Will crises accelerate the adoption and widespread use of new technologies?

Carolyn Joyce-Baker
Carolyn Joyce-Baker
Financial analyst with 10 years experience in market volatility.

This is a very interesting question, and the answer is not a simple "yes" or "no." We can think of it as a double-edged sword, but generally speaking, crises do largely accelerate the application and widespread adoption of new technologies.

We can understand this from several perspectives:

1. Crises Break "Comfort Zones" and Old Habits

Normally, many companies or individuals tend to avoid unnecessary trouble. Even if better technologies exist, as long as old methods still work, they are reluctant to change. Change implies costs, risks, and a learning process.

But when a crisis hits, the situation changes.

  • "Survival" becomes the top priority: Old methods might suddenly become too expensive, too slow, or even completely unworkable. At this point, people have no choice but to bite the bullet and embrace new technologies.
  • A classic example: remote work. Before the COVID-19 pandemic, many companies were skeptical about remote work, worrying about low efficiency and management difficulties. However, the lockdowns caused by the pandemic turned remote work from an "option" into a "necessity." Consequently, collaboration tools like Zoom, DingTalk, and WeChat Work achieved widespread adoption in just a few months, a level of penetration that might have taken years under normal circumstances.

2. Crises Generate New Demands, Creating "Application Scenarios" for New Technologies

Crises often bring about entirely new problems, and these problems serve as the best "proving ground" for new technologies.

  • Necessity is the mother of invention: During the pandemic, the demand for contactless delivery surged, leading to the small-scale implementation of drone and autonomous vehicle delivery, which were previously just "cool concepts." The need for rapid, large-scale testing also spurred the research and application of new medical testing technologies.
  • The "sharing economy" after the financial crisis: After the 2008 financial crisis, many people experienced a drop in income and sought to "cut expenses" or "earn extra money." Concurrently, smartphone and GPS technologies had matured. Thus, "sharing economy" models like Uber and Airbnb emerged, perfectly matching people's needs at the time for "cheaper travel/accommodation" and "monetizing idle assets."

3. Crises Accelerate "Survival of the Fittest"

Crises act like a filter, mercilessly eliminating inefficient businesses unable to adapt to change. Conversely, companies that embrace new technologies earlier and have more advanced models are more likely to survive, and even grow against the trend.

  • Cost and efficiency tests: During economic downturns, businesses become extremely sensitive to costs. Companies that can "reduce costs and increase efficiency" through technologies like automation, cloud computing, and big data analytics will significantly boost their competitiveness. For instance, using cloud computing reduces the upfront investment in expensive servers, shifting to a pay-as-you-go model, which is highly attractive to businesses with tight cash flow.
  • Industry reshuffle: When old industry giants struggle during a crisis, it creates opportunities for agile, technology-driven startups to "leapfrog."

However, there's also a "slowing down" aspect

It's important to note that crises can also hinder technological development in the short term:

  • Budget cuts: When businesses face survival pressure, R&D budgets and non-core IT projects are often the first to be cut. Companies become more conservative and are unwilling to take risks on uncertain new technologies.
  • Shift in focus: Everyone is busy dealing with immediate problems, and technological innovations that require long-term investment and planning might be temporarily put on hold.

Summary

Overall, we can view it this way:

A crisis acts like a powerful catalyst. While it might slow down some innovation investments in the short term due to "tight budgets," from a longer-term perspective, it profoundly compels society to accept and adopt new technologies that solve practical problems and improve efficiency by breaking old rules, creating new demands, and intensifying market competition.

Often, a technology might be "ready," but it just lacks a "trigger" that forces everyone to use it. Crises often play this role of the "final push."