Moe Kelley
People adopt new technologies because they're better, faster or cheaper than the solution that came before them.
Narrator
Will teleconferencing become a substitute for business travel? Welcome back to the Oliver Wyman velocity podcast where we are joined by Olivier Fainsilber and Moe Kelley. In this episode they will have a discussion around the recent findings from their surveys in transportation and digital communications. Thank you and we hope you enjoy the show.
Olivier Fainsilber
Hello and welcome to the velocity podcast brought to you by management consulting firm, Oliver Wyman. I am Olivier Fainsilber, a partner in the Paris office working in the transportation practice and today I am joined by Moe Kelley. Moe is based in Boston. He is a partner, who focuses on mobile communications, and he is part of the Oliver Wyman mobility form. It’s great to have you on the show, Moe. How are you doing?
Moe
Hi Olivier, very well. I'm looking forward to an interesting discussion, bringing together both our technology and transportation viewpoints.
Olivier
Yes, well today we will have a conversation around mobility, substitutes. How have videoconferencing and telecommunications replaced in some ways the demand for travel. Of course, COVID-19 is responsible for the accelerated adoption of several technologies. But will the demand bounce in a post-pandemic world is the real question. Moe, you’ve done some extensive work around technologies which have certainly boomed during the pandemic, I’d be interested in hearing about some of those findings.
Moe
Certainly Olivier, we've been looking at digital mobility substitutes. So, these are technologies and services that people would use instead of going places physically. So, things like video conferencing for work or e-commerce or other solutions. As a result of the pandemic, as people were under stay-at-home orders, many of these new technologies have really taken off, and then used to help people get a lot of things that they were trying to get done before done while living under these restrictions. We found more people around the world relying on these solutions to stay safe at home. With a traveling for work or business meetings, going to school or even to see a doctor, digital technologies of all reduce the need for Global Mobility. This of course has drastic implications for industries, such as transportation and energy and even telecommunications where I do a lot of my work. With the pandemic closing businesses and economies around the world, it's the first time we saw an extraordinary number of people who were able to do their jobs from home on laptops or using phones. If we take a look at the situation in the US pre-pandemic Pew research center estimated that only about 7% of civilian workers were allowed to work from home and most of those were highly paid white-collar professionals. Since the pandemic, what we have seen in our survey was 58% of our respondents said that they were working from home more or for the first time and among those 62% say they’ll likely continue to do so after the pandemic.
Olivier
Well, that’s a considerable jump.
Moe
It is. We’ve seen a huge uptake in the other digital substitutes, like work-from-home solutions, videoconferencing, telehealth, and e-learning. So, with these large number of technologies being deployed, will be interesting to see where there is an appetite to return to business travel after COVID-19 has subsided. Olivier, I understand that you have some findings you can share following a recent survey that you did on travelers.
Olivier
Yes indeed! In early May of 2020, Oliver Wyman conducted a survey of travelers across 9 countries. So, we had the US, Canada, UK, Spain, France, Germany, Italy, China and Australia and we wanted to capture how the COVID-19 pandemic was affecting attitudes and opinions on travel. And with this traveler sentiment survey, we can chart how the travelers' views change as the pandemic evolves. So, one of the key questions we asked respondents was “When the COVID-19 outbreak ends and restrictions are lifted, are you going to travel more, less or about the same?” Now, when it comes to business, the results were positive in May, 73% of those who travel for business by air or rail expected to do the same or more. Now, sadly, when we updated the survey, this dropped from 73% to 57%, so there is definitely a loss in confidence and signs that probably part of business travel is not going to come back, particularly when it comes to internal travel. We found that a lot of people were uncomfortable attending conventions and just, as you said, Moe, there's going to be more work from home. And we also found that almost the same number that two-thirds of the respondents that for whom working-from-home is possible are going to do so more after the pandemic. I’m wondering from your work Moe, with the Oliver Wyman form, can you offer any views as to why a work-from-home future is going to persist.
Moe
So, it's not surprising that mobility is down, more people staying at home, more people working from home. And one of the things we tried to understand in our survey was, how long is these new behaviors change is likely to last. And as we looked at this, we really tried to understand. First of all, what are people doing differently than how they used to do it.
Secondly, where do they say they’re going to do in the future? In other words, as new technologies come along people suddenly realize that they needed something that they never knew they needed before. We also try to get under the hood a little bit as to why they're going to do, they think they're going to do. People adopt new technologies tend to be because they're better, faster or cheaper than the solution that came before them. And so, as we looked at the set of digital substitutes for mobility, we asked what people were adopting, how that adoption is changing over time and why they think these things are likely to persist. And what we heard almost across the board is that they are saving people time, they are saving people money, they're easier to use than people expected. We also ask them about their perceptions of safety on these technologies. In those cases, tentative score lower, I guess than I would have expected. So, the reason why people are doing work with videoconferencing is because they want to stay safe from the pandemic. Then at the top of that list would be safety and we found is number for four or five on the list in almost all cases. We also saw a pretty massive uptake in these technologies. So, people going from, as I think we already said, 7% using work videoconferencing to 58% using work videoconferencing over the course of this time. And I think what we see based on this, it is likely to persist, and it is likely to have an impact on the commute rather than the necessarily the long-distance travel. If people who were not working from home at all before and now they are working from home five days a week, maybe they'll work from home two days a week in the future. That kind of thing.
Olivier
You mean that after the pandemic, they’ll still work from home two days a week.
Moe
Exactly! So now that they are all set up to do it, they see it works. They save, in my case, two hours a day in commute time that you can apply to other things like working out or being with your family, etc.
Olivier
That’s interesting. So, we looked at it from the travel angle and we found that of the people who could work from home, almost two-thirds we’re going to do so more in the future.
Moe
Absolutely! With work from home solutions in particular, videoconferencing people said that they were doing so to save time they did so because they were able to accomplish-. Oh, that’s my dog.
Olivier
Well, that’s cute because work from home, that, you know.
Moe
Yeah, exactly. It's very on point. 2020 reality, right. He is a psychotic little beagle. Where was I. Yeah so, for remote work solutions and videoconferencing in particular, people sited that they save time and were able to accomplish as much as they would in person. And so, we view this as one of the examples of a technology where people were adopting it overtime and covid-19 kind of ripped the band-aid off and forced people to go through the setup process, understand how to use it. And now that they're using it, they feel pretty comfortable with it.
Olivier
Yeah, it's interesting you say that. In the October survey, we found that people were quite comfortable with using teleconferencing for many applications in business. But we also found that when it came to developing new relationships as opposed to maintaining existing relationships, people weren’t quite as convinced that teleconferencing was as effective and that was particularly true in Europe. So, there is no doubt there’s going to be teleconferencing in the future. But we are also convinced that people are going to get back on the road to rekindle the relationships and in fact that is the top reason people site for resuming business travel. And the thing is, and this is more of a personal view, they don’t, if you don’t get back on the road, your competitors will. And so being in touch with your clients, with your suppliers, with your business partners is really important. So, some of the business travel will not come back, for sure. But there’s a core need out there to be close to people, to have the trust in relationships and there's no substitute than being face-to-face for that one.
Moe
So, absolutely, that resonates for my kind of more in total personal experience in that working from home replacing more of the commute than necessarily the important meeting, if that makes sense. And probably just look at what I would want to do. It's the commute that I'm glad I'm saving, is the going into the office on Monday when I don't really have any meetings. The travel that I'm really missing is the going to spend time with my clients in person and getting to deepen and broaden those relationships.
Olivier
Interesting, you say that. People might say that they can have part of the relationship building or maintaining over-the-air, let's stay with teleconference. Whether it’s a client, whether it’s suppliers, whether it’s business partners, there comes a time where you just have to get back in front of them and create that with a human touch, rebuild the trust and the pleasure of working together. Travel is going to come back if anything because we don’t want to leave a void.
Moe
I think that’s right. And actually, that is true across these technologies that we’ve looked at. In other words, I think were we are headed is probably a hybrid of using some form of these new digital technologies as part of the solution, but also supplementing with in-person were critical to do so. So some of the other technologies that we looked at were around as a mission for tele-health, e-learning, groceries and food delivery were some of the lower adopted uses for e-commerce before COVID and now are among the higher adopted uses for e-commerce. In most of these cases, I think what we've heard is that people are going to continue to use them at a much higher rate than they did before COVID. And they like them. They save them money. They save them time. They’re convenient. They’re easy to use. However, there’s an in-person element that will continue to be important and people are looking forward to getting back to for at least part of the solution.
Olivier
Well, this has been really interesting comparing notes, how you took it through the mobility form, survey, looking at people’s attitude towards technology and how we looked at it through the lense of the traveler sentiment survey. And I know that we both are going to be updating our respective surveys early 2021 so I suggest we conduct a follow on show to this one and I look forward to having those conversations based on the evolutions that we will pick up in the meantime. Thank you so much for joining me today and looking forward to the next conversation.
Moe
Thank you, Olivier. It was a great conversation and I look forward to reconvening in a future show in 2021 to see how this is all evolving. If any of our listeners would like to learn more around his Mobility substitutes, please write into the show at Oliver Wyman.
The velocity podcast is brought to you by management consulting firm, Oliver Wyman. If you would like to learn more about recent surveys mentioned in this episode, please head to our website at www.oliverwyman.com to find out more. Thank you and we hope you enjoyed the show.
