Editor's Note: The following is a guest post from Jeff Schmidt, chief revenue officer at DroneDeploy.
In October 1913, Henry Ford debuted the textbook example of industry-changing innovation: the assembly line. This introduction transformed the face of industrial labor over the next century, and most companies still feel the reverberations of its impact to this day.
Initial inklings of the assembly line, though, had appeared in Ford’s Highland Park plant six months earlier. Engineers were experimenting with a smaller line for building the Model T's magneto ignition system. After continuous testing and careful honing, they implemented the larger concept throughout the rest of the plant. By 1916, Ford’s production skyrocketed to 585,388 units, eclipsing competitors Chrysler and General Motors.
While companies' commitments to innovation today may not result in the jaw-dropping returns the assembly line brought to Henry Ford, technological adoption is still essential for company progress. Operating at the forefront of technological innovation can introduce both long-term and short-term competitive advantages for those who dare to take the leap. Not only that, but COVID-19’s widespread business impact is showing companies that innovation is no longer a luxury — it's a necessity.
A resistance toward innovation
According to research by McKinsey & Company, 90% of executives believe COVID-19 will fundamentally change the way they do business over the next five years, indicating that the pandemic’s impact is here to stay. However, the same study shows that executives’ commitment to investing in innovation has radically dipped. Instead, they focus on the short-term issues arising from COVID-19 and stabilizing the core of their businesses.
While times of uncertainty and seismic market shifts often call for radical re-imaginings of operations, most companies would do better maintaining their innovation goals. Companies willing to embrace emerging technologies are better suited to address some of the largest challenges coming out of the pandemic, such as the shift to remote work, adapting to new public safety norms for any onsite operations, and the need for collaborative digital platforms.
History tells us the same. The 2002 SARS outbreak, for instance, can be looked at as a model for the current pandemic, in part due to its impact on consumer adoption of technologies like e-commerce and digital payments. When SARS first appeared across East Asia, the shuttering of brick-and-mortar storefronts and a reluctance to engage in cash purchases bolstered the mainstream presence of contactless digital payments and QR codes across the region.
According to the World Economic Forum, nonbank online payment platforms in China processed the U.S. equivalent of nearly $35 trillion in 2019. In comparison to the U.S., CNBC reports that major mobile payments apps had less than 10% adoption rates in 2019.
Changing Chinese consumption habits during SARS also contributed to the rapid growth of Chinese e-commerce giant Alibaba, which turned its first profit in 2002 when SARS began spreading across East Asia. In comparison to today, Alibaba has reported that "its fiscal first-quarter profit more than doubled from the same period a year earlier," adding it to the short list of predominant technology companies that have actually seen profits soar as a result of the pandemic.
Globally, we’re now seeing a similar push at every level of business to digitize and adapt to limited in-person transactions. Companies that are reluctant to adapt to these changes or hedge their bets on a quick recovery and return to pre-pandemic behaviors are putting their operations at a significant disadvantage.
The rise of robotics
When worldwide shelter-in-place orders went into effect, robotic and automated devices became the perfect socially-distanced workers for all types of operations that typically require an onsite presence — particularly within industrial verticals such as construction, agriculture, manufacturing, utilities and energy.
However, the shift toward a more extensive reliance on robotics and drones is most easily handled by companies that began integrating these technologies into their operations well before the pandemic. These "early adopters" can be more agile in addressing sudden threats to their core operations and face less of a learning curve than companies reactively adapting to market changes.
Returning to the example set by Ford, that company has retained its innovative spirit when it comes to emerging technologies. Since 1986, Ford has consistently incorporated 3D printing technologies into its manufacturing process, creating various efficiency and worker safety benefits. The same 3D printing technology that may have provided Ford a competitive advantage in the '80s has also arisen as a key component of the company’s COVID-19 response, helping the company produce much-needed ventilators and PPE.
History has shown that the companies to embrace innovation and emerging technologies tend to fare better than their traditional counterparts, particularly when it comes to reacting to times of uncertainty and seismic market shifts. From changing consumer habits to new public health restrictions on highly-physical industrial operations, the global landscape has shifted significantly within the past six months and it's time companies retool their operations accordingly.
Without rapid technological adoption, we should expect to see many companies fall by the wayside due to the impacts of COVID-19. Not only is adoption necessary for the present, but it can significantly help industries "future-proof" their operations for any other disruptions or threats on the horizon. In our current sink-or-swim moment, companies of all sizes can greatly benefit from a proactive approach to innovation, rather than be caught on the back foot in the years to come.