Time to shift from a profit-driven agenda to a new social contract

The novel coronavirus pandemic and consequent lockdown have devastated much of what we knew of life “BC” — before Covid-19. We will be tallying the toll of opportunities forgone, businesses disrupted or destroyed, lives lost and livelihoods demolished for decades to come.

A significant part of that reckoning must include a critical reimagining of how humanity and leaders can use this travesty as a catalyst for better ways of doing business, while reshaping the post-Covid-19 world so it is able to take better care of its people and natural environment.

The global crisis brings evolving daily business and boardroom consequences that affect governance, health, the socioeconomy, environment, and social spheres. It has become abundantly clear that the outmoded prioritisation and incentivisation of short-term gains for shareholders will not suffice in the long run: the tendrils of our interconnected world can no longer be shut off at the door.

As lockdowns begin to ease, governments across the world are turning their attention to the recovery process — and the opportunity it has provided to rebuild in a manner that results in more flexible, adaptive and sustainable economies. Leaders worldwide are navigating ways in which to change some of the most fundamental tenets of capitalism towards achieving better outcomes for all members of society.

This transformative agenda is being supported and spearheaded by the World Economic Forum (WEF) under the banner “The Great Reset” — a joint and urgent commitment to rebuild the foundations of our economic and social system for a more fair, sustainable and resilient future. It is envisaged that this will be founded on a new social contract that values the human dignity of every global citizen.

Situated as we are at the tip of Africa, with our specific health and economic constraints, business and government leaders would be forgiven for feeling particularly isolated. But across the world, the WEF has found that “the inconsistencies, inadequacies and contradictions of multiple systems — from health and financial to energy and education — are more exposed than ever amid a global context of concern for lives, livelihoods and the planet: leaders find themselves at a historic crossroads, managing short-term pressures against medium and long-term uncertainties.”

The Covid-19 pandemic has shown that we are able to make fast and radical changes to our lifestyles, businesses, cultural and religious practices. We should be harnessing the same determination and flexibility in our reshaping of global — and local — markets towards fair, equal and sustainable outcomes. There are many ready innovations of the fourth industrial revolution that exist to address health and social challenges in particular, and which should be rapidly embraced.

While these considerations are important at a global level, SA’s case makes the demands even more imperative. In July, finance minister Tito Mboweni announced a supplementary budget that will require some of the largest expenditure cuts in SA’s history, with an aggressive fiscal adjustment. Our unemployment crisis looms impossibly larger each passing month. According to the June quarterly labour force survey, more than 30% of South Africans are without employment. The expanded youth unemployment figures are even more worrying, revealing that more than 71% of young South Africans between 15 and 34 are unemployed and economically inactive.

The need has never been greater for the government to implement a range of inclusive and progrowth reforms if we are to prevent a fiscal or sovereign debt crisis. While we grapple with the continuing costs and realities of vast inequalities, increasing levels of poverty and soaring unemployment, we have the chance to enact comprehensive structural changes to reduce inequality and lower levels of poverty, while protecting our natural environment and its resources.

Business can play its part. Now is the time to shift private sector priorities from a short-term and purely profit-driven agenda to a more holistic approach that balances profit and purpose. That purpose should be geared towards sustainable socioeconomic, environmental, and governance responsibilities that go beyond items in an integrated report.

These priorities come into swift relief when one considers our dire youth unemployment crisis. In the months ahead, the government and business must work together towards constructive and meaningful youth inclusivity, by creating as many sustainable opportunities for broad-based participation in our post-Covid economy as possible.

A critical starting point is to ensure that our youth have access to the correct tools and devices to bridge the digital and technological divide caused by increasing levels of poverty, supported by accessible training and education opportunities.

• Craker is CEO of IQbusiness.