Digital Cables


Enza Paschke

While millions are affected by lockdowns and forced to work from home, companies are receiving a crash course in digitalization. In light of this, the immediate winners of the COVID-19 crisis seem to be Tech Giants, who are given a once-in-a-lifetime opportunity to rapidly expand their power and come out of the crisis stronger than ever. As social distancing is practiced and businesses start operating remotely, the demand for large online platforms has surged, with “Tech Titans” seeing their share prices rise while global markets face devastating losses. Stock prices of the video-conferencing app Zoom (which is now estimated to be worth $42bn) hit record highs, peaking at a value of $165, equal to that of Ferrari. Analysts skeptically view these trends and many warn about underperformance of the high-flying stocks. 

Shares in the 5 big tech giants, namely; Alphabet, Amazon, Facebook and Microsoft have outperformed the market, starting late January. But while these players are standing taller than ever, young firms in the industry are struggling. Amazon has reportedly planned to hire 100,000 new staff, whilst small startups are on the verge of collapsing and are at risk of being snapped up by the big giants. While the rest of the world is fearing the coming global economic recession, companies like Microsoft (the world's most valuable firm, worth $1.3trl) may be able to combat the “invisible enemy” and withstand the aftermath of the pandemic. Many analysts believe that what initiates as immediate responses to new circumstances under lockdown will turn into long-term adjustments in an individual's behavior regarding entertainment or labor. Although consumption patterns and choices have continuously been evolving, the current shock may accelerate the future that Silicon Valley has been building. 

As governments are dealing with the battle against COVID19, antitrust investigations and regulations may not seem a priority issue … But at second thought, the tech-related decisions should not be taken too light hearted. Just a few months ago Silicon Valley Titans were facing increasing public scrutiny of their power, but the global pandemic has prompted a dramatic reversal of fortunes. Once scrutinized tracking and data-storage apps are now viewed as desirable, even essential services, used in the health department to maintain public safety. Countries like China, Israel or South Korea have been quick to put the state´s surveillance capacity to use and enthusiastically implemented intelligence agencies in their fight against the pandemic. Contact-Tracing Apps are now also a hot topic in western countries and more than 2 million Australians (around 8% of the population) have reportedly downloaded the “corona-tracing” app. This changing relationship with national governments may be a key determinant of the crisis´s benefits to tech firms. Even EU officials and politicians, who have been preaching privacy laws for decades are now facing the trade-off between data-protection and health. But where do we draw a line between safety and surveillance? While governments are facing the challenge of appropriate implementation of technologies to successfully contain the spread of the fatal virus, they must consider that the cost of the “cure” shall not be worse than the disease. In light of this, we must keep in mind that once the crisis passes and normal life returns, changes and regulations imposed in the emergency state may stay intact.