Predictions about digitalisation – the fourth industrial revolution – and how it will transform our world have been circulating for some time. The move to digital, facilitated by Artificial Intelligence (AI), big data, automation and advances in computing power and greater connectivity, promises to change how and where we work, play, consume and interact forever. (1)
Prior to the COVID-19 pandemic, the speed of change had already been expected to be significant. The rollout of 5G, AI and big data was predicted to bring about more disruptive change in the next five years than any technology had done in the past 30. With over 60% of global GDP expected to be digitised by 2022, an estimated 70% of new value created in the coming decade is forecast to be based on digitally-enabled platforms.
COVID-19 has accelerated that process beyond the most ambitious predictions. It has, by one estimate, compressed five years of progress within the space of three months. (2) Lockdowns across the world have propelled our social interaction and cultural consumption almost entirely into the digital sphere.
Digital businesses like e-commerce, fintech, online working and entertainment platforms, have benefitted during this period. Technology firms have seen their value skyrocket; Zoom, the remote working platform, for example, saw its share price more than double in the period January to May, and both Zoom and Slack together have added US$50 billion to their market capitalisation this year.
Digitalisation of traditional sectors such as banking, retail, health, education and manufacturing is the wider noteworthy effect of the pandemic. Businesses that were able to pivot quickly online and which had undergone digital transformation earlier have been better able to deal with the disruption, whilst those that had not fared less well. From remote workforce management, digital service delivery, e-commerce and contactless payment and delivery, to digitalised inventory management and remote track and trace systems in supply chain logistics, the COVID19 pandemic has reinforced the value of digital transformation to business.
Asian countries such as South Korea, Singapore and China have been able to mitigate large-scale economic disruption in the face of the closure of physical facilities such as banks, shops, and restaurants due to their advanced levels of digital connectivity. In China, widespread use of e-payment systems such as Alipay and WeChat, by 85% of the population, together with data-driven provisioning from logistics and distribution platforms allowed cities such as Wuhan and Shanghai to operate with minimal disruption. (3)
The new digital normal: opportunities and challenges
As digital increasingly becomes the new normal, many businesses will want to maintain many of the digital aspects of their COVID-19 pivot. Others will be looking to bring forward their plans for more comprehensive digital transformation.
In Singapore, there has been a reported 20% rise year-on-year in businesses undergoing digital transformation since the COVID-19 pandemic, and a record number of new businesses signing up to e-commerce platforms with the support of government booster programmes and grants. (5) A recent survey of Chinese companies showed that the majority of those surveyed intended to increase their investments in digital by 10-30%. (6) Integrated delivery and digital payments platforms such as Grab that have made it possible for street food vendors and wet market vendors in Asia to survive during the COVID-19 pandemic. These are likely to retain their popularity as the advantages of data analytics and the additional market reach it provides users and businesses become evident. (7)
Digitalisation can also spur innovation as businesses search for solutions to the current challenges posed by COVID-19. Industries that have found it hardest to adapt because of the face-to-face nature of their products and services such as live entertainment, traditional media, hospitality and sports events, may be forced to develop radically innovative ways of delivering their services online to survive.
As Lam Chung Niam, Head of Intellectual Property Law at Singapore law firm Wong Partnership noted, “even in a period of such challenge and adversity, businesses and governments alike can be on the look-out for how digitisation, technology and Intellectual Property (IP) can provide opportunities for innovation, and the regulatory framework can evolve and be responsive to facilitate the adoption of new technology models.”
Business and intellectual property in the digital age
The digital realm amplifies brand value; at the same time it makes IP more vulnerable to theft through greater ease of counterfeit and copying. Understanding the value of their IP assets and ensuring they are adequately protected will be essential for businesses going digital. As Lau Kok Keng, Head of Intellectual Property Law at Rajah and Tann, another Singapore law firm, noted, the higher incidence of partnership working required by the development of digital assets means that businesses need to ensure that the IP rights created in the process of going online are “properly assigned to the business to avoid any conflicting IP ownership claims.”
He noted that “digitalisation and IP come hand in hand. Governments should encourage businesses to embark on digitalisation, and should not only offer funding, but also make it easier for businesses to protect the IP rights created in the process of digitalisation. In this regard, IPOS’ initiative for a patent acceleration program to expand support for innovation to all sectors is a step in the right direction.”
Margaret Vestager, EU Competition Commissioner once said, there are only two types of business: those that are digital and those that soon will be. The pandemic has been a wake-up call to businesses that have been slow to embrace digitalisation and to commercialise their intangible assets. As digitalisation speeds to the fore of the global economy, that call is only likely to become more urgent.
(1) This article has benefitted greatly from email exchanges with Lam Chung Nian and Lau Kok Keng of Wong Partnership Singapore and Rajah and Tann Singapore.
