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Lithos Capital

May 11, 2020

It is more than obvious that life after COVID-19 pandemic won’t get back to how it used to be before. Coronavirus socioeconomic disruptions requires a notorious change in the normal order of action. Evaluating needs and priorities, and mapping them into specific time frames can help governments, businesses and individuals respond to a “new normal”.

Nowadays, after months of a widespread lock-down, we must notice how the global crisis has disrupted the strategic decision-making of multiple organizations around the world, and how they’re trying to adapt to change by building new strategies which can look beyond the immediate crisis.

One thing we already know is that the current crisis is boosting an already growing sector: digital industry. Proving that such a big part of the daily activities can be done at the distance. From virtual meetings to automated factories, online orders to drone delivery, digital services are growing fast and on high demand, allowing the born of a lot of new sectors and activities. That’s why we can see firms with high digital agility adapting really quick to the ongoing crisis, while there are others just starting to skill up in response to the challenges implemented to their business models.

Economic advantages due to Digital Investment

There are several examples such as Southeast Asia which proves that digital investment works as a powerful hook to attract different kinds of Foreign Direct Investment (FDI), which in turn can bring technology, know-how, jobs and growth. At the same time, digital firms invest abroad to be close to customers, access local knowledge, open new markets and more. FDI is also often the largest source of finance for developing economies. The World Economic Forum’s new Digital FDI initiative seeks to identify policies, regulations and measures that governments can adopt to attract such investment.

Governments that encourage such new business models creating a friendly environment for digital firms to operate and constantly promote their digital economy are the most likely to have greater success in attracting investment and achieve a faster recovery.

Traditionally non-digital firms evolving to digitalism

Digital adoption goes beyond brand new business digital models, the digital industry has the power to change the traditional ways of managing a business, it can go from a simple digital stock register, to a huge variation of digital payment methods, all of them with the goal of reducing obstacles mainly caused by physical barrier, simplify supply and value chains, and provide speedy delivery of goods and services.

Investment on digital infrastructure

Attracting investment for digital infrastructure requires various regulatory frameworks, and it’s essential to foment investment in payment processors. The best part of attracting investment in digital infrastructure is that it will significantly benefit local companies, especially small and medium entrepreneurs. For example, Visa invested in Nigeria’s Interswitch, a payment processing company, making Interswitch a unicorn overnight.

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