The ‘new normal’ requires insightful business approach
THE ravaging effects of Covid-19 particularly in smaller economies like Namibia will require a rethink of how we do business particularly in our strategic orientation.
It is clear that shifts in global trade patterns, coupled with rapid technological changes are presenting challenges to sustaining growth in our small and fragile markets.
In essence, a transition to a more knowledge-based growth model is now ever more urgent in the current uncertain global and national context.
The economic shocks of the Covid-19 crisis have spelled major impacts for firms across the globe. In the short term, the crisis threatens to cause numerous bankruptcies and layoffs in the private sector, particularly among SMEs. Once mobility restrictions and mandatory lockdowns are removed, thus allowing businesses to reopen – many firms, including both larger corporations and SMEs, will have not escaped unscathed and may face the risk of insolvency.
Firms may stand a better chance during times of crises by harnessing technological and innovative capacity to adapt. Innovative capacity can help firms to pivot to new ways of generating revenue.
In the current crisis, some businesses are repurposing their production lines, and regulatory authorities need to strike a balance to support them as they make these shifts.
For example, in other countries such as South Africa, textile companies are switching production lines from producing garments to making hygienic masks and medical robes, cosmetic companies are making hand sanitizers, hotels are becoming quarantine centers, distilleries are creating disinfecting alcohol, and automotive companies are evaluating options to produce urgently needed medical devices, such as ventilators.
Building up capacity and capabilities to produce simple products is comparably easy and can be achieved quickly. However, a lack of technological capability in producing complex medical equipment has become a major hurdle for factories looking to shift their production lines. There is a role for strengthening research capacity and helping countries develop science and technology policies that would help increase capacity to reverse-engineer, adopt, and adapt technologies to local needs.
Such belief is ubiquitous among policymakers alike. In order to chart a fruitful path forward to begin this transformation, a clear definition of what an innovation-led knowledge economy is necessary.
First, incentives to develop entrepreneurship with the efficient use of existing and new knowledge can be encouraged by a supportive economic and institutional ecosystem. Second, raising an educated and skilled talent pool is important to cultivate professionals that can create, share, and use knowledge effectively. Third, as innovation brings forth new ways to improve processes across varieties of interlinked sectors and industries, effective communication, dissemination, and processing of information is vital to ensure adaptation. And finally, this growing stock of global knowledge can be leveraged by a system of firms, research centers, universities, and other organizations to adapt to local needs, and in turn, create new technologies.