How an IT startup turned challenges of the COVID-19 into advantages
The pandemic impacted companies working in close cooperation with the information and technology sector and became the driving force for digital transformation.
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COVID-19 and consequent lockdowns have become the biggest challenge for all types of businesses, particularly those within the IT sector. In a short period of time, a large number of corporate and company staff members started working from home offices. For example, in EU countries alone, the number of employees practicing telework has increased from 5.4% to 40% during the pandemic [1]. In turn, the demand for various digital solutions has been strengthened.
Responsibility for this increase in demand was assigned to the IT sector. It included ensuring sufficient capacity as a result of significant growth in users, as well as the protection and security of information. Businesses started optimizing their processes and using the accessible digital tools as much as possible. Conferences, meetings, and even lessons began taking place in virtual rooms instead of offices or institutions. Zoom, which quickly became one of the most frequently used applications for such purposes, demonstrated a 227% growth in unique users throughout Europe, Africa, and the Middle East during the first wave of the pandemic alone [2].
Existing digital tools have therefore been extensively used during the pandemic by businesses, though some companies found the search for appropriate solutions too complex. As a result, the growing demand for digital transformation has become a driving force in the development of the IT sector. According to Eurostat, the information and communication industry has become one of the leading sectors in employment growth during the first quarter of 2020 [3].
In addition to these statistics, we would like to focus also on expert opinion from the co-founder of the software company VoxiAl, Alexander Kozhevnikov. He confirmed the positive impact of COVID-19 on the industry. With each new transformation, however, various factors continue to change, and the process is never smooth.
Interdependence of industries: the IT sector and taxi aggregators
Interdependence of industries: the IT sector and taxi aggregators
VoxiAI faced its most significant challenge yet during the first wave of COVID-19 in Russia. The company created artificial solutions for collecting phone orders and worked in close cooperation with the biggest taxi aggregators. Following the lockdown of March 2020, restrictions on movement triggered a sharp decline in demand for rides. According to Alexander Kozhevnikov, their company lost 80% of calls [4] during this period.
In this context, it is important to note that in a population of 144 million [5], the number of taxi passengers ranged from 15.5% to 45.7% depending on the size of the city [6]. A clear and abrupt drop in the demand for rides has heavily affected both the transport industry and the IT sector. Despite this impact, Alexander emphasized that the situation in Russia has since returned to normal for taxi aggregators during April and May 2020 [7].
This may be closely linked to the fact that considerable attention has been paid to the integration of artificial intelligence and various smart solutions in their systems. Using VoxiAl for collecting orders especially minimized the need for human resources during the pandemic period. In comparison, companies that tend to rely on employees from agencies or call centers rather than on technology have faced serious difficulties. As a result of lockdowns and the requirement for office employees to begin working remotely, the process has been almost entirely reorganized.
The issue of depending upon human factors became obvious. In response to this issue, many taxi companies are now seeking digital solutions; according to Alexander Kozhevnikov, the number of requests for cooperation with VoxiAI has already increased [4]. In addition, COVID-19 also became a driving force for the development of the wider IT industry. More recently, Alexander has collaborated with colleagues to create Daw Software, which seeks to provide an innovative solution to tracing contacts with COVID-19 and preventing further business closures as a result of potential infections in office environments.
The Call: More attention to the fast-growing IT industry
There remains little doubt that the COVID-19 has changed the world as we know it, and has demonstrated the potential for the growth of the IT industry. A lack of professionals, however, could impede the development of the whole sector. For example, in cyber security alone the available positions are expected to increase to 3.5 million in 2021 [7]. As a result, governments in cooperation with educational institutions should provide both vocational training and increased funding for programs related to the IT sector, in order to avoid further issues with employment in all sectors in the future.
Moreover, the use of modern digital tools should become commonplace for companies and institutions in order to avoid shutdowns, which harm both businesses and the wider economy. Companies should conduct training for employees and practice the hybrid model periodically, in order to develop the necessary skills for both office and home-based work.
Conclusion
Conclusion
In summary, it is important to note that COVID-19 has considerably expedited the transition to digitalization. Using smart solutions during the pandemic, both companies and institutions have learned how to optimize processes and prepare for emergencies. As a result, the growth of the IT industry may be able to prevent other sectors from shutting down under similar circumstances in the future.
Written by Lyutsiya Shlafman, an independent researcher and market analyst with a Master’s degree.
Edited by Olivia Grace
September 2021
In 2020 Think Tank AlterContacts launched the Lockdown Economy, an international non-profit grassroots social-economic and educational initiative to help small businesses and self-employed professionals overcome the challenges of the pandemic and reactivate the economy. It is registered by the United Nations as an Acceleration Action for SDG. From May 2020 until July 2021 we have been collecting insights from small business owners and self-employed professionals from different business sectors and countries to see how the COVID-19 pandemic affected their business, their life, and future. This article is based on the field research of the Lockdown Economy.
References
References
1 - European Commission. (2020) Science for policy briefs. Telework in the EU before and after the Covid-19: where we were, where we head to. p. 1. Available at: https://ec.europa.eu/jrc/sites/default/files/jrc120945_policy_brief_-_covid_and_telework_final.pdf
2 - Zoom. (February 1, 2021). Okta Reports that Zoom is Top Video Conferencing App. Available at: https://blog.zoom.us/zoom-top-video-conferencing-app-okta-businesses-at-work-2021/
3 - Eurostat. (August 5, 2020). National Accounts: COVID-19 impact on EU industries. Available at: https://ec.europa.eu/eurostat/web/products-eurostat-news/product/-/asset_publisher/VWJkHuaYvLIN/content/DDN-20200805-1/pop_up
4 - Think Tank AlterContacts, Lockdown Economy Initiative. (July 5, 2020). Lockdown in a Tech Startup with Alexander Kozhevnikov. Small Businesses Respond to Coronavirus. Available at: https://www.youtube.com/watch?v=2ZE8Bfre3no
5 - World Bank. (2020). Population, total – Russian Federation. Available at: https://data.worldbank.org/indicator/SP.POP.TOTL?locations=RU
6 - Analytical Center for the Government of the Russian Federation. (October 9, 2019). Taxi market becomes stable. Available at: http://www.ac.gov.ru/en/news/page/taxi-market-becomes-stable-24201
7 - Steve Morgan. (October 24, 2019). Cybersecurity Talent Crunch To Create 3.5 Million Unfilled Jobs Globally By 2021. The Cybercrime Magazine. Available at: https://cybersecurityventures.com/jobs/
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