The Myth of COVID Economic Crisis: Surviving future based on social entrepreneurship

Seems like the end of this world.

The world pepped up on self-indulgent high of technological steroids, a robust global economy secure from any perceived threat, apart from pretentious climate mongers, the world in which, the humanity lived, stood unaffected for far too long.

Then it all crashed. Like a make believe illusion of normal life and mythical blissfulness of existing in delicate bubble of “know all” digital age. Nothing of which really helped.

All it took was a humble, benign and previously unknown mild flu to bring ceaseless enactment of macroeconomic soap opera to an abrupt halt.

The world locked itself in.

The whole idea of human endeavor based on collective pursuit of common goals whether business, education, sports, travel and governance, everything became irrelevant. Like proverbial Pacman it just ate into our civilized defenses of nationality, class, creed, faith, economy and medical progress. Breaking out at far off Wuhan in China, it spread to other cities, and countries, forcing people into vast quarantine zones or locked down, as we heard on news, joked and stayed cocooned in vague watsapp misconceptions that somehow it would not affect us. But it did. Now after three months of lock down as we cautiously ventured out, we realized that the world we knew, now no more exist.

People are dying. People everywhere are falling sick. Hospitals are brimming with them. Authorities have lost the grip on situation. More and more, people get infected; you hear the medical teams taking away the people from next block. The radius is getting smaller.

There are no shiny shopping malls, nor crowded schools and colleges. Factories and plants are deserted as the workers tread back in masses, streaming endless miles on foot, hungry, tired and jobless. Like the ants leaving a cursed land, this mass exodus was ominous trailer of the larger tragedy lurking out from bleak horizons.  The usual bluster of “never at rest” city life has been replaced by harried confused people, mask covering their face, eyes filled with fear, rushing to nowhere in a big deserted city which is as clueless as them. 

Myth of technological prosperity, global economy and digital society

The cruel summers of 2020 pandemic and consequential lockdown erased the years of global progress and technological prosperity trickling from famous silicon valleys of India and feeding digital economies in smaller cities and towns. The self-proclaimed guardians of responsible corporate culture couldn’t hold the fragile ivory forts in face of impending economic doom and have turned their back on helpless workers caught unaware by mass layoffs across industry. Millions are losing their jobs. Thousands of small and medium enterprises have shut down.  Restaurants, hotels and travel business are totally wiped off.

But beyond the dystopic filters & knee jerk indignation, if we look closely and try to logically analyze this current recession, it clearly is not  so simple.   

It is not the first time that animals to human pathogens infection (Zoonosis) have caused contagious cycle of disease which has affected large section of humanity. Before this there was Swine flu H1N1, Mad Cow,Nipah and Ebola. We also know of 1918-20 Spanish flu pandemic with a very similar pattern of spread and impact.        

   

 What different has happened now?

At first there are these usual questions. Is it not result of unbridled commercialization of animal resources through large scale domestication? The mutually agreed destruction of forest cover by commercial interest all around the globe for real estate, timber, mining and agriculture putting increasing ecological strain on native communities but also making pathogen carrying wild animals to come in frequent human contact resulting higher probability of contagious transfer. It was as if all the big corporations and government policies were playing Russian roulette with ecology. Climate degradation, industrial toxicity or Pandemic, we were always, one disaster away.     

But all these industries have been consistent in denying their role in ecological destruction, while unabashed in reaping the commercial benefits ,have been first to declare their inability to contribute "any more" toward their communities and governments when the crisis hit home. Till recently they were proclaimed champions of Neo liberal economy. There is no logic why the robust economies and their corporate commanders, across the world declared SOS within 100 days of COVID 19 pandemic. Where is all the money gone? Or Was there a larger systematic failure in this technology driven global economic model which just got aggravated because of ensuing COVID crisis.

Given the huge financial funding made available to corporate sectors, till recently enjoyed one of the highest per capita industrial consumption in human history and with technological capacity at its peak, then why did the whole economic edifice,  just collapsed under its own weight.  

Yes now you can see. It was always there like an elephant in the room. But as we are used to believing in solemn continuity of existing arrangements,we failed to acknowledge and accept the hard truth. The big corporate players, with easy access of public banking system and financial back up were unable to transform into agile business units of new economy. There whole focus of business was restricted to profit extraction from society rather than value addition to products and services. They just blotted their entrepreneurial capacity with more of the same. It was sliding downhill from the word go. The glut started with aviation sector, then auto sector lost speed and then banking sector got the chills. 

The entire resource mobilization for new liberal economy was tied down to urban or regional centers and failed to reach the wider population at town and district level. The public spending on health care was never a priority. Indian healthcare is dominated by the private sector. Given the enormity of capital requirement and constrained public funding, a large population is devoid of medical cover. The Make in India and localization of entrepreneurial focus was critical to arrest the growing snowball of economic crisis. But it came too late and too little.  

COVID 19 was last straw that broke camel’s back.

The magnitude and complexity of reverse migration of unpaid workers from cities during COVID crisis and tsunami of immediate layoff and closing of units just within months of lock down can be easily explained on over-dependency of business sector on short term profit making and lack of sense of boarder responsibility toward social issues. Driving high profit margins in time of economic boom and cutting cost by disposing off headcount, while demanding bailout & tax cuts for themselves, reflects extreme lassitude that grips our business leaders.

We need to disrupt this cycle. Digitalization and skilling are the only way to initiate this process. Rather than preserving the redundant industrial base promoting mindless consumption of non-local products, tottering on financial bailout , consisting of lethargic and obsolete business empires, a more community oriented social capitalism is, what is needed. A country of few rich billionaires with billion poor people will always be prone to any disaster. Growth of GDP is bullshit. We are on our way to become most unequal society in world.

The whole idea of giving community readymade customized economic molds to “fit into” is the very basis this problem. A country especially like India needs to evolve grassroots level “social innovation” based income generating small and micro business ideas entrenched in community collaboration to prepare for long term prosperity & self-sufficiency.

We need to promote and encourage social innovation. 
A social innovation is the creation of services and product which fills the existing gap and provides affordable, efficient and scalable value alternative to community at large. Skill India is right step in that direction, provided we get these models operational at ground. There are number of available examples that points to presence of large pool of such vibrant social innovators and dynamic local entrepreneurs at different levels of community.

Arunachalam Muruganantham  inventor of a
 low-cost sanitary pad-making machine 

All we need is to provide them an institutional platform and supportive ecosystem. Micro finance and technical mentoring can act as catalyst to speed up the process of developing series of local income generating social units.

Such social innovation that collaborates with society in value creation, rather then fly by night kind of “startup” dreams, are more suitable to Indian  background and will go on long way in rejuvenating Indian economy post COVID crisis. Such social innovations can be beneficial in any sector from agribusiness, digital services, education and healthcare. While government has a responsibility toward the institutional and financial support, such social enterprise are not expected to solely depend on them but create sustainable income for all stakeholders ,even after reinvesting portion towards scaling the future capacity.

Husk Power Systems develops electricity with biomass waste

There is need for institutional support and it cannot be just discounted for any reason, but it has to be structured properly. What we need is inclusive and community centered growth strategies, not an ultra-corporatized economic model that leads to wealth accumulation at points that locks it from flowing into overall social well being.

Harish Hande Indian social entrepreneur, who co-founded SELCO

won Ramon Magsaysay Award for 2011 

It’s time to back the people, who vote governments in power expecting their long term welfare. The economic recovery package should deliver immediate solutions by also boasting social innovation based entrepreneurship at district and village level. The big corporate players should be made accountable for social responsibility at time of COVID while seeking public funds.

For example financial institutions should seek some degree of social commitments from corporate prior to doling out bail out packages. Business receiving financial packages should be asked to retain workers, and ensure that once the crisis is over they will invest in skill development and preventive health care of employees. 
Denmark is a sterling example of giving priority to social equity while distributing stimulus package to industries. By excluding firms that incorporate themselves in famous tax havens they ensured that domestic revenue contributors are given importance. Denmark’s government also agreed to cover the cost of employees’ salaries at private companies as long as those companies do not fire people. The social thought behind this big move is to help companies to preserve their relationship with their workers. It’s going to be harder to have a strong economic recovery if companies have to spend time hiring back, workers that have been fired – This also allows households to retain their incomes, preventing the virus from spreading, and making it easier for businesses to resume production once the crisis is over.

Such proactive strategies also prevents hostile corporate take overs and can push the business to do more in CSR when things return to normal and invest in sustainable technologies supporting local communities like  preventive health care, renewable energy installations  and waste recycling. 

It’s very tough to survive at present times. But things will improve and this too shall pass. But letting things remain as they are, will result in prolonged business and livelihood crisis to masses.  We need to stay positive and prepare for future opportunities post COVID 19 pandemic. 

The famous musings of Dickens will really sums up the present, when it’s over and we survive this to see a better tomorrow.

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only”…

Gitesh Sinha