BUSINESS BEYOND COVID
STEPHEN VAN COLLER: Lessons from a global crisis
Covid-19 has changed the world of work, but also presented us with many opportunities
In the Business Beyond Covid series CEOs and other business leaders and experts in their sectors look to the future in the wake of the Covid-19 pandemic. What impact has the novel coronavirus and resulting lockdown had on their industries and SA's economy as a whole, which parts will bounce back first, and which will never be the same again? Most importantly, they try to answer the question: where to from here?
A report in April from Mckinsey described Covid-19 as “ ... one of the biggest destroyers of jobs in human history”. The International Labour Organisation has forecast that the pandemic could reduce global working hours by almost 7% in the second quarter of 2020 — equivalent to 195-million full-time jobs. McKinsey’s analysis suggests that up to a third of the workforce is vulnerable to reduced income, furloughs or layoffs as a result of the crisis.
The World Bank is predicting a GDP decrease of 2.1%-5.1% in 2020 (2019: 2.4% increase) in Sub-Saharan Africa. The government is expecting a rise in unemployment to 50%. That’s one in two people without jobs. In the 2008/2009 global financial crisis SA shed 850,000 jobs and it took 11 years to replace them. These statistics are alarming and frankly unacceptable. It requires a call to action for all of SA to act rapidly to innovate and ideate a new normal that creates a more socially acceptable outcome.
It is inevitable that the world of work will be fundamentally changed by the virus and by the necessary measures taken in response. But it is also clear that the extent to which we’ll be able to ameliorate the devastation to economies, and job markets in particular, is dependent on our ability to adapt, and adapt quickly.
We need to fundamentally reconsider the way in which we train our people, young and old, in a digital world of work, facilitate access to technology from a young age, and create innovators and entrepreneurs who can take advantage of the best solutions the world has to offer. We must also encourage South Africans to embrace continuous learning to future-proof themselves against the next Covid-19-like event — whatever that may be. The virus has shown us that past success is not a good predictor of future successful business models. Warren Buffett’s recent entry and exit from the airline industry, at a huge loss, is an example.
Upskilling and reskilling need to become part of our value proposition, and not just for altruistic reasons. In this economy no business can afford unproductive people. The digital economy requires educated, savvy users, and we need to ensure that our employees are tech-literate and equipped to keep pace with their organisation’s inevitable digital transformation. We must be able to learn, unlearn and relearn in this rapidly changing world.
The digital economy requires educated, savvy users, and we need to ensure that our employees are tech-literate and equipped to keep pace with their organisation’s inevitable digital transformation.
But the impact goes far beyond that. There is a huge and profound opportunity to level the educational playing field. We still don’t prioritise equality of opportunity, and, worse, we have incorporated it into our world view. We take it for granted that a child who attends a private school in an urban centre will receive a better quality of education than one who attends a public school in a rural area. Why should that be the case?
The lockdown experience has shown exactly how much teaching information can be made available online. There are enough exceptional learning resources available online so that with the proper guidance you could never set foot in a classroom and still receive a world-class education — provided you have a base level of infrastructure to make it possible.
The biggest obstacle to accessing this wealth of teaching material and knowledge is the high cost of data. Free, or at least cheap, data for the poor is a priority as it will kick-start our informal economy and equip our children to be the tech leaders of tomorrow. In my previous role at Barclays Africa Group, a pilot project run by the retail bank that saw free Wi-Fi trialled in taxis in a bid to encourage the adoption of online banking revealed that about 80% of the content downloads that happened were used for homework.
In SA we have a policy of free basic services, including water and electricity. Each month every household receives its first 6m³ of water free. Consider the impact if we extended that to data. Why not distribute, through the mobile operators, a free gigabyte of data per household per month?
As a minimum, why not ask the operators to zero-rate educational sites approved by government as being in line with the curriculum? That would be a good start to establish equivalence between public and private schools and to the journey to equal opportunity. It doesn’t erase it overnight, but it points the way to a long-term reshaping of the economy. Spectrum is, after all, a national asset, not dissimilar to minerals in the ground.
Another opportunity to level the playing field would be to reduce the cost of money. A few years ago MasterCard and the Reserve Bank conducted a study that showed the cost of physical cash in SA was equivalent to 0.52% of our GDP annually, and that these costs were borne disproportionately by the poor.
Despite this, the study estimated that the bulk of our transactions still take place using cash. Perhaps Covid-19 is the shock we need to wean ourselves off cash, and hopefully the banks and their regulator are looking at ways to make that process ever easier for their poorest customers, and the unbanked. A whole other topic for another day!
Finally, we need to accept that it’s inevitable that people are going to continue to work remotely to a greater extent than before, and that this is going to fundamentally shift the way in which we view performance. We’re going to value and remunerate productivity over presence, and we’re likely to see jobs shift to freelance models that aren’t beholden to a single employer.
Leaders around the world have been presented with an opportunity for radical societal change. If leaders take the lessons learnt during this pandemic to heart, they might also have the popular mandate to embark on a programme of reform and bolster mechanisms that support equality of opportunity and access. Covid-19 won’t be the last global crisis to strike in our lifetime. But it might show us the way to create a society that is able to respond more robustly to the next one.
• Van Coller is group CEO of EOH.