Technology Companies and Getting Through Lockdown

Technology companies are well positioned to capitalize on the challenge presented by the COVID-19 pandemic. The mainstay of their business is exactly the technology required for remote work and study as demanded by health and safety requirements during coronavirus lockdowns and quarantines. Their products make remote collaboration possible on multiple dimensions. Foreign companies operating in China gain three primary benefits as they help tackle the COVID-19 pandemic: increased data on usage of their products, greater consumer familiarity with their services, and higher prioritization of internet capacity in development.

Although many companies are offering their online services for free or boosting the features available to lower-tier subscribers as a public service, they stand to concretely benefit from their continued engagement with China. Continued development of China’s innovation capacities and network infrastructure will mean increased demand for high-tech products and services. Companies that continued operating in China during the worst parts of the COVID-19 outbreak will be in a good position when the economy goes back to normal.

Countries face many challenges, and the operations of foreign countries stand or fall with the success or failure of their host countries. The companies who responded for this story showed some of the different challenges they faced or the areas in which companies must improve. Foreign managers stuck abroad and office workers stuck at home must be able to communicate effectively with each other. Production lines must get back to work. Logistics must ensure sanitary shipment of products.

In a March 13 press release, Apple reported that all of their stores in the Greater China region had reopened. And to aid efforts to halt the spread of the epidemic, Apple is closing all retail stores outside China, but the App Store and online sales and support will still be available.

Passing Through the Storm

Intel, an American technology company and manufacturer of semiconductor chips, provided a March 9 article that Ian Yang, Corporate Vice President and President of Intel China, wrote for the Chinese publication Economic Daily. In the article, Yang outlined a few areas in which firms will have to adapt both to get through the present COVID-19 outbreak and to preserve resilience in future crises or public health emergencies. Further, Yang expressed confidence in the value of long-term engagement in China.

Yang highlights the transition from labor-intensive manufacturing to intelligent value-added manufacturing. The demand for implementation of smart technologies in manufacturing is going up, and these technologies enable firms to respond more effectively to severe crises. Automated production lines would remove the human element: in future crises, fewer personnel would be required, so an epidemic would create fewer stoppages than in labor-intensive manufacturing. He further highlights the current priority for remote work and study arrangements, and that this will continue into the future as a necessary domain for innovation. There will be increased demand for the ability to collaborate remotely in many fields of endeavor, and this will challenge infrastructure, operators, and providers of information technology (IT) services.

Many services are being moved online, such as registration tasks, workplace collaboration, logistics, and shopping. This urges IT firms to increase processing power in cloud computing, 5G and edge computing will have to support more devices online simultaneously, and internet speeds overall will have to rise. Yang asserts that the shift to online services will accelerate China’s shift to higher-grade manufacturing and services and that the infrastructure in demand will further support innovation in the Chinese economy, not just alleviate slowdowns in internet speed during the COVID-19 outbreak.

Noting the fact that some firms are looking at moving manufacturing out of China, Yang declares that China’s swift response to the outbreak actually shows that China is a reliable place to stay long-term. China’s capacities in industry and in stable governance cannot be replicated by other countries, asserts Yang, so multinational corporations should formulate long-term strategies to remain engaged with China and have confidence in this country’s long-term potential.

Stating that Intel has been in China for 35 years, Yang says that Intel has gone through many ups and downs with the Chinese market and will continue beyond the COVID-19 outbreak. The current crisis will challenge whether a company can “run a marathon” and not just a short “sprint”. With its products and services being key supports for some of the key technologies in high demand with many people working or studying from home, Intel is in the game and its own corporate longevity is tied up in guaranteeing future IT reliability for Chinese users and consumers.

Public Service Marketing

American IT company Cisco is helping keep Chinese remote workers connected. Cisco provided information about the usage of their service Webex, which allows for remote working. Traffic on China-based Webex connections has increased by a factor of 22, and in Japan, South Korea, and Singapore the number of users is going up by a factor of four to five. Morever, the average time spent on video meetings has doubled. Cisco is offering it for free in all 44 countries where it is available as a public service.

For companies like Cisco that are able to offer a critical service during the COVID-19 outbreak, greater public familiarity with their products and services gives them valuable brain real estate. Many people choose to go with what they know works. During these months of self isolation and social distancing, Cisco is in effect offering a free trial of its products. At least some users who come to rely upon it will become paying customers. Cisco joins Chinese companies offering products free like WeChat Work and Ding Talk, so business competition continues all the way to who can offer a better public service. Competition is being made to serve public interest, and everyone may turn out to be a winner.

Problems and Solutions

Problems faced by all companies include travel restrictions, quarantines, supply chain and logistics stoppages and delays, and strict reexamination of ways of working. Apple, Intel, and Cisco are some of the companies offering connectivity solutions. As demand for internet services has risen and viability of working online is proven, China will continue to develop its already improving internet and IT infrastructure. Deciding to remain in China and carry on with business is not just a matter of public service; it is a matter of remaining in business. For now, enhanced remote collaboration and communication technologies will help companies manage the current conditions while the new normal is figured out.

COVID-19 strikes the most critical place for business: the human element. Supply chains may shift, to where electronic devices are not manufactured across three continents any longer. Technology, methods, and materials may be copied, but culture and creativity cannot be copied. IT and related companies help keep the world connected to continue linking the human element in every corporation, even if manufacturing becomes more localized to limit the impact of supply chain disruptions. Apple, Intel, and Cisco are deeply integrated with China and look to help the rest of the world remain connected as well.