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The pandemic accelerated the world’s digital transformation—but Europe is still ‘lagging behind’

3rd Dec 2020 | 11:44pm

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The coronavirus pandemic is forcing companies across the globe to get serious about “digital transformation.”

The term has been a popular corporate buzz phrase for at least a decade. But it has meant different things to different people. Many companies have taken a piecemeal, tentative approach to adopting digital technologies that might even be called “transformation theater.”

That’s not an option in the pandemic, when employees can’t get to the workplace, and customers are afraid to shop at physical stores. For many companies, the choice is stark: go digital or go bust.

In a Fortune virtual conversation Tuesday, three experts explored the way the pandemic has accelerated digital transformation in a host of industries including health care, education, transportation, media, and manufacturing.

Paul Scanlan, chief technology officer at the carrier business group of Huawei Technologies, noted that telemedicine, remote education, and videoconferencing have became the global norm almost overnight.

Even so, speakers agreed, some regions have embraced digital transformation more readily than others. All three concurred that European companies have been significantly slower than counterparts in the U.S. and China to integrate automation, artificial intelligence, data analytics, cloud services, and high-speed sensors into all aspects of their business operations.

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The challenge for Europe is getting firms in the region to “embrace” A.I. technology, said François Candelon, senior partner and managing director at BCG and global director of the BCG Henderson Institute. Europe, he said, is “not as advanced as what we can see in Asia now.”

China, by contrast, has the advantage of having homegrown tech giants willing to invest heavily in A.I., and benefits from government policies that support such technology.

Huawei’s Scanlan argued that, even before the pandemic, “China learned that A.I., [the internet of things], and 5G are essential building blocks for transformation.”

“A.I. has to be part of digital transformation plans going forward,” Michael Frank, manager of public policy at the Economist Intelligence Unit, said at the event.

The U.S., for its part, has the advantage of being a leader in A.I. research, Candelon said.

But BCG’s Candelon, who returned this year to Paris after a seven-year stint in China, warned that Europe is “really lagging behind.”

Individual European countries are pursuing digital transformation policies, but Europe needs an “ecosystem” that will connect national hubs, Candelon argued. “We don’t need 50 Silicon Valleys … a couple of them would be great.”

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