Covid-19: The new business opportunities in the Middle East and beyond

While the Covid-19 outbreak has created pandemonium globally, some business segments from education and entertainment to telemedicine and telecommunications now have a bigger role to play than ever before

TOPSHOT-SPAIN-HEALTH-VIRUS

We are living in unprecedented times. A global pandemic is a bitter pill to swallow for individuals, governments and businesses.

The human impact of Covid-19 is hard to comprehend, and horrifying to calculate. Simulations of the United Kingdom and United States modelled by epidemiologist Professor Neil Ferguson at Imperial College London are brutally stark; an unchecked epidemic would see the virus infect eight out of 10 people, and cause over half a million deaths in the UK and 2.2 million in the US.

The implications for the developing world are even more grim, as social distancing and constant hand washing are difficult to achieve in overcrowded communities without access to running water. Plus Covid-19 is dangerous for the elderly and anyone with an underlying medical condition. Around the world, medical professionals are now urging self-isolation and social distancing as much as possible, to slow down the spread of the virus.

Economically, since Covid-19 first appeared in Wuhan in December, the world’s markets have collapsed, Brent crude has slumped to a 17-year low, airlines are teetering on the edge of bankruptcy, and consumption has all but ceased in the countries on lockdown.

Governments are scrambling to introduce rescue packages to bolster banks and support their people. The US Federal Reserve has reduced interest rates to zero per cent, and the Bank of England cut its rates twice in the same week, bringing them down to 0.1 per cent, the lowest ever in the bank’s 325-year history.

In the Gulf, Saudi Arabia has announced a stimulus package of SAR120bn ($32bn) to help businesses through measures such as exemption and postponement of some government fees. Meanwhile, the UAE has unveiled a Dhs126bn ($34bn) economic stimulus package to boost the private sector.

Despite financial aid, businesses in the worst affected countries will be all but gutted by the time this pandemic recedes, and in the interim, millions of staff will be laid off or pushed into unpaid leave – a report by the International Labour Organisation estimated that income losses for workers could reach up to $3.4 trillion by the end of 2020.

Notwithstanding the horrifying story that is unfolding, there is one silver lining in the form of virtual connectivity.

Smart governments, Silicon Valley and communication companies will play a key role in this war against the virus, as people in every country around the world are gradually persuaded, coerced and then legislated into socially isolating for extended periods of time. During these quarantines, we will still need to communicate, to study, to shop and be entertained.

Working from Home 
Telecommunications companies providing a reliable, fast internet connection are witnessing rising demand for their services. As illustrated by coronavirus-crippled countries like Italy and Spain, working from home will be the new normal; employers will have no choice but to adopt home working policies. Strict quarantining in China has already borne fruit; the number of new locally transmitted cases has dwindled in recent weeks from several thousand a day to none, and the total number of confirmed cases outside China has now eclipsed those inside the country.

Containment policies have already been introduced in the GCC. Saudi Arabia suspended office-based work in most of the private sector for 15 days, starting March 18, 48 hours after government employees were ordered to stay home. In the UAE, working from home is being strongly encouraged and tighter restrictions on movement are widely anticipated after the country closed schools and cancelled the entry of most visa holders.

The impact of these changes can already be measured. According to app analytics firm Sensor Tower, remote working app downloads in the Middle East saw a huge increase in popularity week-on-week between March 2-9.

Even ahead of restrictions starting in the Gulf, Microsoft Teams installations grew by 115 per cent and Google Classroom increased by 256 per cent. Meanwhile, video conferencing app Zoom downloads increased by 559 per cent and Hangouts Meet rose by 696 per cent.

Streaming entertainment 
As ‘staying in’ replaces ‘going out’ and schools are closed for months at a time, streaming companies like Netflix, Apple TV and WAVO OSN “will [also] see explosive growth”, according to Maha Abouelenein, communications expert and founder of Digital and Savvy.

Such is the predicted rate of demand that the European commissioner has called on streaming platforms to stop showing video in HD to “to ensure the smooth functioning of the internet”. In a tweet, Thierry Breton called on consumers to “#SwitchtoStandard definition when HD is not necessary”.

In response, a Netflix spokesperson said in a statement that it would reduce the bit rate of all its video streams for 30 days. “We estimate that this will reduce Netflix traffic on European networks by around 25 per cent while also ensuring a good quality service for our members.”

Abouelenein, who formerly served with Netflix said: “Not only do the streaming platforms have captive audiences, but [while quarantined], consumers will realise how much choice they have.” In her view, the availability of educational programmes and documentaries elevates platforms like Netflix beyond entertainment. “Consumers are choosing a huge variety of content; from educational stuff for kids, to comedies and even tutorials. You can learn DIY, cooking, home organisation, meditation and even music lessons.”

Education, Education, Education 
Parents are desperate for entertaining educational content for their children and teachers are scrambling to put their lessons online, as the prospect of months off school looms large.

According to UNESCO, over 850 million children and youth – roughly half of the world’s student population – have had to stay away from schools and universities due to the Covid-19 pandemic. Nationwide closures are in force in 102 countries and local shut-downs in 11 others.

UNESCO director-general Audrey Azoulay said: “This represents more than a doubling in the number of learners prevented from attending educational institutions, with further increases expected. Countries are trying to fill the void with distance learning solutions but the uncertain duration of the closures adds further complication to their efforts.”

Edtech companies are already experiencing extraordinary growth. When Chinese edtech company Yuanfudao offered free live courses, their system crashed for two hours as five million people attempted to log on at the same time. Meanwhile Indian unicorn BYJU has experienced a 60 per cent increase in students since it offered children complete access to its online learning app for one month.

In the UAE, the Hamdan bin Mohammed Smart University is making waves. It was founded in 2002 as a groundbreaking e-university, and when the UAE government announced the closure of the country’s schools in March, it created a course on tutoring online available to teachers and parents for free.

The university’s chancellor, Dr Mansoor Al Awar, said the speed of take-up was extraordinary. “In just a few days we trained 72,000 people, and that is not only in the UAE, but across the GCC countries as well as Egypt. We have also had clicks and registrations from the US.” The university is now planning two more free programmes, including one to upskill teachers on how to create online courses for their students.

It is not just education that children are missing out on at school. Social media site GoBubble says it has seen an increase of more than 400 per cent of registered schools across the UAE in one week alone. CEO Henry Platten explained: “With schools closed, families are turning to solutions which enable and empower children to safely engage with their friends to prevent isolation.”

Upskilling
Adults are using the extra time at home to learn. Coursera, one of the world’s biggest online providers of education has seen a 23 per cent month-on-month increase in overall enrollments among learners in the Middle East, and a 21 per cent increase in the UAE.

“There’s definitely a lot of people who are doubling down on learning core skills and data science and business,” explains chief enterprise officer Leah Belsky. “We have a pretty famous course by Imperial College in London on the coronavirus, and some of our top courses are ‘The Science of Well Being’, ‘Positive Psychology’, and ‘Managing a Virtual Organisation’.”

Belsky is of the view that adults are turning to education for different reasons: “People are at home, and they have more time on their hands, and they are anxious about their careers, their futures and their jobs. Learning is something that can help with that anxiety, but also people now have the space and time to make sure that regardless of what happens to the economy, they can come out strong. Also, Coursera is a global community and I think in a moment like this people throughout the world are pulling together [and looking for] spots where they can come together and be with learners from around the world.”

A time for reflection
Some business leaders are determined to find the silver lining in any crisis. Anand Mahindra, chairman of the billion-dollar Indian business Mahindra Group insists the Covid-19 pandemic “presents business with challenges but also some unprecedented opportunities”. In a tweet, he listed his reasons:
“1) We’ve acquired a precious resource: time for reflection. Use it to review strategies and portfolios.
2) Press the RESET button and recalibrate all costs and overheads.
3) Associates will have more time: solicit their ideas for business improvement.
4) Use the lull to build deeper personal relationships with customers.
5) We don’t know how long the containment might drag on, but prepare the business for a U or even V shaped recovery!”

Psychologist professor Bryan Robinson, an expert on mindful productivity and work/life balance and author of the book #CHILL agrees that it is sensible to turn your mind towards the positives that could come out of this pandemic. “I’m not talking about putting your head in the sand and pretending everything is okay when it isn’t. Our brain is wired for negativity; scientists call it the negativity bias. So when something happens, the uncertainty will trigger what we call the lizard brain or the amygdala, [and we] get caught up in the negativity. The whole idea of looking for the silver lining is really bringing balance to how our brain works.”

Health and hygiene
Individuals and businesses will approach this crisis in different ways. Not everyone will find it possible to “slow down and take stock”; the recent panic-buying in supermarkets, and sell-off on the stock markets show most people are currently being ruled by their lizard brains. Hygiene products, paracetamol and disinfectant are selling-out, and toilet paper has had to be rationed in countries like the UK, US and Australia.

James Michael Lafferty, CEO of Fine Hygienic Holding in the UAE, explained they have seen a massive uptake in orders, of three to four times normal sales. “Consumers are pantry-loading key household products, so we have seen an acceleration across all of our categories from toilet paper, to facial tissues and diapers. Our face masks have been a huge launch. We just opened a new plant in the UAE and it’s already running at full capacity, with orders 20 or 30 times more than what we can produce.”

The cautious elite are not taking any chances, and inquiries about life insurance have predictably increased. Carlton Crabbe, CEO of Capital for Life, an offshore life insurance provider based in Guernsey said: “We have seen high net worth clients looking to put in place significant amounts of insurance, with quote requests ranging from $5-$10m of life cover.”

Telemedicine is another sector experiencing strong growth, as patients seek virtual reassurance and diagnosis online, without the risk of infection from busy waiting rooms in doctors’ surgeries and hospitals. “Our fully qualified doctors are available within minutes via our app” explains Charlie Barlow, founder and CEO of Health at Hand, the first Dubai Health Authority fully licensed telehealth company. “You can have a live video consultation, and if a course of medicine is required, we can send that to you, or we can reassure you that it is not required and you are absolutely fine to get on with your day.”

Barlow also sees a silver lining to this pandemic, namely the growth of increased healthcare for the hardest hit. “We work with blue collar communities, who have limited access to doctors, and we’re now in an opportune position within the market that our technology product can actually help. We believe access to quality primary health care should be afforded to everyone, and not just the privileged few and through telehealth we can finally start doing that.”

An opportunity to reset? 
Any business hoping to emerge stronger from the Covid-19 pandemic should encourage its employees to treat this crisis as an opportunity to take stock, advocates Professor Bryan. “This could be an opportunity for people to slow down, and reset, and evaluate their lives. To sit on the riverbank and take stock of how they have been living, and hopefully when things turn back to normal, we can all change how we have been living and become healthier, balancing our lives.”