For the many who crossed the digital divide this year, there will be no turning back.
The Covid-19 pandemic forced Americans to replace the physical world en masse with the digital world within months. As retailers learn to operate without stores, business travelers without planes, and workers without offices, much of what started as a temporary means will likely become permanent.
“Covid has acted like a time machine: It brought 2030 to 2020, all of these trends, as organizations thought they had more time, quickly accelerated,” said Lauren Badelford, Vice President at Shopify Inc. The number of merchants using the company’s e-commerce platform increased by more than 20% between January and June, to 1.4 million, according to broker Robert W.Baird & Co.
The reversals are already being felt in everything from the stock market to corporate spending patterns to declining physical cash. In 2020, investors have rewarded companies with digital-intensive and light-assets business models such as online used carvana company Carvana and Airbnb Inc. And Amazon.com Inc. Or companies that provide the infrastructure that makes these models possible – like Shopify and Zoom Video Communications Inc. And Microsoft Corp. Now less on office space, travel and more on cloud computing, collaboration software, and logistics.
In many ways, digitization is simply the next chapter in the century-old process: the physicalization of the economy. As agriculture gave way to industrialization and then services, the share of economic value derived from tangible materials and muscles diminished while the share of information and brains derived from information grew. Former Federal Reserve Chairman Alan Greenspan liked to note that economic output has become steadily lighter.