Big Tech groups the biggest beneficiaries of disruption to working practices
Tech groups lead way in changing working practices
“The revolution was maybe going to happen in one year, two years, three years from now, but it has suddenly been brought to the top of the agenda.” Olivier Le Lann, the head of EVA, a Brooklyn start-up, was talking about the use of drones but his words are illustrative of how the coronavirus crisis is forcing the pace of business change. The former Tesla executive says the pandemic is acting as a catalyst for deploying drones in new ways, from police announcements and distributing hospital equipment to disinfecting public places. Car dealers in China are even taking online orders and then using drones to deliver keys to the balconies of new buyers.
Retail is one of the biggest sectors upended by the crisis. The enforced switch to online sales has led to a huge growth in ecommerce, although, as today’s UK statistics show, the trend is far from enough to compensate for lost sales from physical stores. Banking is another industry rapidly adapting. Trading floors are empty, as technology makes working from home easier but raises fresh questions around governance and compliance.
The biggest beneficiary from this period of unprecedented change is undoubtedly Big Tech, as its customers are forced to accelerate online plans, take up new networking tools and get people working from home. The combined market value of the leading tech companies hit a new record this week, points out US west coast editor Richard Waters, rising back above levels before coronavirus dented investor confidence. The tech companies themselves are leading the way in changing working practices.
Facebook said it would be “aggressively opening up remote hiring” and estimated that half of its staff could work remotely in the next five to 10 years. The effects on productivity of trends such as remote working are not yet clear. One performance management consultant warned of the risk of “productivity collapse . . . as people burn out, can’t cope, feel exhausted, and opt out. Companies won’t notice until quite far down the road, and will find it hard to recover.” There is also the danger that colleagues working in isolation — albeit connected online — will lose the creativity and capacity for innovation that comes from face-to-face encounters.
Architecture correspondent Edwin Heathcote bemoans the increasing presence of Big Tech in our domestic spaces, given a boost by the rise of gadgets such as voice-activated assistants, turning our homes into “limitless reservoirs of data”. “Covid-19 has provided the moment in which we have been finally transformed into a resource,” he concludes.
American companies are pawning their family silver as never before. Businesses are pledging assets ranging from Caribbean islands to theme parks as collateral for Covid-19 rescue deals. US and UK hedge funds have unleashed a fresh wave of short selling of continental European companies straight after bans expired in six countries earlier this week.
The news is likely to reignite debate about whether banning such bets is effective or ends up being counter-productive. The coronavirus crisis will not produce a round of megadeals, writes Sujeet Indap, US editor of the Lex column. Politicians are seizing the chance to clamp down on what they see as the increasing market power of large companies and the tech giants in particular.
Some of the 7,000 employees let go by Uber over the past month believe the car-hailing company is using the pandemic to reshape itself as it tries to keep promises about becoming profitable. The “damn virus”, its chief executive says, has pushed the target back to 2021 and prompted the closure or consolidation of 45 of its offices around the world.
Burberry, the UK luxury goods group, reported a bounceback in sales in the key markets of China and South Korea. The company says it is well prepared to navigate the coronavirus crisis, and not just because it retooled its Yorkshire factory to make medical gowns, says our Lex column. The pandemic has piled pressure on already struggling UK care home operators, increasing costs and hitting fees. All four of the biggest operators, including HC One and Four Seasons, have tried to sell in the past two years and failed to find buyers.
China’s economy shrank by 6.8 per cent in the first quarter and The National People’s Congress has for the first time abandoned setting a GDP target as it squares up to the most severe downturn since the 1970s. Our Big Read examines the challenges facing President Xi Jinping. Separately, Beijing’s plans for a security clampdown on Hong Kong sent global stocks tumbling. The hit to UK finances from the pandemic looks to be worse than the government’s fiscal watchdog expected. A record increase in borrowing and the highest debt to national income level in 57 years will add to pressure to restart the economy. Retail sales have also collapsed, despite a surge in online business, threatening many high street stores.
Will antibody tests be our passport to normality? US coronavirus correspondent David Crow explains what his own experiences have taught him about the complications — and consequences — of testing for immunity.
Arts editor Jan Dalley looks at what museums and galleries are doing to welcome visitors again. Crises have brought existing problems such as crowd control to the fore, she writes. “Perhaps in future a visit to the Louvre or the British Museum or the Uffizi won’t be a touristic given but more like going to the theatre — seeing the ‘Mona Lisa’ could be like getting a ticket for Hamilton.”
Eike Schmidt, director of the Uffizi in Florence © Getty Watching Arsenal. A pint at the local. A window seat in a favourite café. A walk across the Atlas Mountains. Historians, journalists, novelists, and business people tell us what they are looking forward to most when life under lockdown is over.
Runs on items caused by the pandemic now include a new category: puppies. The demand for companionship during lockdown has sent demand on “puppy portals” soaring. One piece of advice: “A dog is not just for lockdown, it’s for life.”
Source: FINANCIAL TIMES
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