Amazon is not standing still

by | May 14, 2020 | Work, Technology & People - blog

During the pandemic:

  • Amazon announced (3/16/20) that it is seeking to hire 100,000 people in its warehousing and delivery sectors. By comparison, UPS has a total of about 444,000 employees and FedEx has about 425,000 employees. Amazon, which is the source of many of the purchases that result in the shipping, is positioning itself to becomoe a dominant player in the logistics sector.
  • Amazon announced that Amazon Care will go live for its Seattle-based employees (2/19/20). Patients will have access to tech-enabled healthcare. This happened about five months after the program was announced and comes on the heels of a partnership with Berkshire Hathaway and JP Morgan Chase which has as its goal the use of technology to revolutionize healthcare. Amazon is positioning itself to be a major player in the employee healthcare sector. 
  • Prior to the pandemic (7/11/19), Amazon announced that it will spend $700 million to offer 100,000 workers access to training in information technologies in order for them to be prepared for the coming age of automation. This is offered as part of its Machine Learning University. With education in general driven online during the Covid-19 event, people are becoming accustomed to the concept. After the pandemic has passed, Amazon will be positioned to deliver a strong, less expensive, branded alternative to higher education. 

Amazon is a well-known serial innovator, and it is accelerating investment in some sectors during this disruption. This behavior is consistent with that of innovators in past crises. 

In their study, Economic Crisis and Innovation (2012), Daniele Archibugi and Andrea Filippetti analyzed the response of UK companies to the 2008 economic crisis. They found that ‘great innovators,’ which they defined as those delivering sales of new-to-market products and services, were disproportionate investors during the downturn. The study was analyzed 2485 UK firms, of which 324 (13%) were ‘great innovators.’ The share of innovation expenditures by the innovators, as a percentage of the total, increased from 21% in 2006 to 37% in 2008. The absolute investments of the innovators, on average, increased by 63%, while those of the other firms declined by 27%. The innovators doubled down on their advantage. 

What are the implications for companies today?

  1. Target opportunity areas where needs are shifting and you can deliver distinctively new offerings
  2. Continue to invest through the downturn (which may be prolonged)
  3. Act now, while customers are receptive to change, not after the Coronavirus dust settles.