers were post­ing cre­ative ideas for online teach­ing meth­ods on Twit­ter with hash­tags like #twit­ter­lehrerz­im­mer (twit­ter­fac­ulty­lounge) , #WeAreTeach­ers, and #EduGlad­i­a­tors. They had a clear advan­tage when lock­downs were insti­tut­ed world­wide in Feb­ru­ary and March 2020 and schools were affect­ed as well. “The cri­sis has shown that there are incred­i­bly good ways of offer­ing edu­ca­tion online,” says Andreas Schle­ich­er, who heads the Direc­torate of Edu­ca­tion and Skills at the Orga­ni­za­tion for Eco­nom­ic Coop­er­a­tion and Devel­op­ment (OECD). “They were devel­oped on short notice, and we’ve seen schools make cre­ative  use of the lee­way they’re given.” But inter­na­tion­al com­par­isons reveal dif­fer­ences. Esto­nia, Den­mark, and Fin­land, for exam­ple, were well equipped to offer online instruc­tion because they had been using Web-based tech­nolo­gies in their school sys­tems for years. Ger­many, how­ev­er, strug­gled with inad­e­quate tech­nol­o­gy and slow Inter­net speeds as well as a lack of online les­son plans, not to men­tion teacher train­ing pro­grams for this type of instruc­tion. One rea­son for this might have to do with the high­er aver­age teach­ing loads in Ger­many than in many other coun­tries, which would leave less time for design­ing and devel­op­ing online les­son plans.

We’ve seen schools make creative use of the leeway they’re given.

Andreas Schleicher
Director, Directorate of Education and Skills, OECD

“For many schools it was like a crash test. They had to impro­vise and come up with solu­tions on the fly. There was a price to be paid for hav­ing failed to put suf­fi­cient resources into online edu­ca­tion­al oppor­tu­ni­ties in the past,” says Christoph Meinel, the direc­tor of the Hasso Plat­tner Insti­tute (HPI), which pro­vides an edu­ca­tion­al plat­form called the HPI Schul-Cloud, fund­ed by the Ger­man Fed­er­al Min­istry of Edu­ca­tion. It is increas­ing­ly clear that the old sta­tus quo is a thing of the past. “The pan­dem­ic gave a deci­sive boost to dig­i­tal­iza­tion at schools and uni­ver­si­ties,” says Meinel. For his part, Schle­ich­er empha­sizes the future impor­tance of more than just good tech­nol­o­gy and edu­ca­tion­al plat­forms. “Edu­ca­tion and fur­ther train­ing also have to be an inte­gral part of teach­ers’ work­ing envi­ron­ments,” he says. “We can’t expect stu­dents to take a life­long approach to learn­ing if they don’t see their teach­ers doing that as well.”

For many schools the pandemic was like a crash test.

Christoph MeinelChristoph Meinel
Director, Hasso Plattner Institute

Healthcare: Doctors’ experience is key

These com­put­ers can “smell” dan­ger: equipped with real bio­log­i­cal neu­rons, sen­sors in devices from Koniku, a U.S.-based start-up, can detect not only traces of explo­sives but also virus­es in infect­ed indi­vid­u­als. Julia Belaya knows how impor­tant such vision­ary ideas can be in com­bat­ing epi­demics. As the direc­tor of busi­ness devel­op­ment for the health­care divi­sion of the Plug and Play Tech Cen­ter in Cal­i­for­nia, she brings start-ups, investors, and cor­po­ra­tions togeth­er. In the Covid-19 Accel­er­a­tor pro­gram, start-ups like Koniku are work­ing on dig­i­tal solu­tions to the pan­dem­ic. “The coro­n­avirus has enor­mous­ly accel­er­at­ed dig­i­tal­iza­tion in health­care,” she says. “Vir­tu­al med­ical appoint­ments used to be fair­ly rare before the cri­sis, but now they seem almost rou­tine.” Thomas Kostera, a health­care dig­i­tal­iza­tion expert at the Ber­tels­mann Foun­da­tion, is also observ­ing these devel­op­ments. “In Ger­many, but also in coun­tries like France, sup­ply and demand for video appoint­ments have increased marked­ly,” he notes. “In many cases, patients can be seen with­out hav­ing to set foot in the office.”

Covid-19 has led to greater acceptance and demand for virtual interaction between doctors and patients.

Julia Belaya
Global Head, Business Development—Health, Plug and Play Tech Center

Belaya is cer­tain that inter­est in areas like tele­health and remote dis­ease mon­i­tor­ing will con­tin­ue to grow after the pan­dem­ic. “Covid-19 has led to greater accep­tance and demand for vir­tu­al inter­ac­tion between doc­tors and patients,” she says. “And the health­care sec­tor will have to adapt to this.” Kostera sin­gles out a key part of the process: “We have to care­ful­ly eval­u­ate the expe­ri­ence that doc­tors, nurs­es, and patients have now gained in this area, and then use it to decide how cur­rent dig­i­tal inno­va­tions can con­tin­ue to be used or also improved.”


Retail: Green light for online sales

Retailer Zelda Czok was able to sell the plants from her Hamburg store during the Corona lockdown using Instagram, video calls and messaging apps. Johannes Arlt

Winkel van Sinkel, a retail shop in Ham­burg run by Zelda Czok, is filled with vibrant green vines, suc­cu­lents, and air plants—normally, at any rate. When Czok heard about the immi­nent lock­down in March 2020, she swung into action. “With­in twen­ty-four hours, I devel­oped and imple­ment­ed a way to pro­vide online advice to peo­ple who want to buy plants,” she says. Her approach used tools like video con­fer­ences and mes­sag­ing apps. In addi­tion to stem­ming a loss in sales, she also want­ed to pre­vent her plants from spoil­ing. Czok con­tin­ued to sup­ply her cus­tomers with plants via the PlantSale chan­nel she set up on Insta­gram. It didn’t hurt that she had already been active on Insta­gram and Face­book, with a sub­stan­tial fol­low­ing. “It’s absolute­ly essen­tial to have a good com­mu­ni­ty,” echoes Frank Rehme, the man­ag­ing direc­tor of Mit­tel­stand 4.0‑Kompetenzzentrum Han­del, a sup­port cen­ter for retail­ers in Ger­many seek­ing to dig­i­tal­ize.

Retailers whose business models have neglected digitalization have some catching up to do.

Frank Rehme
Managing Director, Mittelstand 4.0-Kompetenzzentrum Handel

As the exam­ple of Winkel van Sinkel shows, small busi­ness­es have ways to build a pres­ence online, for instance by using social media. Other retail­ers, as well as restau­rants, are rely­ing on the power of com­mu­ni­ties to enable rapid online sales and orders—on local shop­ping plat­forms, for exam­ple. Thalia May­er­sche, the leader on Germany’s brick-and-mor­tar book mar­ket, and the Osian­der chain in south­west­ern Ger­many cre­at­ed the “Shop daheim” (shop at home) plat­form to con­nect cus­tomers and retail­ers in all sec­tors. As yet anoth­er exam­ple, it has long been rou­tine prac­tice in many Asian coun­tries to buy prod­ucts such as gro­ceries online. This helped make the exten­sive lock­down in some Chi­nese cities pos­si­ble. The country’s e‑commerce mar­ket is one of the largest in the world. Its sales in 2019 grew by around 20 per­cent to the equiv­a­lent of 1.2 tril­lion US dol­lars.

Accord­ing to Rehme, retail­ers whose busi­ness mod­els have neglect­ed dig­i­tal­iza­tion have some catch­ing up to do. He esti­mates that around 30 per­cent of Ger­man retail­ers do not even have an inven­to­ry con­trol sys­tem. “By now every­one under­stands how impor­tant it is to have an online pres­ence,” he remarks. What’s impor­tant for dig­i­tal­iza­tion is to “always respond direct­ly to cus­tomer needs, and to be inspir­ing.” Like Zelda Czok. Although most of her cus­tomers have returned to her shop, they still have the option of buy­ing plants online. Czok plans to con­tin­ue devel­op­ing her online strat­e­gy after the virus has passed. She expects to have a Web shop that can han­dle pur­chas­es auto­mat­i­cal­ly. As she explains, “That will give us more time to address the indi­vid­ual wish­es of our cus­tomers.”

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