27 April 2020 #Clarkslegal
Concerns about the future should not be seen as merely warnings of worse to come than the already torrid period we are living through now. They are more about what the future looks like and how we may thrive in it.
It is as though the world is saying to us all: what do you want to be when you grow up?
The way society is already split between the comfortable and those with no apparent hope of financial security is likely to be compounded by the Pandemic after effects. That goes for countries as well as individuals, separating those who prosper from those left out.
The way that global institutions and multinationals deal with this now is crucially important, as well as how national policies are developed to increase prospects for those whose futures currently look bleak.
There is no better way to build a secure future than investing to support businesses to employ people in meaningful work. There has long been difficulty for early stage businesses to get finance, and investors are rightly wary of start ups that have a good chance of collapsing. However, does this have to continue or are there ways to accelerate business growth of young companies to generate good jobs?
There can be much greater effort to help early stage businesses. Currently across the world vast numbers are without work, especially young adults, and this will become a bigger problem because of increasing automation and now the Pandemic. The International Labour Organisation World Employment Trends 2020 report, prior to the Pandemic, identified that 188 million are unemployed globally. Including people with some but inadequate work the number is around 470 million. Further, it was reported that 267 million young people aged 15-24 worldwide are not in employment, education or training. These are huge numbers.
There can be few things more important than helping people sustain themselves with properly rewarded work. That needs a totally collaborative effort between institutions, governments and businesses to combine know how and resources to help bring about a sustainable future based on diversified economies.
In practical terms, and looking beyond Covid-19, the required collaboration will be greater access to funding from a mix of public and private sources, plus a suitable ecosystem to support young businesses with advice, mentoring, and collaboration where at all possible with helpful multinationals, who can do more to effectively sponsor start ups to help them gain external investment and learn good management.
Training the leaders of new smaller businesses is essential as good ideas are never on their own enough. Experienced coaching and mentoring is needed to reinforce leaders of smaller businesses to be capable of attracting support and investment. Investors must see good plans and impressive teams. Large corporates can use their experience to steer realistic and reliable business planning.
A progressive approach to developing technology clusters, geographic or virtual, can be applied in many countries to build the necessary supportive ecosystems nationally as well as facilitating global collaboration.
When compared to the vast expected spend worldwide on infrastructure over the coming decade or so, some $90 trillion, much of which may well be negative to climate and other environmental objectives, the cost of helping build new sustainable companies that will provide good work is modest. Which matters more?
Infrastructure projects also of course create jobs and may in many situations enable better local business growth, but those tend to be side benefits of such projects and not the main objective. This means sustainable business growth and job creation may not be enough of a focus.
The UK Government plans to launch in May a boost to startups through the Future Fund. It shows that the need for something like this is recognised, which is good, but the Future Fund does not look a good solution to the scale of need. Many businesses will not benefit, terms are not as friendly as they need to be, it seems incompatible with other investment incentives like S/EIS, and it looks most suited to venture funds who tend to be risk averse rather than helping innovation.
The objective needs to be a truly worked out way to tackle this huge and growing problem of immense unemployment and the poverty that goes with it. National and global resources are vital. Looking beyond Covid-19 is hard to do, but we all need to see, and offer the young, a much more hopeful vision of a better life.
So what will we be when we grow up?