How necessity has made our communities more resilient and sustainable

By Dr Farzana Chowdhury, April 2021

Dr Farzana Chowdhury considers how the Covid-19 pandemic has accelerated sustainable development through inclusion and equality.

To comply with the United Nations Sustainable Development Goals (SDGs), developed and emerging economies worldwide have been adopting measures to create a more inclusive society and leave a healthy planet for future generations. At the same time, the emerging and developing countries have also been focused on reducing poverty.

The start of the Covid-19 pandemic in early 2020 shed new light on these issues as it impacted all aspects of life across countries. Government authorities instructed people to restrict movement to contain the spread of the virus. Many businesses ceased operations, nearly coming to a virtual standstill, while others transitioned to different modes of operations. The crisis has also highlighted future needs.

The pandemic – a double-edged sword?

The pandemic disrupted business activities in both developed and developing economies. Even though businesses are located in different geographical locations, challenges faced by them have similarities as well as differences. According to a survey by the World Economic Forum (WEF), firms in both developed and developing countries have seen an increase in collaborative activity within a company.

This increase in collaboration was not only apparent in the private sector but also in the public sector, as suggested by Dr Sania Nishtar, a special assistant to the Prime Minister of Pakistan on Poverty Alleviation and Social Protection: “I think never before, outside of a wartime situation, have I seen such synergy and concordance coming together to respond – this response has been quite unprecedented.”

Dr Nishtar’s antipoverty agency, the Ehsaas programme, worked with other government agencies and businesses to distribute government stimulus payments. Similar public–private collaborations and innovations have been spurred in other countries as well during the pandemic. Despite the hardships they have experienced, small businesses have also experienced some positive effects of the pandemic. For instance, the WEF survey found that both developed and developing economies saw an increase in venture capital availability.

Firms located in developed and developing countries faced unique challenges as well: the firms in the developed economies faced challenges associated with reduced collaboration between companies and less access to skilled workers.

This pandemic has also forced governments to change their behaviours. The WEF survey found governments in both developed and developing countries increased their responses to changes. However, the WEF survey found firms in developing countries are concerned with governance-related challenges such as lack of trust in government, lack of judicial independence, crime and violence.

Many developed and emerging countries crafted massive stimulus packages to lessen the pandemic’s negative effect. People across various countries have used these safety nets or proceeds from the stimulus packages to meet their basic needs. However, people in many of the emerging countries faced an additional challenge: corruption. Some bureaucrats viewed this pandemic and the stimulus packages as an opportunity to take advantage of their office or power for private gain.

Challenges for female workers and entrepreneurs

Female workers have traditionally struggled to gain access to economic opportunities, and the problem has been more severe in developing countries. According to the Global Entrepreneurship Monitor, only about 10% of women are engaged in entrepreneurship. Additionally, female entrepreneurs tend to engage in entrepreneurship by themselves without any partners, co-founders, or employees. A large portion of female entrepreneurs tend to be involved in entrepreneurship in the informal sector.

Even though the formalisation of the informal economy has been an important policy agenda for inclusive growth, the informal economy remains a major share of the economy in a developing country. This informal engagement puts workers and entrepreneurs in a difficult position, since they lack legitimacy and are less likely to receive government support. Additionally, even if they decide to register businesses formally during this time, it does not translate to receiving government support in the near future; instead, this may even bring government-related problems such as exploitation by a government authority in the future.

Similarly, women workers and entrepreneurs are more likely to work and start businesses in the service or social sectors such as domestic work, retail, tourism and hospitality. Both developed and developing countries have enacted policies over the years to increase economic opportunities to reduce gender inequality. The pandemic has put pressure on female workers and entrepreneurs since services sectors where face-to-face interactions are required have seen significant adverse effects.

Building a resilient society

Prior to the pandemic, sustainable development through inclusion and equality was a major concern. The global pandemic illuminated and accelerated the need for urgency. Generally, crises force people to develop new perspectives since traditional assumptions and routines are disrupted.

This crisis has made societies more innovative and collaborative out of necessity, which might not have been possible in normal times. While the innovation and entrepreneurship-related policies enacted during the crisis may not work well during standard times, the crisis certainly points out the benefit of creating an ecosystem where collaboration between public and private partnerships can flourish.

Small businesses contribute to the local economy by creating jobs. The Covid-19 pandemic has put significant pressure on companies and the economy, and organisations that assist small businesses during the critical stages of their life cycle, such as accelerator and incubator programmes. These programmes provide services such as office space, networking opportunities and funding to small businesses. Supporting and creating an environment where these organisations can thrive and support businesses is essential.

The crisis has also shed light on economic and social injustices while illuminating opportunities to restructure healthcare and social protection systems currently in place. Reforming the shortcomings of the existing policies will help tackle gender inequality and reduce constraints on women’s economic empowerment. For emerging countries, creating a transparent system where the government is trusted is vital for creating an inclusive society.

While the current crisis and the models adopted by innovators and entrepreneurs may not be sustainable during usual times, this crisis certainly shows us the importance of creating a resilient society.

More information on Dr Chowdhury's research interests.