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''By working together, we can do all this. In fact, we must. And now is the time. COVID-19 has generated a shared global experience of a defining moment in human history. What is ensuing now is a period of reflection; one where people are not thinking about returning to the world they had, but creating and advancing to the world they want. Given the right leadership, and a new sense of purpose engendered by the pandemic, I believe that we can make the leap.''
For companies, this means embracing the concept of stakeholder capitalism by leading and managing profitable, sustainable businesses that deliver a positive impact for all of their stakeholders, including employees, customers, suppliers, local communities and broader society.
Five key actions
Turning that aspiration into reality in the midst of the deepest economic crisis many people have ever seen is a tremendous challenge. Unemployment, falling wages, strained supply chains and declining demand will present huge challenges. Government and corporate debt levels are likely to be high and will often have been incurred to fund day-to-day spending rather than investment. Without a robust recovery, trust in government, business and the institutions of society – which is already fragile – could fracture. Meanwhile, tensions between nations could well increase as the geopolitics of the pandemic play out.
In this context, we need to solve the ‘and’ problem. It cannot be a choice between long-term sustainability and short-term improvements in the economy. We need both.
To solve this problem, we need a framework that allows us to address multiple issues in parallel. Five actions will be key:
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Repair. To fix the problems of tomorrow, we need to be around tomorrow. So the immediate priority is to mend the things that have been most damaged by the health crisis and the need to lockdown economies. Governments and businesses have been very radical in their approach to this. It will be important to continue with this willingness to think differently about how our economic systems work.
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Rethink. The temptation in a time of disruption is to try and return to the way things were. That would be the wrong approach – both for businesses and governments. For businesses, it would be wrong to think the supply chains or the working practices or investment decisions of the past are the right ones for the future. For governments, COVID-19 has shone a light on the structural challenges our societies face and has created a unique point in time where fundamental change can occur. We need profound thinking about how our system can answer challenges ranging from climate change to automation. The same goes for multilateral organizations. By reinforcing the institutions that facilitate international cooperation, we will be better placed to deal with the next global threat.
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Reconfigure. The biggest challenge is making change happen. Organizations of all kinds will need new structures and ways of working that reflect technological and societal change, economic pressure, and the need to be fundamentally accountable to stakeholders, not just shareholders. At a societal level, we will need to implement important changes in the way we make decisions, such as moving on from GDP to a more rounded metric of societal progress and delivering reform to systems ranging from education to healthcare to taxation.