PODCAST Ep. 02 (in French) – The Quebec economy and digital transformation: a status report
The pandemic has forced most companies to shift their digital transformation into fast forward, but many still need to make the shift to survive. Three Fonds experts give us an update.
The pandemic's impact on technology adoption has been undeniable, as Quebecers' everyday lives were plunged into the digital world, from telecommuting and distance learning to telehealth, online shopping and virtual entertainment. Businesses and consumers had no choice but to take their personal and professional lives online… or risk getting left behind.
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"The digital transformation of the economy is about turning physical tasks, based on connections between people, companies and things, into virtual ones," explained Sylvain Lemarbre, Senior Marketing Advisor, Market Analysis and Development at the Fonds.
"This shift was already well underway among Millennials and younger generations, but Baby Boomers were taken a little by surprise. Last year, in particular, you had to do practically everything online, creating a whole new consumer base and new ways of doing things."
Seizing the opportunities of the digital shift
"The pandemic made us take a giant step forward by about five to 10 years," observed Véronique Gagnon, Manager, Investments - Entertainment and Consumer Goods. She says the entertainment and consumer goods sectors have been "remarkably resilient.”
"Quebec entrepreneurs don't necessarily have the means to disrupt their industry, but the pandemic has underlined just how important digitization is for survival. Those who had already begun the digital shift, such as pure online retailers and grocers, fared well. Others had to switch gears and transform their entire supply chain from top to bottom, from online ordering to delivery logistics."
The skyrocketing sales of outdoor retailer SAILAttention, this link will open a new tab. is a good example, she says. Other success stories include assembled furniture manufacturer BestarAttention, this link will open a new tab., which fortuitously upgraded its logistics before the pandemic and Spa ScandinaveAttention, this link will open a new tab., which digitized the customer journey with a touchless bath access and online booking system. All of these success stories are partners of the Fonds.
Since many new pandemic-inspired habits have more than just public health benefits, they're likely to stay. Many people have found that digitization makes their lives easier, both at work and at home, and business have found that it improves their bottom line. And the cherry on top is that activities that go virtual often have a smaller environmental footprint.
In other words, once the shift has begun, there's no turning back.
"All of this is shaking up the status quo. From now on, the virtual component will be a key part of a company's value proposition. I'm thinking of the entertainment and events industry, for example. A hybrid offer can eliminate geographic barriers and create a better, personalized and ultimately, more satisfying experience," Gagnon added.
The new digital economy is data driven
Digital means data: data from processes we want to optimize, data from the market we want to understand and data from customers we want to please.
"The tech giants have shown that data-driven business models result in higher productivity and greater financial margins. After all, data doesn't cost anything and it doesn’t have any boundaries," says Nicolas Tremblay, Manager, Investments - Technologies.
"But digitization requires upfront investments, new skills and the expertise to collect, store, analyze, and secure data."
Two of the Fonds' partner companies are digital success stories: LANDRAttention, this link will open a new tab., a virtual toolkit that takes musicians from creation to distribution, and WorkJamAttention, this link will open a new tab., a digital space for frontline workers, including customized training, task optimization and schedule management. These two examples show how quickly technology and some platforms and web services—previously unavailable to those without the means—have democratized. It seems that every wave of technological innovation creates a steady ripple of business opportunities.
"There's no reason to believe that the phenomenon will slow down in the next few years," Tremblay added. "Today's emerging technologies give us a glimpse of the possibilities: virtual reality videoconferencing, for example, is almost like a face-to-face meeting. And smart cities where data helps optimize collective infrastructures."
"In the future, we can imagine sensors at concerts that interpret the audience's reactions and adjust the content accordingly, virtual reality amusement park rides and augmented reality mirrors to try on clothes remotely," added Gagnon. "Bricks and mortar businesses will remain, but the channels are constantly increasingly and they will stimulate entrepreneurial creativity."
Building a strong foundation for the digital transition
But there's a right way to do it, advised Lemarbre.
"Many companies start their digital transition backwards: with a website and e-commerce software. In a word: surface. Instead, they need to start by asking themselves a lot of questions. Which customers do they want to attract? Where do they want to go in a world without physical borders? In what time zones? What back-end systems do they need? Will they be able to connect to existing systems? Will multiple languages be required for customer service? What partnership models are available for delivery? Should we outsource warehousing? The e-store is really just the tip of the digital iceberg!"
That's where you can count on partners like the Fonds. It has experience supporting companies with so much more than just financing. Lemarbre is a member of the Fonds' internal Asthuce group, which gives Quebec companies valuable expertise for their digital and environmental transition – accented, of course, with the institution's values.
Technologies that benefit people
"Although these are technological projects, our unique approach always considers the human factor in the equation. It's the driving force of any change," Tremblay added.
As an impact investor, the Fonds strives to make the most of the digital shift in the Quebec economy in order to generate societal as well as financial returns, he detailed.
"We want each of our investments to have a positive impact on the environment, society and other businesses. The more we encourage networking among entrepreneurs—in this case partners of the Fonds—and the more we offer them our network's expertise, the more they can contribute to the overall growth of the Quebec economy."
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In collaboration with journaldemontreal.com