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As the 'Great Reset' looms... reimagine to be better off

issacjohn@khaleejtimes.com Filed on June 18, 2020
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and the Ruler of Dubai, with His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces

The UAE's enterprising businesses will need to find a resilience strategy to enter the 'comeback'

As global economies try to navigate the worst economic turbulence since the Great Depression of 1930s, the key challenge the corporate world has to tackle is how swiftly and efficiently such an extraordinary setback can be turned into a momentous comeback.

As the World Economic Forum founder Professor Klaus Schwab has unequivocally argued, "We can emerge from this crisis a better world, if we act quickly and jointly."
The pandemic crisis is affecting every facet of people's lives in every corner of the world. But at the same time, this agonising experience represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world to create a healthier, more equitable, and more prosperous future from the great reversal.

Winners in the new era
Agility, scalability and automation will be the watchwords for the looming new era of business, and those that have these capabilities now will be the winners.
For the UAE business world, the looming post-Covid resilience scenario is no different as some of them have learnt over the years after surviving small and great adversities that the toughest test of a rebound is in the fight-back.
For economies as globalised as the UAE, the stringent survival test is now: how to bring a business back in an environment where a vaccine has yet to be found and economies are still reeling.

New order, new priorities
Across the globe, governments and institutions have lined up $10 trillion in stimulus packages, while in the UAE, backed by proactive support as well as a string of stimulus measures and recovery initiatives worth billions of dirhams by the federal and local governments, the Central Bank, and other public entities, businesses are gearing up to greet a new order and new priorities after languishing for months in an unprecedented lockdown.
UAE Minister of Economy Sultan bin Saeed Al Mansoori, while stressing the need for striking a balance between health and economy by easing lockdown measures gradually, has urged the private sector to be prepared for the evolving digital economy phase that will drive the recovery from the Covid-inflicted setback

Systematic response plan
According to the minister, the UAE has developed a systematic response plan for economic sustainability and business continuity and asserted that the future of the economy would "rely on encouraging national industries, securing the provision of necessities, exploring the diversification of industrial imports, and aligning economic policies with global changes in the short and long term".

"The UAE economy, which has strong fundamentals that enhance its ability to overcome crises and achieve leadership, has a competitive resilient economy that is linked with other global markets and not immune to global repercussions," Al Mansoori has said.

The minister added the economic strategy framework consists of two main phases. The first one is the short-term phase, which includes the gradual opening of the economy and businesses while adhering to the precautionary measures, providing massive stimulus plans of total Dh282.5 billion to the sectors most affected by the crisis, supporting SMEs, and linking the funds to beneficiaries through effective schemes and plans. The second phase is the long-term stimulus package to accelerate recovery, advance growth, transform challenges into opportunities to achieve sustainable economic growth, and encourage investment in sectors with high potential, most notably digital economy.

Portals of a 'new normal'
The UAE's enterprising world of business has to find a resilience strategy for which it has to open its mind to fresh even exciting options as it enters the portals of a new normal, one in which the tried and tested is now obsolete. And yet, with ingenuity, determination and an inherent conviction that marks the UAE there will be light at the end of the tunnel. Companies will persevere and prosper, they will strive, to seek and not to yield to adversity.
Like the rest of the world, the UAE is gradually easing Covid-19 lockdowns, but anxiety about the social and economic prospects in store for us is only intensifying. There is good reason to worry: a sharp economic downturn has already begun, and we could be facing the inevitable: the worst depression since the 1930s.

The great reset mode
As the International Monetary Fund (IMF) has advised, to turn this adversity to advantage, private and public sectors must act jointly and swiftly to revamp all aspects businesses, lifestyles and governance - from education to social contracts and working conditions. "We need systemic transformation across all sectors as we are irreversibly into a new order that is a far cry from what existed a few months ago. Every sector, all types of businesses and protocols must transform. In short, we are in a 'Great Reset' mode," says Faizal Kottikollon, founder and chairman of KEF Holdings.

For years to come, the pandemic will have serious long-term consequences for every nation's economic growth, public debt, employment, and human wellbeing. Global government debt has already reached its highest level in peacetime.
The global economy will contract at least six per cent this year due to the pandemic crisis "without precedent in living memory" and which has triggered the most severe economic recession in nearly a century, the OECD said in its latest outlook report, warning that recovery will be "slow and uncertain".

Watchwords for the new era
The World Bank projected that global economic activity will shrink by 5.2 per cent this year, the deepest recession since a 13.8 per cent global contraction in 1945-46 at the end of World War II.
Kristalina Georgieva, managing director at the IMF, has signalled a possible downward revision of global economic forecasts, and warned that the recent economic data for many countries was coming in below the fund's already pessimistic forecast for a three per cent contraction in 2020.
This crisis will catalyse some huge changes. Few industries will avoid being either reformed, restructured or removed. Agility, scalability and automation will be the watchwords for this new era of business, and those that have these capabilities now will be the winners.

Reinvent, reimagine
Systemic shifts in business structure, customer expectations, and demand patterns create a need for equally systemic shifts in operations strategies to create competitive advantage and new customer value propositions. As management experts say, successful companies will reinvent the role of operations in their enterprises, creating new value through a far greater responsiveness to their end customers - including but not limited to accelerated product-development and customer-experience innovation, mass customisation, improved environmental sustainability, and more interconnected, nimble ecosystem management.

According to WEF, the 'Great Reset' agenda would have three main components. The first would steer the market toward fairer outcomes. To this end, governments should improve coordination (for example, in tax, regulatory, and fiscal policy), upgrade trade arrangements, and create the conditions for a "stakeholder economy".
The second component of a 'Great Reset' agenda would ensure that investments advance shared goals, such as equality and sustainability. Here, the large-scale spending programs that many governments are implementing represent a major opportunity for progress.

Harness innovations
The third and final priority of a 'Great Reset' agenda is to harness the innovations of the Fourth Industrial Revolution to support the public good, especially by addressing health and social challenges.
As Kevin Sneader and Bob Sternfels, both analysts at McKinsey & Company Home, wrote as businesses step into the post-coronavirus future, they need to find a balance between what worked before and what needs to happen to succeed in the next normal. From thinking about the next normal to making it work: What to stop, start, and accelerate.
As businesses around the world consider how they can return from the torment inflicted by the coronavirus, and ponder whether it would be a "V'' or "U" or "L" or "W" -shaped recovery, analysts argue that five qualities that will be critical for business leaders to find their way to the next normal: resolve, resilience, return, re-imagination, and reform.

The moment is not lost
McKinsey analysts suggest that in order to come back stronger, companies should reimagine their business model as they return to full speed.
There are four strategic areas to focus on: recovering revenue, rebuilding operations, rethinking the organisation, and accelerating the adoption of digital solutions.
The moment is not to be lost: those who step up their game will be better off and far more ready to confront the challenges - and opportunities - of the next normal than those who do not.

author

Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.


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