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The Making Of A ‘3C’ Economy
As the economy undergoes change in response to Covid-19, some concepts that cannot be ignored for the role they will play in future readiness, are changing irrevocably. The list includes not only the expanded implication of ‘contactless’ but also a redefined ‘collaborative’ & ‘care’ in the new world economy
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Every nerve-wracking prediction of coronavirus disease’s impact on the economy is becoming a reality. The Covid-19 recession, which is the first pandemic-triggered downturn of the current era, is predicted to make India battle hard. Goldman Sachs estimates that India’s real GDP (gross domestic product) will fall by 5 per cent in fiscal year 2021, making it the country’s worst recession ever.
What essentially is a healthcare crisis has led to a severe economic slump. The country’s brightest minds seek revival, but the nature of this downturn makes the shape of that economic reconstruction harder to predict. This downturn is a demand and supply-side shock, caused first by the lockdown and then a breakdown of critical value chain components, leading to disruption in product and service delivery.
“The economy still needs to grow at a much faster rate,” cautions Dr Pritam Singh, former director of IIM Lucknow and MDI Gurgaon, adding, “The lion learns to run fast or it will starve and the deer has to run fast to survive. In order to survive, the pace of life needs to quicken. India has to up its presence in competitiveness and innovation.”
As Singh says, a rearchitecting of some economic characteristics is indeed obvious. Not very different from China’s 2003 SARS experience that was a catalyst to the country’s e-commerce sector, Covid-19 has pushed three areas –– ‘contactless’, ‘collaborative’ and ‘care’, making these three prominent Cs to watch out for in revival strategies.
CEO & Joint Managing Director,
Contactless Beyond Payments
Not so long ago, contactless was still an important term. However, its clear implication was towards payments and hence financial inclusion. Today, it would be strange if consumers accessed online apps and were not bombarded with messages of contactless processes and services. From shopping such as Amazon and Flipkart to courier services or even food delivery and medical care, non-contact options are aplenty. The likes of Zomato went a step forward and introduced ‘contactless dining’ with contactless menu, contactless ordering and contactless payment.
As residential communities go in lockdown mode, tech giants are exploring ways to help consumers live their lives in a contactless fashion. Schools have gone contactless with virtual learning. Companies are looking at contactless recruitment through online resume submission and interviews. Businesses are engaging in activities from training staff to signing contracts via contactless routes. Non-contact shopping is seeing sellers offer virtual showrooms and livestreaming services.
“We had begun contactless with digital disruption and with the rise of omnichannel. Now, this has gone a notch up. India as a market poses several challenges in going omnichannel but in current times, there is a boost even in the process of reaching dealers. We are investing in the likes of virtual showrooms and walkthroughs in experiential shopping,” explains Dipali Goenka, CEO & Joint Managing Director, Welspun India.
She reminds that a much stronger play of data and analytics will come into force, materialising more options of going contactless. Consequently, not just education, retail, healthcare but also entrepreneurial setups, government activities, supply chains, workplace, facilities management are all changing.
B. Thiagarajan, Managing Director, Blue Star however reminds that it will be a co-exist model. “Shopping as an experience for example is not going to be taken away so easily. Although there will be a surge in online sales, but physical stores will co-exist. There may be changes such as appointed hours at the showroom and so on,” he says.
It is still early to gauge the long-term impact of the contactless economy but just the amount of investment and changing consumer habits indicate these trends are here to stay.
Managing Director & CEO,
Collaborative & Not Just Sharing
India, like any other economy, has seen its own benefits of a ‘collaborative economy’. A collaborative economy is defined as a marketplace where consumers rely on each other, instead of large companies, to meet their wants and needs. It consists of giving, swapping, borrowing, trading, renting and sharing products and services for a fee, between an individual who has something and an individual who needs something — generally with the help of a web-based middleman for a fee. A collaborative economy is also known as a sharing economy.
In Covid-19, this definition has changed and expanded. The ‘sharing’ element is changed but the collaborative economy has become a collaborative ecosystem. Not only the once excluded large companies but also governments have come into this mix. This is a direct fallout of the fact that Covid’s risk needs a coordinated national and international response.
“None of us is as smart as all of us together. We have been living in a highly connected, fast changing world. Over time, most leaders have developed ‘crisis’ muscles. We have tested some of these muscles during the likes of demonetisation and GST, which are not of the magnitude of the present black swan event but did serve as practice rounds. We need to remember collectively that we have these muscles and recognise this is an opportunity to do more,” remarks Debarati Sen, Vice President & General Manager, 3M Abrasive Systems Division.
Former Chief of Army Staff General J. J. Singh adds that the global situation will change. The World Trade Organisation, World Health Organisation, International Monetary Fund and United Nations would have to evolve. Currencies may fluctuate, and there will be a “new era, where the global order will be shaken, as will world equations”. He emphasises that the time “isn’t one for political signs” but for a call for togetherness and camaraderie.
This will lead to a matrix model more common to an ecosystem than an economy. Tech Mahindra CEO, CP Gurnani explained it was important to “marry an individual, a team and work” as despite change being constant, people could write the change. The collaborative economy that was once of and for the consumer, aided with some tech, is now becoming an ‘all-in’.
Vice President & General Manager,
3M Abrasive Systems Division
In similar vein, the care economy too must evolve. Simply put, care work is to be found in a variety of settings and across formal and informal economies. Some of this is provided by the health services sector. Public services for childcare, early childhood education, disability and long-term care, as well as elder care, are other areas comprising the care economy.
The ‘care economy’ is statistically invisible. And no effective macro policy coherence was there to ensure and support India’s care economy. Women were burdened with much of the care work, which is generally unregulated and poorly paid. Where economists argued this must change, Covid-19 is changing it. Care and connection are put at the centre of the coronavirus response beginning from self-care and wellbeing to welfare in the form government relief packages and aids from corporates.
Business leaders remind that during the Covid-19 pandemic, self-care, care for communities and environment have become imperatives. “Self-care is more important than anything. This is a great time to take care of yourself, physically or mentally. Be ready for when this crisis will end. People are going to lose jobs but there will be creation of employment as well -- that’s an economy’s nature,” explained Randstad India’s Managing Director & CEO Paul Dupuis.
Care for community has already become more prominent. And with the way China skies have turned blue or dolphins are spotted near Gateway of India in Mumbai or even the peacocks dancing on the roads in Hyderabad, the short-term benefits for the care for environment are already visible. Covid-19’s evident impact on ‘contactless’, ‘collaborative’ and ‘care’ signifies that businesses that will base strategies based on these three components will fare better on the road to recovery.