16 April 2020 #Environment
It is unnecessary to detail the extent of the devastating economic effects of the Covid-19 pandemic. They are plain to see across most of the world. Huge numbers are traumatised not only by the appalling global illness and death but also by fear of a very uncertain future.
The current crisis is placing extraordinary pressures on political and business leaders to think ahead to recovery, and attention to the path ahead is vital. It is essential to see both the big picture how things will change, and all the smaller steps on the journey that will help a sustainable recovery.
It is inescapable that many businesses will not survive the pandemic lockdown. That will be true in both developed and developing nations. Some others will prosper and take advantage of new conditions and demands that suit them.
A fundamental theme will be what underlying business models are resilient enough. The pandemic has exposed existing weaknesses and where there was over reliance on long established models that were under threat in any event.
This is undoubtedly the technology age, indeed technology is currently proving the salvation of lockdown for many businesses and private individuals for whom trading and living online is the only option.
The winners currently are the businesses who service the new marketplace, connecting people with loved ones and selling goods and services online. It is for now their world to conquer, and life will never be the same again.
The working assumption has to be a new paradigm of business model, thinking of resilience as essential to survival after this pandemic and assuming other global threats like it may come in future. The old supply chain systems may never be the same. Major corporates relying on supply chains must revisit what they do to create added resilience to global risk.
It is plain that the ongoing shift towards technology innovation will now be advanced rapidly, robots and digitalisation of trade will be part of the solution and traditional work is going to diminish more quickly than was previously expected.
The well funded corporates who have more cash than debt, being over a quarter of the world’s top 2,000 firms, according to the Economist newspaper, will be planning investment for a new world not sustaining the old one.
The resilience of all economies largely depends, however, on the success of the Small to Medium sized Enterprise (SME) sector. It is only this sector that can produce long term resilience through diversifying national economies and providing economic growth and meaningful work. This is the most important time ever for far sighted entrepreneurship and every country needs to promote this including global collaboration to support growing businesses finding new markets.
The existing mechanisms for global collaboration are a good start point, networks and platforms already exist that can be better utilised, multinationals can play their part in finding and nurturing start up businesses which complement them, governments can facilitate the ecosystems for young businesses to thrive, educational institutions can supply knowledge and talent to give SMEs the brainpower and energy they need for success.
All of this needed to happen anyway as the world faced inevitable loss of traditional work to automation and new business models relentlessly eliminating existing supply chains. However, the pandemic will accelerate these developments and how technology becomes the primary driver of change.
The ideal scenario will also see new business models becoming more sustainable in environmental terms, placing emphasis on green entrepreneurship which will also help reduce carbon emissions and pollution. The planet has been enjoying a break from the harmful effects of human activity during this pandemic, and huge numbers of people around the world have rediscovered clean air to breathe. This will not be quickly forgotten and political leaders will need to remember the battle against climate change as well as recovery from the pandemic.
Thinking ahead is hard when we face our current crisis and just getting through it, but leaders everywhere need to be more strategic than ever in thought about the future and how the business world must adapt to massive change. A brave new world awaits.