The World Economic Forum Suggests Businesses Pivot Amid Covid-19
Updated: Oct 12, 2020
“The World Economic Forum is the International Organization for Public-Private Cooperation involved with the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas.” This organization has recommended that businesses implement a reskilling process for all their employees as the consumer trend is rapidly shifting to online platforms. This implies that the traditional way of procuring daily essentials is no longer effective for consumers. Businesses that are not investing their resources into digital platforms are advancing towards their own demise, taking into consideration that the global health crisis is here to stay.
Several organisations have been compelled to shut down due to the global pandemic, however, it has also proven to provide a competitive advantage for some. There is a term in commerce called ‘pivot’, which describes how businesses are to initiate a plan B amidst crises like the Coronavirus. This establishes a business’s agility to be flexible enough to remain solvent during an economic recession.
However, some entities cannot keep afloat, thus they are forced to liquidate all assets in order to pay off debts. Approximately 200 000 to 300 000 small businesses are expected to be abolished due to insolvency, proving that a large amount of business owners are running companies with inadequate fortitude to permeate through this catastrophic crisis. The South African economy was already in a dire state prior to the Coronavirus, meaning that many small businesses were struggling to keep afloat. The pandemic has further escalated the matter, as current industries are unable to pivot due to lack of stability. This will subsequently hinder economic growth in the country.
In order to provide financial compensation for small businesses, the International Monetary Fund has agreed to lend South Africa R4,3 billion in emergency funding to offset the impact of Covid-19. Prior to the pandemic, South Africa was already grappling with unemployment, income inequality, as well as weak economic growth. Therefore, the country will likely sustain its economy with the monetary assistance provided.
Digital marketers and e-commerce retailers are some examples of business markets that have plummeted in terms of sales due to the abrupt crash of the economy and it will be difficult for them to regain a strong solvency status. Most European industries have started to resuscitate, and this has allowed the odd few consumers to walk through their doors. Nevertheless, the majority of the world economy is unemployed and heading towards the destitute status.
The World Economic Forum is therefore encouraging companies to restructure their organisation in terms of operating expenses and to pivot according to consumer needs as well as adjust to the so-called state of ‘normal’. This will allow businesses that were in a dire state of inadequate cashflow to re-sustain their cashflow. The World Economic Forum is definitely the platform companies should be looking at, in order to remain profitable and overcome the devastating consequences of the crisis. People’s working lives are going to be different after the pandemic, but it remains to be seen whether this will have appositive or negative impact on working dynamics as a whole.