It would be fool-hardy to think of any industry as completely “recession-proof,” but it is undeniable that tech-enabled sectors may be more likely than others to withstand COVID-19 and its aftershocks.
It does seem like a boom time for the digital economy as people find new ways to work and communicate, and many businesses take their services online.
Amid a pandemic, it cannot be entirely sure which sectors or companies will hold their own. However, due to the nature of COVID-19, tech-enabled companies are well-positioned to witness increased demand from individuals, businesses, and even governments to bridge the existing infrastructural gaps.
For investors looking to build a recession-resilient portfolio or business leaders looking for new opportunities, there are a number of sectors that may be better equipped to thrive during this pandemic.
In the following parts of this article, we identify three sectors that are likely to survive and even thrive despite the COVID-19-fuelled economic crisis.
- Fintech/Digital Finance
Given the stay-at-home orders and debates over the risk of infection due to the handling of cash, mobile payments are likely to become more popular.
In Kenya, both telcos and banks that operate mobile money services, have either eliminated or significantly reduced transaction fees.
In an earlier story, we had detailed how the suspension of certain fees was influencing the activities of mobile money users in Kenya. Nigerian fintech startup, Paga, is also achieving the same, having reduced fees during this period. In South Africa, online payments are also soaring.
Even before prior COVID-19 happened, fintech somewhat has a reputation as the largest destination for venture capital investment in Africa. In 2019, it accounted for over 50 percent of the USD 1.34 Bn raised by African startups, as highlighted in the 2019 African Startup Funding Report put together by WeeTracker.
By leveraging technology, companies in Africa have pioneered mobile money and introduced new approaches to online payments, lending and investments in a region where retail banking and consumer lending remain underdeveloped.
COVID-19 is likely to accelerate this trend further as more people are likely to get on board the digital finance train.
- Digital health/Health-tech
Africa’s fragile healthcare system already seems strained as it is. The deficiencies of the healthcare sector mean that only a small number of infected patients can be handled at a time. This is due to the limited number of well-equipped hospitals and the shortage of skilled medical personnel.
Some of these holes in the healthcare systems can be plugged with technology. These tech-enabled solutions could involve software for self-assessment and symptom-checking, freeing up doctors to attend to severe and urgent cases.
Startups like 54gene, LifeBank, and Flying Doctors Nigeria are among many African health-tech companies that are already making an impact at this crucial time.
On its part, 54gene raised USD 500 K within 24 hours of launching a fund at scaling COVID-19 testing. More recently, the startup closed a USD 15 Mn Series-A round and rolled out mobile testing labs.
Our mobile laboratory allows us to offer COVID-19 testing services to multiple states quicker due to the ease of transport and mobility it provides.
Our mobile lab’s unique plug and play feature also eliminate the logistics of shipping samples to another location for the processing, which reduces turnaround times for test results.
LifeBank and Flying Doctors Nigeria are also contributing immensely on the frontlines of the war against the pandemic.
In addition, Wellvis, a Nigerian health-tech startup, has created a COVID-19 Triage Tool through which users can check their COVID-19 risk category. The solution also provides for remote medical consultations.
Moreover, technologies that support the delivery of medical equipment to remote places, reaching places where they are urgently needed, are also coming to the fore.
Zipline, a medical drone company, currently operating in Rwanda and Ghana, for example, is currently holding emergency stocks of masks and gloves so that they can be delivered to hospitals and clinics within minutes.
Meanwhile, Ghanaian startup, mPharma, a prescription drug manager for providers and payers in Africa, is developing software that will enable doctors to schedule tests and receive results once completed.
All these digital health technologies are kind of auditioning during this pandemic. And if they are widely adopted while also proving their effectiveness during this global health crisis, there’s a good chance they will become a big part of public healthcare frameworks even after this pandemic subsides.
- Edtech/Digital education
As schools remain closed indefinitely, over 80 percent of the world’s student population has been impacted. According to UNESCO, over 1 billion learners across the globe have had their classes disrupted due to the pandemic.
However, as traditional classroom learning takes a backseat in the face of this crisis, there has been an acceleration in the adoption of e-learning, as governments and schools attempt to minimise interruptions to learning for their students.
Several education innovators have developed new, promising solutions to enable students to continue learning while at home. In Nigeria, some teachers are keeping classes going with tools like Google Classroom, Edmodo, and even Zoom. Also, Tanzania’s Ubongo recently launched its Ubongo Toolkits platform.
Additionally, Kenya’s Eneza Education has partnered with local telecoms giant, Safaricom, to offer a government-accredited curriculum designed and refined for feature phones. Some Kenyan Universities have also partnered with telcos to facilitate remote learning via online channels.
Meanwhile, several other edtech platforms like uLesson, Gradely, eLimu, SimbiBot, BBC Learning, Zeraki Learning, and many others are becoming increasingly relevant.
If these technologies take hold across countries searching for solutions to scale quality education, they may spur more widespread use of digital tools in the classroom and remote learning in the post-COVID-19 world.