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Speaker 1: Hi, everyone, Change is the new normal. Tech is the

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Speaker 1: new normal. Working remotely is the new normal. A lot

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Speaker 1: of things are the new normal, it seems today. And

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Speaker 1: switched on, we'll talk with Claire Curry, who leads to

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Speaker 1: Digital Industry researcher f BNF and digital industry analyst Curtie

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Speaker 1: Vasta about these new normals, how companies are using technology

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Speaker 1: to adapt and in some cases chase opportunities in the

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Speaker 1: short term, and how adaptation now could result in faster

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Speaker 1: tech adoption a bit further out, but the current climate

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Speaker 1: could also spook companies and set them on a path.

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Speaker 1: In word, our discussion is based on a report titled

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Speaker 1: Technology Radar, a COVID nineteen impact being IF. Users can

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Speaker 1: get this report on BNF dot com, the BENF mobile app,

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Speaker 1: and the Blueberg terminal. Users can also subscribe to the

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Speaker 1: Technology Radar at benif dot com slash series. As a reminder,

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Speaker 1: NF does not provide investment or strategy advice, and you

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Speaker 1: can hear a full disclaimer at the end of the show.

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Speaker 1: Him Mark Taylor, and you're listening to switch on to

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Speaker 1: BNF podcast. Claire Curti, Welcome. We talk a lot about

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Speaker 1: companies going digital or digitalization have been Can you start

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Speaker 1: us off by telling us what that means and what

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Speaker 1: that means in the era of COVID. Yeah, Fundamentally, it's visibility.

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Speaker 1: Are you able to see productivity a factory and maybe

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Speaker 1: why machines are failing or compare and rank your workers

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Speaker 1: based on what they're doing. It gives central control, but

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Speaker 1: it also decentralizes some of the things. Historically and a

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Speaker 1: utility maybe the only person who saw all of the

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Speaker 1: data from the pylons and transformers is one man at

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Speaker 1: a central substation and now in field wouldn't have tablets,

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Speaker 1: internet connected con see a lot more data. In theory,

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Speaker 1: it brings around productivity improvement, reduced labor costs, enhanced safety

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Speaker 1: and hopefully reduces THEO two emissions And in practice does

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Speaker 1: it work? I think in practice it's really beneficial. At

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Speaker 1: the end of the day, it's really important to know

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Speaker 1: how your plants will factory is operating in the best

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Speaker 1: way to have transparency around that is with data. The

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Speaker 1: more transparency you have, you can cut costs as a

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Speaker 1: result and as a whole range of benefits as a result.

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Speaker 1: So the world has changed recently, but several companies had

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Speaker 1: plans to go digital to capture more data for themselves.

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Speaker 1: Are those companies still active in pursuing those strategies. I think,

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Speaker 1: first and foremost, many have frozen budgets. So if you're

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Speaker 1: a company that was about to spend a huge amount

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Speaker 1: of money on a cloud transition for a lot of

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Speaker 1: money on a new hiring a new digital team, I

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Speaker 1: imagine that's frozen. Those that are already spending money on software,

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Speaker 1: I think it's reaping benefits. You can already see centralized data.

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Speaker 1: Your workers can already do remote operation maybe on the

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Speaker 1: guys that are developing digital text. That's really interesting if

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Speaker 1: you think about a G. General Electric, Siemens, or slumberge

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Speaker 1: Baker Hues. In the last two years, they've announced huge

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Speaker 1: pivots to digital, They've already committed the money, they've boards

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Speaker 1: approved it, and yet now they're seeing demand for that.

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Speaker 1: Any of their products go to the floor because clients

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Speaker 1: aren't buy anything from them, can be really introduced to

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Speaker 1: see if they accelerate the initial strategy, almost spend their

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Speaker 1: way out of a potential recession, or if a backpedal

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Speaker 1: and just focus on the things they knew they would

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Speaker 1: get out to begin with and what are they trying

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Speaker 1: to do in the very short term. Some are pivoting

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Speaker 1: directly to try to address the problem at hand. Is

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Speaker 1: that true? Yes. Up until now, particularly energy companies, they've

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Speaker 1: probably been a bit more hesitant to connect equipment to

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Speaker 1: the Internet and the cloud. But with the lockdowns and

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Speaker 1: social distancing in place because of the pandemic, what we're

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Speaker 1: seeing is companies looking to more remote monitoring type software

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Speaker 1: and looking to optimize their assets in that way, where

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Speaker 1: previously they're focused on using software such as predictive maintenance

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Speaker 1: to optimize their assets and do that on site rather

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Speaker 1: than remote technologies. So I think that's probably one of

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Speaker 1: the change as we might see in the short term

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Speaker 1: as the lockdown is in place and could potentially be

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Speaker 1: extended across countries. Yeah. I also think the vendors just

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Speaker 1: working out one on Earth, can we get out the

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Speaker 1: door if they have to make money this year somehow.

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Speaker 1: So we're seeing that hunger that Curtie was talking about

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Speaker 1: You're monitoring, for instance, playing out and we're seeing lots

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Speaker 1: of companies a bb Honeywell Ge some startups give away

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Speaker 1: free software. It's a nice story they can say they're

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Speaker 1: helping their customers in a hard time. That sort of

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Speaker 1: relationship building actually in heavy industry is so important. There's

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Speaker 1: real loyalty with your provider if you're actually helping them out. Also,

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Speaker 1: it's experimenting a lot of these industrials have already been

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Speaker 1: tried to work out ways of sharing cost savings or

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Speaker 1: some way of incentivizing their customers to buy digital just

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Speaker 1: not spending money up front. And there's another way of

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Speaker 1: them trying to do this just to get some sort

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Speaker 1: of stuff out the door, even if they make money

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Speaker 1: on it down the line. I mean in some of

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Speaker 1: these things are health care related to right, So the

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Speaker 1: altruistic view would be that they're giving people free access

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Speaker 1: to software to help them through the crisis, addressing the

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Speaker 1: problem at hand. But the more cynical view would be

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Speaker 1: that they're looking for longer term or mid term customers.

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Speaker 1: So you mentioned several companies that are launching new technologies,

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Speaker 1: new softwares to address the COVID nineteen crisis, trying to

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Speaker 1: catch this big fish. Can you comment on some of those.

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Speaker 1: So in China, Ali Baba has developed an AI algorithm

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Speaker 1: which basically uses CT scans to diagnose for the virus

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Speaker 1: and The company claims that it can diagnose in just

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Speaker 1: twenty seconds with nine accuracy, where traditionally doctors would take

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Speaker 1: fifteen minutes or more. I think that's really impressive, and

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Speaker 1: so Ali Baba is now offering the service to other

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Speaker 1: countries around the world are struggling with the national healthcare

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Speaker 1: systems being really under strain at the same time as

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Speaker 1: it being away for them to really promote their services.

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Speaker 1: I think there is a certain level of altruism. It's

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Speaker 1: a sad situation, but it's an interesting time for the

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Speaker 1: Chinese tech firms take advantage because healthcare is huge, it's necessary,

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Speaker 1: it's only growing as we age, and yet technology has

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Speaker 1: been unable to putty hack into it. IBM has been

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Speaker 1: trying for years with Watson, and just no hospital is

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Speaker 1: really willing to put the health of patients who can

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Speaker 1: absolutely sue in the hands of AI. But this is

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Speaker 1: obviously a different cattle of fish, and we're seeing a

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Speaker 1: lot of tech firms try Google included as a lot

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Speaker 1: of American firms. Alie Barbara is obviously jumping on that

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Speaker 1: Bandwagan second up. Chinese tech firms really just work in China.

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Speaker 1: They have a huge Chinese market some mother parts of Asia.

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Speaker 1: They have not tried to or been successful in tapping

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Speaker 1: into European and American markets. However, because China has gone

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Speaker 1: through COVID nineteen and they've developed hundreds of technologies to

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Speaker 1: tackle it, trace it, test for it. This is one

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Speaker 1: area where Alie Barbara actually is leading. We see a

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Speaker 1: lot of these tech firms trying to import technology European

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Speaker 1: countries that will take it, and the US has stepped out.

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Speaker 1: In your note, you mentioned that this could be a

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Speaker 1: new normal of data privacy as well. So companies that

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Speaker 1: are collecting all this data to help solve the problem

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Speaker 1: are also introducing a new way of operating for all

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Speaker 1: of us. I had to get to a baseball game

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Speaker 1: this summer that was canceled in London Stadium, and I

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Speaker 1: think about when we go back, it's likely going to

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Speaker 1: be the case that we'll have our temperatures taken when

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Speaker 1: we walk in the door. We're all going to be

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Speaker 1: comfortable with that. These are new normals. I guess you

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Speaker 1: could say, could you comment on that, are there data

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Speaker 1: protection issues to grapple within their future? Well, think about

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Speaker 1: what happened at nine eleven. The entire world change, the

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Speaker 1: way that you lie and suddenly you are banned from

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Speaker 1: bringing so much on an plane you otherwise could done.

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Speaker 1: You're frisked, you're checked, everything scanned, you have dogs sniffing

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Speaker 1: for drugs. I mean, everything has changed in the last

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Speaker 1: twenty years, and yet we just basically adapted because yes,

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Speaker 1: it's my privacy at state when I go to fly,

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Speaker 1: but I have to fly, or at least I want to.

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Speaker 1: I don't see why I wouldn't be okay with between

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Speaker 1: taken going to baseball or the theater or the cinema.

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Speaker 1: It might put me off going for a few months, maybe,

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Speaker 1: but I don't see it as a as a problem.

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Speaker 1: I guess that the challenges where is that day distored?

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Speaker 1: Who do you want actually knowing that you were at

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Speaker 1: that baseball game in that date, And that's where we're

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Speaker 1: seeing some interesting stuff coming out. I mean, Curtie just

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Speaker 1: finished some work on the EU and their kind of

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Speaker 1: data policy. But also then you guidelines around data protection.

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Speaker 1: So I think governments will have to step in at

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Speaker 1: some point. And obviously some regions of the world are

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Speaker 1: more insitive than others. So let's take a quick break

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Speaker 1: and when we come back, let's talk about the mid

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Speaker 1: term changes that we'll see in this new normal in

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Speaker 1: the way forward. So looking at today, we're all recording

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Speaker 1: this from home, right, And you've mentioned that a lot

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Speaker 1: of companies now are doing a lot of their work

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Speaker 1: from home, including collecting data, you know, and monitoring plants, etcetera, etcetera.

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Speaker 1: Can you talk about some of those changes that are

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Speaker 1: occurring in the industrial sector and whether they might stick. Yeah,

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Speaker 1: it's interesting, and we've seen a number of factories in

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Speaker 1: the US recently closed because they've had hundreds of COVID

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Speaker 1: naighteen cases because they clearly weren't enforcing any sort of

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Speaker 1: social distancing or masks in factories. But for our sector,

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Speaker 1: when in gas has its own problems, has other reasons

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Speaker 1: why there aren't many people working in fields and not

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Speaker 1: in cash right now, Like nectorial prices with utilities are

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Speaker 1: still working. I think it's a mandated job to keep

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Speaker 1: the lights on, so they're having to enforce remote monitoring.

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Speaker 1: I was talking to a client this morning who was

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Speaker 1: saying that they never thought they'd through the day when

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Speaker 1: someone they know is managing whole teams of infield workers

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Speaker 1: from their living room through remote monitoring, through augmented reality glasses.

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Speaker 1: Even that's hugely accelerated the way I think the workforce

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Speaker 1: is going anyway, which is enhancing safety by reducing the

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Speaker 1: of people climbing pylons or being an offshore oil rates.

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Speaker 1: So do you think it is accelerating changes we were

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Speaker 1: seeing anywhere? So some things that will be a sad

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Speaker 1: right now. So I think remote working absolutely is that thing.

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Speaker 1: I mean, I read a stat this morning that of

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Speaker 1: utility field workers are new every twelve month. It's a

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Speaker 1: job for young people, often men, and they move out

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Speaker 1: of that job as quick as possible, and it's on

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Speaker 1: rotations and also a lot of experience people are retiring,

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Speaker 1: they're very very near retirement age. Those people right now

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Speaker 1: on furloughs may not come back to the workforce if

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Speaker 1: their near retirement. They are the experts. So you begin

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Speaker 1: to have this twofold issue people coming back to work

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Speaker 1: who are young and new into the workforce, that what

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Speaker 1: they're doing be less people willing to be in the

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Speaker 1: field and do those hard jobs as they can do

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Speaker 1: the remotely, So they're going to end up I think

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Speaker 1: more remote monitoring, remote work, which ultimately requires so much

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Speaker 1: software and data and cloud computing and things you do.

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Speaker 1: It is scared of what else are you seeing in

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Speaker 1: the midterm accelerating the so cloud computing is likely to

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Speaker 1: really continue to search as it has. Microsoft mentioned that

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Speaker 1: they've seen a seven increase in the use of cloud,

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Speaker 1: particularly in Italy after the pandemic and the lockdown had

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Speaker 1: really set in place there. So I think it's more

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Speaker 1: likely that companies are going to be more reliant on

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Speaker 1: this and tech firms as a result, those offering cloud

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Speaker 1: services are going to become stretched in some cases, but

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Speaker 1: it's it's definitely going to benefit them in the long term.

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Speaker 1: The seasonality staffer is interesting. I was talking to Tom

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Speaker 1: in the wind team saying that most wind farms do

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Speaker 1: their operations, maintenance and spections in the summer, which is

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Speaker 1: very soon, and if you cannot get people to those

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Speaker 1: wind farms, or if they decide it's not appropriate to

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Speaker 1: do those huge overhauls of maintenance, they'll end up relying

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Speaker 1: a lot on software. Wind farm is interesting because they

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Speaker 1: have a bunch of software already attached to them, but

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Speaker 1: they're never the first go to point source of truth.

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Speaker 1: This summer could be the first time wind far rely

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Speaker 1: on the software to tell them actually you can skip

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Speaker 1: maintenance this summer, We're good, come back next year, in

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Speaker 1: which case they will reduce an amount of maintenance they're

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Speaker 1: doing because the software tells them everything's okay, which again

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Speaker 1: removes people from the field, reduces cars through the CEO

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Speaker 1: two emissions, and also means maybe they become more comfortable

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Speaker 1: using software like predictive maintenance about computing AI, it will

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Speaker 1: be really interesting. So in the mid term, now we

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Speaker 1: know that it's supply chain is stressed. Right we're seeing

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Speaker 1: notifications on Amazon, you know when you go to their

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Speaker 1: website that says essential deliveries get priority right now. The

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Speaker 1: rest has to wait. Do we see strain on the

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Speaker 1: supply chain and logistics going forward or will those things

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Speaker 1: get better or smooth out in time. Yeah. With the

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Speaker 1: factories being closed, wherehouses being closed, supply chains have been impacted.

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Speaker 1: Digitalizing supply chains can alleviate some of that pressure in

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Speaker 1: some cases. My current research note that I'm working on

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Speaker 1: is looking at tracking and tracing technologies and software that's

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Speaker 1: being used to really help supply chains manage their inventries better,

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Speaker 1: potentially even predict changes in demand for goods along the

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Speaker 1: supply chain. It's likely that we will see some industries

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Speaker 1: digitalizing their supply chains to protect themselves from fluctuations in

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Speaker 1: demand which could really impact their supply chains, and it

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Speaker 1: could help them manage their inventries better. So an example

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Speaker 1: of a tracing technology would be using something like bar

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Speaker 1: codes or QR codes or r f I D on

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Speaker 1: supply So, for example, medical supplies that are being sent

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Speaker 1: to hospitals, it would be really beneficial for those hospitals

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Speaker 1: to know where those donations are coming from and being

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Speaker 1: able to kind of trace them back um to to

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Speaker 1: that location. So these sort of applications could be particularly

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Speaker 1: useful in the healthcare sector as well as food that

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Speaker 1: scenario where we're likely to see more digitalization of supply

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Speaker 1: chains potentially. So this all seems like it could be

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Speaker 1: amazing or too little, too late, and it seems one

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Speaker 1: way to get out of this mass is through policy

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Speaker 1: right to get these programs, to get these startups through

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Speaker 1: these hard times to develop employees and technologies. Are we

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Speaker 1: seeing digital being thrown into these stimulus packages around the world.

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Speaker 1: It depends on the country's characteristics. Some countries care more

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Speaker 1: about saving jobs, some countries that come up about small businesses,

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Speaker 1: somet I just want to prop up national champions in China,

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Speaker 1: it's a lot about enforcing existing policies, infrastructure investment, ways

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Speaker 1: of funding existing technology giants and existing manufacturers, domesticating more

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Speaker 1: of their supply and helping support things like five G

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Speaker 1: network rollout that was happening already, and this is just

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Speaker 1: a way of linking those things, injecting more money, getting

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Speaker 1: more companies to sign on in other countries. At the US,

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Speaker 1: I think the stimulus package here is the beginning of

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Speaker 1: what has to be a bigger plan. The US has

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Speaker 1: avoided any sort of industrial policy for decades. The stimulus

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Speaker 1: package here implied startups couldn't even apply for the small

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Speaker 1: business funding, and that's brought about real challenges. So I

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Speaker 1: think maybe we'll see some countries definitely doing more support

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Speaker 1: national companies and others. Yeah. France, Germany and the UK

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Speaker 1: are three of the countries in Europe that have recently

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Speaker 1: announced stimulus packages, and I think the goal there really

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Speaker 1: is to ensure that innovation and technology development is really

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Speaker 1: protected and can continue despite deep recessions that we may

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Speaker 1: be facing in other countries. In Italy Spain, there's other

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Speaker 1: measures such as introducing temporary tax breaks and liquidity assistance

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Speaker 1: for startups as well. So I think countries with existing

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Speaker 1: startup hubs who have already been really investing in the

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Speaker 1: development of startups and small businesses within those regions, how

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Speaker 1: are really looking to pledge money towards watching them while

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Speaker 1: they're essentially lower in cash at the moment. I mean,

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Speaker 1: all this is really just terrible right now that there

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Speaker 1: could be some real positive to come out of this

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Speaker 1: with countries and companies that are developing new technologies to

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Speaker 1: take us into a new era after we get through this.

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Speaker 1: That's one way of thinking about it. The other cynical

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Speaker 1: way is we're still quite nascent. I think like industry

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Speaker 1: digitalization and like it doesn't make anyone money. I don't

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Speaker 1: see huge amounts of revenue coming the way of the

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Speaker 1: big industrials trying to do this. They may decide or

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Speaker 1: the bombers made aside. This is just it's too much

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Speaker 1: to launch a brand new digital business if you are

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Speaker 1: a Siemens or a big industrial or a or a

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Speaker 1: maker of oil field services equipment, and they just want

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Speaker 1: to pull back, and a lot of companies will become

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Speaker 1: more conservative. It makes it harder for them to launch

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Speaker 1: new products that customers need same time, the customers boards

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Speaker 1: may be saying, great, you had this fab innovation team

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Speaker 1: when times were great, and now the oil prices twenty

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Speaker 1: dollars a bowl for the next few months, ut defire

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Speaker 1: all those people. Unfortunately, commodities, firm, mining companies, welling gas

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Speaker 1: fms have very short term lenses. They're driven by the

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Speaker 1: quality price. They have no problem in laying off people

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Speaker 1: when they need to. I do worry that the breakthrough

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Speaker 1: some have made in digital I can't say they're definitely

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Speaker 1: going to keep on funding it. It's not a priority.

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Speaker 1: The priority is keeping going. And the same with the

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Speaker 1: big IoT industrials and our space that we follow. It's

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Speaker 1: very relent on startups. Startups have the best AI technologies,

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Speaker 1: some of the best vitalization of IoT data. These guys

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Speaker 1: rely on raising money, so it's really exciting. I hope

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Speaker 1: um the pandemic teaches us some things about what we

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Speaker 1: can do with technology right now. A lot of things

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Speaker 1: are still pilot stage, so watch this space highly interesting.

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Speaker 1: Let's absolutely do that. We'll have you back in a

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Speaker 1: few months to tell us more about which way you

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Speaker 1: think it's going. Courtie Claire, thanks for joining us. Nice

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Speaker 1: of stupid, great, Thank you, Bloomberg, because a service provided

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Speaker 1: investment recommendations, or a recommendation as to an investment or

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Speaker 1: other strategy. Bloomberginny F should not be considered as information

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Speaker 1: sufficient upon which to base an investment decision. Neither Bloomberg

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