Scott Galloway, Professor of Marketing at New York University (NYU) Stern School of Business
The pandemic as a catalyst?
The coronavirus pandemic has given a strong boost worldwide to the digitalisation of every area of life and society, every industry and sector. And of course to the major digital platform companies. The coronavirus is often referred to as a digitaliser and driver of innovation, the catalyst for a New Normal. But is the coronavirus really the ultimate game changer? And what new normality is desirable for a healthy, sustainable future?
Scott Galloway takes stock. For the author and Professor of Marketing at New York University (NYU), the global spread of Covid-19 amplified pre-pandemic trends and social dislocations that had been apparent for some time. The positive thing about the crisis: undesirable developments are now more obvious. After the enormous global economic shifts of the past 15 years resulting from globalisation and digitalisation, Galloway sees the direct distribution of goods and services to consumers as the third and most recent epochal development. Digital distribution and tighter supply chains led to lower frictional losses and costs in sectors such as health and fitness, media, creativity, and work, and enabled major digital players such as Amazon and Apple, Facebook and Google – the Big Four, as Galloway calls them – to make astronomical profits, especially during the crisis.
Galloway sees the most significant shift in the health sector. Telemedicine, for example, is on the rise, with virtual doctor's visits leaping from one percent before to 30 percent during the pandemic. Covid also forced the education sector, such as universities, into digital teaching. The cost of going to university already exceeds the cost of living for the average urban citizen many times over. The result: bigger student debts, people start families later, impoverishment of younger sections of the population. Along with health and education, the traditional media are also under pressure. Media consumption has shifted from TV, radio, newspapers, and cinema to video on demand such as Netflix and the like. Advertising revenue is collapsing as a result of the massive loss of viewers.
While governments around the world tried to support markets and consumption with taxpayers' money, the big tech companies came through the crisis brilliantly, stabilised their turnovers with subscription models, and boosted their stock market valuation. Taxes? They hardly paid any. The Big Four are already provoking resistance, for instance in Europe: "It's up to the regulators to step in," the NYU professor is convinced. He is extremely critical of the monopoly position of the digital giants. Their dominance prevents investment in new companies, slows down innovation, and even prevents jobs in some sectors of the economy. By contrast, industries that are not dominated by monopolies, such as biotechnology, FinTechs, food, artificial intelligence, and blockchain, are experiencing an upswing. Smaller companies in particular are generating jobs, emphasises the marketing expert.
Recovery after Covid: the weakest set the pace
But what needs to happen in order to create a better future after the pandemic and to ensure affluent societies in growing national economies worldwide? Peter Blair Henry, Professor of Global Business & Economy at NYU, advocates a holistic and global response to the pandemic, and shifts the gaze away from the industrialised world to the emerging markets. "We don't know whether the global economy will recover," states the former adviser to former US President Barack Obama. But one thing is clear to Henry: "The global economy will grow only as stronger as its weakest link."
Unlike in the US, where massive vaccination, investment in infrastructure, and tax breaks are aiding the recovery of the healthcare system, boosting the economy, and fuelling consumption, according to Henry that confidence has not yet been restored in health and growth around the world. "Emerging markets are responsible for 60 percent of global growth," says the economist. "The global economy will only recover if these countries with their rapidly growing populations, increase their vaccination rates, get the pandemic under control, and stabilise their health systems and economies."
The answer lies in cities, says the NYU professor. Their populations will double from two to four billion people by 2030. In addition to knowledge transfer and support in the production of vaccines, Henry recommends investment in urban green infrastructures, especially in the growth market of Africa. "This is our greatest opportunity to reduce emissions, curb global warming, avoid migration problems by providing solid local jobs, and also to benefit financially from the growth of emerging economies. It's a win-win situation."
Communication, health, transport, and energy infrastructure, as well as water supply need to be expanded, according to Henry. "We have to think differently and bigger, become more creative in terms of financing as well." This includes aspects such as better interest rates and tax incentives for investments in green infrastructure projects. Emerging countries have experienced leaps in development as the result of digitalisation. Now data can be used to strengthen the health and transport sectors and make the world of work more attractive. "We can use increasing urbanisation to create a better world."
I think that the pandemic really did put every single society to the test: whether a health system, education system, logistics or the level of digitalisation and the ability to work remotely.
A better world is shaped by companies and the cultural power of their brands, with regard to the responsibility of business, explains Gregor Gründgens, Brand Director Marketing, Vodafone Germany. "Companies should have an idea of why they exist," this is Gregor Gründgens' translation of the often-overused word purpose. For the marketing boss, digitalisation and conscious handling of data are the key to enabling a liveable future for everyone. Digital tools have already been used during the coronavirus crisis to help overcome the most difficult stages in economic and human terms, and to maintain contacts, communication, and business processes. At the same time, they exposed both the good and bad sides of the digital world. Creativity alongside crude conspiracy theories; democratisation alongside disruption; innovations and their downsides such as high energy consumption as the result of increased data traffic. The coronavirus has also highlighted the contrast between convenience and data protection and the widening gap between poor and rich.
"Brands can resolve these contrasts," Gregor Gründgens is certain. But only under one condition: companies can’t simply adapt their analogue strategies to the digital world, but must think in terms of digital categories from the outset. This requires the right channels in order to develop direct customer relationships and facilitate digital engagement with customers and partners, which involves the skills of their employees. For Gregor Gründgens, companies like Vodafone are "digital enablers" and have to have the appropriate attitude. "We should always work with data in a way that creates added value for society."
According to Gründgens, brands shape cultural contexts and help to shape a community. They therefore need a moral compass in order to live up to this responsibility. People & planet first is the first principle of post-pandemic marketing and already illustrates what should be at the heart of any entrepreneurial pursuit. Followed by Act, don't tell. "We need story-telling, but we need story-doing more," emphasises Vodafone's Marketing Director, who sometimes finds there are too many letters and not enough deeds. Transparency is the new trust makes it clear that trust is needed to obtain customer data and to be able to use it for a better coexistence. Gründgens is also firmly convinced that the "data hunger" of the major platforms needs regulating. Don't support a**holes drastically expresses that advertising money should also be used responsibly. And Stay critical. Stay optimistic states that despite all the necessary critical perspectives, we should basically embrace digitalisation. "We should dance with ideas, not fight against them."
The New Normal: harnessing the momentum of the crisis
The coronavirus pandemic has relentlessly highlighted economic imbalances, infrastructure deficits, gaps in digitalisation, social grievances, and the gap between industrialised and emerging countries. Covid was disruptive, but also demonstrated the benefits of a digital society. And that is precisely where the economists and marketing experts see an opportunity to use the momentum of the coronavirus crisis to shape a future that is liveable for everyone. The New Normal focuses on people. Digital technologies are part of the solution. They make it possible for concepts such as sustainability, inclusion, and intergenerational justice to stand alongside growth and prosperity.
The New Normal means more than working from home, collaboration tools, and video conferencing. The New Normal, as the experts' views make clear, also means knowledge transfer and support in the global fight against the pandemic by digital means, regulation of major platforms, and preventing the development of monopolies. The New Normal relies on transparent, trust-building data collection and the handling of data in compliance with data protection regulations. This also calls for digital education, an understanding of how algorithms improve our coexistence, and how we can distinguish between information and disinformation. Companies and brands are cultural drivers of social transformation here. In companies, the New Normal includes the way in which innovation and product development are pursued or marketing and sales strategies developed. Staff also think and act in digital categories.
The digital New Normal is based on stable, high-performance, and intelligent networks that are based on resource-saving, climate-neutral energy supplies. The focus of future investments should therefore be on digital and green infrastructures, especially in emerging markets, which are not only growth markets but also a powerful lever in the fight against the climate crisis. Ultimately, the New Normal also means shaping the digital transformation of the economy and society with courage and optimism.