This is the latest installment of my ongoing series of discussions with entrepreneurs, venture capitalists and corporate leaders on what to expect as the world recovers in the post-Covid era in terms of technology and innovation.
There will be an abundance of digitally driven opportunities arising in the post-Covid world, but as with all things, every industry will have its own story. For manufacturers, that may take the form of highly networked, intelligent machines. In healthcare, it may mean delivery of services via telemedicine. Every industry has different digital touchpoints. Below, we share what observers within selected industries say what entrepreneurs and innovators can be looking at in the world emerging in 2021:
Energy as a Service: The energy space — an industry marked by slow sales cycles, existing regulations and difficult market entry — is ripe for disruption by artificial intelligence and machine learning, says Emmanuel Lagarrigue, chief innovation officer for Schneider Electric. Our current energy infrastructure “cannot meet the growing energy demand and the traditional grid is currently relying on technology that has barely innovated in the last 100 years, becoming obsolete as more distributed renewable energy generation and microgrids become mainstream. AI and digital technologies can be used to manage the existing grid more efficiently, enable renewable energy to be added, improve energy efficiency of buildings and create new energy markets of energy trading.”
Through low-cost sensors and electronic devices, “companies can capture more real-time data than ever before to manage assets and energy usage and monitor remotely to predict issues before they occur,” Lagarrigue adds. Much of this can be delivered through “energy-as-a-service” models that get around the nearly $3 trillion required to upgrade the global energy infrastructure, says Lagarrigue. “For example, commercial and industrial clients can now transition to renewable energy and energy self-sufficiency through microgrids as a service. Large infrastructure projects such as airports can deploy public/private partnerships and upgrade facilities to be modern, resilient and sustainable through energy-as-a-service contracts.”
Manufacturing: developing virtually: With the increasing prevalence of Industry 4.0 initiatives — fielded on the Internet of Things— today’s manufacturers are becoming digital enterprises as much as they are widget producers. This opens the door for opportunity for entrepreneurial and innovation opportunities in the manufacturing industry that has all the same fervor normally seen in tech companies. “We tend to think that the businesses that are going to fare the best are those squarely in the tech, software-enabled, space,” says Ajei Gopal, CEO of Ansys. “But manufacturing companies are just as nimble, and we see a huge opportunity to accelerate their adoption of digitization technology in the post-Covid era.”
For example, “digitization has modernized and accelerated the product development process,” Gopal illustrates. “Few products are sketched by hand on a drafting table today. Instead, the development cycle – from ideation to design and analysis to manufacturing to operations – occurs virtually. In fact, in the early phases of the modern development lifecycle, the product itself is entirely digital.”
Technologies such as CAD and simulation enable engineers and analysts to “build and break their product thousands of times – and do so in the safe and cost-effective digital environment,” he adds. “Think of it as a digital sandbox.” Vehicle manufacturing — especially with the development of electric cars and autonomous cars are examples of how manufacturing business models are evolving with digital. “Those both require an enormous amount of testing, which can be done through simulation, even during lockdowns,” Gopal says.
Software: Overcoming ‘subscription fatigue’: Software has been at the epicenter of innovation entrepreneurial opportunities. But industry experts caution that the world now seeks more than solutions simply offered online. Needed are software solutions that focus on wowing the customer. “While investors favor subscription and other recurring revenue models, many customers are getting subscription fatigue,” warns Frost Prioleau, co-founder and CEO of Simpli.fi. “In turn, business models are evolving that drive high lifetime value to customer acquisition costs ratios recurring revenue without subscriptions, based on ease of use and high Net Promoter Scores.”
Twenty years into the SaaS/cloud era, “it’s becoming harder to find any white space building the next ‘Cloud for x’ solution,” agrees Andy Vitus, partner with Scale Venture Partners. “With fewer and fewer obvious opportunities, entrepreneurs are already starting to figure out what comes next: a generational shift in software itself. Software has long been a tool that people use to accomplish a task — like scissors or a calculator.” AI and machine learning, APIs, and IoT are opening up a new dimension for software-based delivery, he adds. “Each of these technologies supercharges the others, opening the door to truly next-generation software that intuitively works for us. Software with the power to deliver a new wave of productivity and growth.”
Insurance —Raising speed limits: Insurance has long been a fairly conservative industry — but with the entry of Insurtech companies that are looking to digitize many aspects of the industry, things are changing fast. “We’ve seen more excitement in technology than ever – and are predicting more innovation in the next decade than we’ve seen in several decades prior,” says Matt Foster, chief operating officer of Duck Creek Technologies. “Lots of fast movers, lots of reasons to innovate and, while insurance isn’t usually the first to move, once disruption begins, organizations move quickly.”
SaaS and cloud platforms are delivering this acceleration, Foster says. ”Insurance is migrating to SaaS so they can focus on delivering insurance better – they do not want to be consumed by the previously-mentioned weight of data centers or vendor integrations. These are often barriers for startups and companies of all sizes to moving fast, and its where SaaS really delivers on value and boosts the reality and viability of getting good business ideas to market.”
“Not every purchase will take place without the need for a human, consultative touch, but engagements will increasingly start digital,” Foster adds. “In insurance, we’ve already seen this take hold on personal lines, but we’re also now seeing increased interest in more traditional commercial lines for both selling and servicing through digital channels. While insurance relies on very infrequent consumer touch points, customers are still often looking for a consultative approach. This will remain, but in today’s environment, consumers will first start the buying process digitally.”
Healthcare: Telehealth is here: “The technology that will lead to the next economic boom is telemedicine,” predicts Will O’Connor, CMIO of TigerConnect. Frost & Sullivan projects 7X growth in telehealth by 2025 as the pandemic continues to reshape care delivery, he relates. “During Covid-19, connecting with healthcare professionals on your phone rocketed from a fringe idea to a mainstream force in a matter of months. Patients are realizing there is no reason to slog through traffic for a five-minute non-urgent appointment when you can check in from your home, get reminders via text message and have a face to face conversation over video. Virtual care is one welcome cost-cutting and time-saving revolution whose time has come – and could well prompt a broader tech revolution across healthcare — at last.”
Education: Platform as classroom: “Nothing spurs innovation like people experiencing problems, and right now, remote education comes with a slew of paint points,” says Adam Enbar, CEO and co-founder of Flatiron School. “Educators are relying on Zoom and Slack to teach and engage with students, but we’re realizing it’s falling short in replicating the traditional classroom experience. The truth is that it was never meant to be a substitute. In fact, no ed-tech tool or platform can or should replicate the in-person classroom; tech’s role is to create new experiences altogether. Zoom and Slack usage will go down when things are back to normal. In lieu of these tools, we’ll see a boom in technology that is built by entrepreneurs looking to create entirely new experiences custom to the remote classroom experience.”