Digital Resilience

Richard T. Watson (University of Georgia)  and Leona Chandra Kruse (University of Liechtenstein)

Covid-19 has made us realize that there is another dimension to digital capital creation by governments. The first dimension is for them to create capital that facilitates the creation of digital capital by organizations within their realm. For example, to promote a digital economy, they might pass laws, organizational capital, that facilitate the establishment of FinTech and startups. The pandemic has put the spotlight on resilience, and we now realize that a second dimension of government capital creation is for them to create capital that facilities economic recovery after a major disruption.

Following Keynesian principles, most countries use economic capital to boost a flailing economy. They lower interest rates and taxes and central banks actively bolster liquidity. Such actions create a disruption debt that a government must ultimately reduce.

In a digital economy, governments have another option. They can act to create digital capital that enables organizations to more rapidly adjust to the realities of a disruption and the associate post-disruption economy. Resilient organization are more likely to increase their market share during and post a disruption. Thus, resilient governments that can quickly refashion the foundations of their economy will assist these organizations to thrive on disruption.

Laws can be changed to increase the reach of human capital that has previously been geographically constrained by laws or tradition. Governments can change laws governing medical practice to promote options such as telehealth (for preventive measures) and telemedicine (for curative measures). The German Association of Psychologists has a dedicated Corona hotline that is open and free of charge. The Association invites all members to volunteer two hours to counsel patients on this hotline.[1] Some Swiss health insurance providers[2] have the so-called pharmacy model in their portfolio. Those with this coverage can consult nearby pharmacy partners to discuss their symptoms, instead of going straight to specialists. The pharmacists can then recommend them to a physician if necessary. This model may be beneficial in the long run, should the isolation period continue. Governments can also help restaurateurs cope with the rules of physical distancing by changing the definition of a restaurant’s operating space to include an area outside the premise. Necessary tradition-breaking measures can force changes that should have happened but was forestalled by vested interests and inertia.

Calamities can galvanize the creation of social capital as people become more aware of their neighbors and strive to help each other handle changed circumstance. Governments can encourage initiatives that use the digital infrastructure to create social capital by enabling people-to-people connectivity through new digital channels. In the mesh of a digital network, everyone is your neighbor and help networks can match empathy and aid more precisely. People with similar problems often find solace in interacting with those in a similar situation. The family suddenly home-schooling a six-year old might want to connect with other parents of a six-year old. Many Swiss citizens have demonstrated creative use of mobile applications to offer and ask for voluntary support in their neighborhood.[3] Those belonging to a risk group that must isolate, can ask their kind neighbors to do grocery shopping and other small errands.

Quick and successful action to handle Covid-19 by Jacinda Ardern, the New Zealand prime minister, to handle Covid-19 has attracted world attention and generated symbolic capital for New Zealand. The payoff is likely to be more tourism and overseas students in the long-term. Her resilient leadership sets an example for all New Zealand organizations and should accelerate recovery and establish resilient practices. Though, we acknowledge that in earthquake-prone New Zealand, organizations have had some significant prior lessons on resilience.

Disasters expose weaknesses in organizational capital, and these days much of it can be digital form, such as software. Some state governments in the US have struggled to enact financial support for affected residents because key systems are written in COBOL, and most COBOL programmers are retired. Governments need to audit their ability for agile digital actions, such as whether they have the resources to revise critical software. On the other hand, companies that can quickly generate software solutions are experiencing a boom. A vendor of an app to quickly develop small scale systems reports that its developers (human capital) have volunteered (social capital) to build apps for healthcare, education, disaster response, and non-profit organizations. For example, one app aids hospitals to keep track of the status of beds equipped with respiratory devices for treating Covid-19  patients.[4]

Natural capital can have a restorative effect on human capital, especially for those adversely reacting to isolation. Thus, it is important for parks and gardens to remain open, and a resilient government will find ways to ensure this happens. Some have gone further and turned streets into public space, so citizens have areas for exercising while social distancing. For example, Oakland, California, wants to roll out 74 miles (119 kms) of ‘slow streets’ in residential areas based on a neighbor-and-volunteer approach.[5] In effect it is creating social capital to provide additional outdoor space. Of course, a closed street is a poor substitute for a tree-filled park, but resiliency is often about providing quick and frugal solutions to partially meet essential needs. The same can be said about the pop-up bike lanes[6] that have been implemented in many cities, such as Berlin, Brussels, and Bogota. Minimizing physical contact requires space and there is not enough in public transport and the usual bike lanes. Redrawing road markings to provide more space for cyclists solves the problem.

The malleability of a digital infrastructure and computer software enables a level of resiliency we might not have imagined even a decade ago. The digital possibilities need to be partnered by mindsets that are predisposed to overcome digital transformation inertia to quickly create and exploit digital capital to infect society with resilience.