Businesses that adapt to digitalization will likely emerge stronger after the pandemic, a World Bank economist said on Tuesday.
“This pandemic is an extraordinary shock yet there’s always a silver lining in any crisis.
Digital transformation could be one of them. Going digital helps businesses, people and countries to be more efficient and competitive,” World Bank senior economist Rong Qian said during The Manila Times’ “Regroup and Rally: Bouncing Back Better” forum.
“Digital technology enhances coordination and automates processes in a way to improve operational efficiency and decrease cost. Digital technology supports business continuity and resilience and this is very pertinent for the Philippines given that the country is prone to natural disasters,” she added.
Qian said that while the pandemic had a negative impact on almost all businesses, it would also lead to lasting transformation that would benefit certain sectors, such as firms that enable online and technology-based services.
She cited the huge increase in e-banking during the height of the lockdown.
“In the Philippines, the value of online banking increased over 600 percent in March before and after the lockdown,” Qian said.
A lot of companies turned to digital solutions to adapt to the new normal, she added.
“In the Philippines, 42 percent of firms started using digital platforms such as Facebook, Instagram while 23 percent have invested in digital solutions, [making the country] relatively well-positioned compared to neighboring countries,” she said.
She disclosed that close to 60 percent in the education sector adopted digital solutions. Business process outsourcing companies, accounting offices and legal services also intensified the use of digital platforms.
“Retail, food services and agriculture did not adapt as much as the others and among the hardest obstacles, access to finance is the first, followed by uncertainty on demand and unreliable and expensive internet connection,” Qian said.
She pointed out that new opportunities require democratizing digital access to prevent low-income families from being excluded.
“If this digital divide is not addressed, this crisis could exacerbate the unequal access to economic opportunities,” the economist warned.
“If there’s a silver lining to this pandemic, it will serve as an opportunity for companies to make some fundamental shift and implement processes that will enable them to thrive,” she added.
Qian said companies that would emerge stronger are those that innovate.
To accelerate the growth of digital technology, Qian said the government should upgrade the digital infrastructure by removing regulatory constraints, promoting digital payments, improving efficiency of the logistics system and fostering a conducive business environment.