By Dave Bujnowski

Traditions that once seemed sacred sometimes unwind.

Few of us have experienced behavioural changes as dramatic as the ones we’re living through. From social distancing and working from home to Zoom parties, the all-encompassing change that has come with Covid-19 raises many questions about what the future will look like.

In his book Cognitive Surplus: Creativity and Generosity in a Connected Age, Clay Shirky introduces a concept called ‘accumulated accidents’. The idea challenges traditions and whether they really do represent an ideal expression of society, or are simply a series of accidents that can be unwound in the right circumstances.

Usually these so-called accidents unwind slowly, but when a global pandemic hits and we’re suddenly forced to change behaviour, it can be more rapid. The likelihood of fringe behaviours going mainstream increases, and a seemingly temporary change induced by the virus could be an acceleration of a future state we were already moving towards.

Our disrupted lives bias us towards assuming the new normal will be different from the old ways, but we won’t all want to work from home. Schooling will not all be done virtually and we won’t continue to sing ‘Happy Birthday’ while washing our hands. But some changes may stick.

Zoom is already universally heralded as one ‘winner’ in the Covid-19 world. More people have been drawn into its service, which only feeds its network effects. It can be hired to do a job that multiple traditions previously did by addressing those old trade-offs.

First, business travel. Not all travel will end but we have woken up to how some of it can while reducing our carbon footprint to boot. Likewise business conference calls: Zoom won’t replace the ad hoc phone call to a friend anytime soon, but the 30-minute catch up I had planned with my colleague? Of course it can!

Finally, because millions have discovered it just ‘works’, a deterrent has been slain and more businesses will be motivated to equip themselves with it now they’ve tried it. Use cases have exploded, and ‘Zooming’ is inching closer to becoming a cultural phenomenon.

The healthcare system is laced with inertia but Covid-19 has caused practitioners and patients to shift from considering telemedicine a curiosity to being something they need.

Telemedicine does the job of visiting the doctor without wasting hours in waiting rooms. To the extent more people use it over the coming months, like Zoom it could permanently remove a deterrent.

In 2000, the bursting of the internet bubble gave way to a cost-saving mentality and opened the door for outsourcing to India. The Great Recession of 2008–2009 later helped fuel other massive cost efficiency-boosters such as cloud services and software-as-a-service in the ensuing decade.

More and more companies have emerged with a vague ‘digital transformation’ or ‘customer experience’ promise, but the proposition was not about taking out costs.

This will shift, and on the other side of Covid-19, an accelerated shift to the cloud seems likely - to save costs, enable remote access and improve business agility. Software companies with a straightforward value proposition or a powerful business agility promise will prove appealing investments.

Finally, why wouldn’t someone order groceries online six months ago? Or home furnishings? Probably not for cultural reasons, and not because they love going to the store. It was because of habit.

If the lockdown forces people to finally try these emerging online services and their experience is a good one, the odds of reverting to the prior situation are low.

The investment case for the companies we invest in is long term and tends to be tied to either deep structural changes or enduring cultural trends. Such things are not easily derailed by an economic slowdown, and a case can be made that the current shock is speeding up inevitable changes.

In other words, this unwinding presents a significant new opportunity.

Dave Bujnowski is manager of the Baillie Gifford American Fund