What we are witnessing is unprecedented. As the coronavirus crisis unfolds, our government, businesses and the economy are under severe strain – a situation made tougher by a deepening fear about what the future holds.
This is a time for ‘capitalism for social good’. Across the world, there is a great amount of trust in established businesses and their leaders. People are looking to the private sector to join hands with the public sector to tackle the pandemic. Businesses, to their credit, have understood this and are responding with alacrity.
Capitalism for social good seeks to move the needle beyond traditional business goals. This is easier said than done at a time when business leaders are grappling with widening losses, dissipating cash flow and mounting bills. Despite that, companies across sectors have stepped up to help the government.
They’ve done this through donations, in-kind support, helping to shape policy, and by innovating new products and services for today’s needs.
The global perspective
Many businesses have reconfigured their unique capabilities on a war footing. For example, a leading global luxury major is using its perfume factories to manufacture hand sanitiser for use in French hospitals. A consumer healthcare multinational has donated a million surgical masks to Chinese health workers, while a global furniture firm is upgrading hospitals in affected areas.
In addition, businesses can join hands to keep up supply of key commodities and to ensure standards for face masks and sanitisers are met.
According to the World Economic Forum, alliances between governments, global organisations and companies is crucial. This includes people from diverse fields like academia, research and civil society, who will accelerate solutions. This is true especially in the pharmaceutical space because the private sector has many more researchers racing to develop a vaccine and predict the trajectory of the pandemic.
Let’s look inwards too. The most enlightened firms will move mountains for their employees and customers. Safety and financial security will be the top priorities. Businesses have not only enabled employees to work from home, they are setting up contingency funds to ensure wages are paid on time and also medical funds to extend a helping hand when needed. By keeping supply chains humming and extending payment times, they can help customers and vendors too. All this reduces the pressure on the exchequer and government facilities.
It follows that the work done now has an impact after the crisis too. Such companies will have a more loyal team, which is critical in a prolonged economic crisis.
India Inc pitches in
It’s heartening to see that Indian companies have been among the most proactive when it comes to helping the government. And the help has taken on various forms. An alcohol major has committed to producing 3 lakh litres of hand sanitiser to help cope with the demand.It is also donating 5 lakh litres of extra neutral alcohol to sanitiser manufacturers to help them produce 2 million units of 250 ml sanitisers. In addition, it will support the hospitality sector – a key client – with Rs 3 crore in health insurance cover for bartenders and give 1.5 lakh masks to five states.
While one mineral resources tycoon has pledged Rs 100 crore towards fighting the pandemic, a sum matched by a major bicycle manufacturer, one of India’s largest conglomerates has partnered with the Mumbai civic body to set up a 100-bed coronavirus hospice. While donating to the Maharashtra Chief Minister’s Relief Fund and setting up quarantine facilities for travellers, it is also providing free meals to the needy across the country in partnership with various non-profits.
It’s not stopping at that. Using its production facilities to fabricate 1 lakh masks a day, it is delivering other protective equipment to health workers too. Leveraging its telecommunication and data infrastructure, it will provide a communication hub for school lessons.
Lastly, it is providing key logistical help to the government by supplying free fuel to emergency service vehicles in the country.
Cognisant of the lack of ventilators across India, an agriculture equipment major has started manufacturing the life-saving device and will offer resorts from an allied business to the government as temporary care facilities.
It is also creating a fund to aid the hardest hit in its value chain – small businesses and the self-employed. In fact, nowhere is confidence in the future lower than among small businesses. This is why it’s crucial to support them. What’s heartening is that, despite their problems, even smaller firms are chipping in by distributing masks, making sanitisers or providing free meals. Their numbers are expected to swell in the days to come.
FMCG giants, meanwhile, have slashed prices of soap and other hygiene products even as they ramp up their production.
Collectively, this is massive support for the Indian government and will go a long way in helping it manage the outbreak and its economic impact.
Governments around the world were hoping for exactly this response from the private sector. While a global economic dip may be inevitable, the work done by corporations will help contain it.
The best business leaders step up when it counts. They see the long-term value of partnering with governments to help the societies in which operate. It’s what is expected of them. This is an extraordinary time and it requires business heads to lead. The most enlightened will support governments to safeguard communities, knowing that it leaves everyone better off.
Authored by Dilipkumar Khandelwal, Managing Director, Deutsche Bank