As the coronavirus pandemic threatens to mutate, the world will require inspired leadership and innovative measures.
By Bharat R Joshi
The Chinese Year of the Rat 2020 has already witnessed instability—military action in Iran, bushfires in Australia, earthquakes in South America, and floods in Indonesia, before the Covid-19 pandemic purged the above from public discourse. Many countries have shut down, Wall Street’s 11-year bull-run has ended, and cloud hangs over Tokyo Olympics. Worryingly, some quarters are using the crisis as a lightning rod to fuel clamour for anti-globalisation, which ironically might lead to slowbalisation.
Three main lessons from it are:
Dependence on China: While the impact of supplies from tier-1 suppliers can quickly be assessed, the impact from tier-2 and tier-3 vendors remains cripplingly invisible. Your supplier might not depend on sourcing from China, but their suppliers might, and their supplier’s supplier almost certainly does. According to Dun and Bradstreet, almost 5 million firms have tier-2 or tier-3 suppliers, dependent on the Wuhan region—and 51,000 (including 938 of Fortune 1000) companies source directly from that region. The effects of current disruptions could have been mitigated with active risk management across global value chains.
Blockchain: Unlike Fukushima or Australian bushfires, Covid-19 will not remain geographically confined. Technology must be used to ensure business continuity—remote working is a prime example. But more can be done, including blockchain—a distributed, time-stamped ledger. Alipay has launched a blockchain platform with the Zhejiang Provincial Health Commission and the Economy and Information Technology Department, to combat the spate of counterfeit facial masks (30 million masks have been seized) and medical supplies in China. Blockchain enables users to verify proof-of-provenance and track supply chains of medical supplies, including masks, gloves and protective gear. There are reports from Indian auto majors, of workers refusing to touch consignments from China. Here, blockchain could provide the immutable evidence to assure workers that said consignments were handled with due care to eliminate probability of contagion. The above Chinese model could be adopted to demonstrate proof-of-provenance.
Regulation: EU members are suspending mortgage payments, so residents don’t feel compelled to keep establishments open. ‘Ghost flights’, or empty planes (operated by airlines, for fear of losing flying slots), have prompted aviation regulators to ease onerous rules. To facilitate trade, remote processing of consignments could be an answer. RMS (Risk Management System) enables Indian Customs to process cargo and documents remotely, while subsequent financial flows (duties, drawbacks) are executed electronically. Secure videoconferencing could be adopted to virtually ‘inspect’ cargo, where required. Regulation can provide the nudge to encourage adoption of technology and best practices to prevent loss of livelihoods and economic disruption.
As the coronavirus pandemic threatens to mutate—from a humanitarian into a socio-economic crisis—it will require inspired leadership and innovative measures from governments and private firms to emerge unscathed.
The author is CEO, JCurve Ventures