Recovery, Renewal, Resilience

Underrepresented groups such as women- and minority- owned MSMEs have shown a higher degree of vulnerability during the pandemic. Women- and minority- owned businesses tend to be micro in size (10 employees or less), more financially fragile, and face barriers when accessing professional and financial support services, according to the OECD and McKinsey. Past experiences of barriers to support mean that these groups are less likely to seek support or are unaware of the support that may be available to them. During a recent webinar, it was reported that these types of businesses could add £70 billion to the UK economy, if fully supported. We explore ways in which national and local government can better engage with MSMEs to develop policies and support mechanisms that will adequately address their recovery and renewal needs. The OECD and the UK’s Business in the Community recommend:

• Understand the barriers faced by these business owners by directly engaging with them, for example:
  • Establish and facilitate discussions (e.g. consultation) with MSME owners, organisations that represent them, and others such as banks, insurance companies, and professional services providers
• Design inclusive schemes that acknowledge and remove barriers, increase accessibility, and provide adequate support to women- and minority-owned businesses. Examples include:
  • Canada’s Women Entrepreneurship Strategy Fund (CAD 15 million) and the Black Entrepreneurship Program (CAD 221 million)
  • Ireland’s Women in Business 2020 Action Plan
  • Malaysia’s Short-term National Economic Recovery Plan (Penjana) which includes a USD 12.5 million micro financing program and an initiative aimed to raise funds to help finance microenterprises. Both initiatives are targeted at women entrepreneurs
• Deploy targeted advertising and collaborate with business associations, to raise awareness of new and existing aid schemes
• Reduce the bureaucracy of existing aid measures, by decreasing ex ante eligibility checks and deploying easily accessible digital portals. For example:
  • Switzerland's “bridging credit” scheme which can be applied for through a simple one-page form, increasing to accessibility of financial aid and the speed at which companies can receive assistance
• Create contract/tender opportunities that are targeted at women- and minority- owned MSMEs (see examples from Florida and Indiana)

A recent event organised by Geneva Cities Hub (GHC) and UN-Habitat examined the measures that cities across the world took to tackle economic and financial impacts of the COVID-19 pandemic. The session discussed lessons learned and how these might inform and accelerate the development of strategies which effectively prepare for and mitigate the effects of future crisis in cities. One core response lesson identified was that “cities which have best managed the crisis are those who have been flexible in the allocation of resources and capacities to support their citizens”. A further key takeaway was the potential for tools developed by international organisations to support and drive city recovery and renewal. The tools discussed include:

1. The Urban Economic Resilience Performance Diagnostic and Planning Tool which can support cities to:

• Identify the “strengths and weaknesses of institutional and operating” mechanisms with a focus on economic recovery, renewal, and resilience building
• Analyse the “structure and functioning” of cities and effectively measure economic performance. This tool can specifically help cities to understand how these factors impact vulnerability to shocks and stressors, and broader local resilience
• Inform the design and implementation of comprehensive Recovery Strategies and Renewal Initiatives that restore and enhance preparedness, and tackle systemic socio-economic conditions to reduce vulnerabilities

1. The Municipal Financial Self-Assessment Tool which aims to support cities to:

• Analyse city financial health and identify strategies that will improve the “mobilization of local resources, financial management, public spending, assets management (public), investment programming and access to external funding”
• Evaluate local budgets, finance management practices, city savings capacity, investment history and future opportunities, and review financial forecasts
• Benchmark according to a set of comparable key indicators and ratios
• Define strategies for a ‘Municipal Finance Improvement Plan’ aiming for “greater accountability, visibility and efficiency in the use of public funds”
• The local government of Kisela Voda, Macedonia, detailed how this tool supported them to mobilize local resources such as increasing land development fees and selling municipal assets

1. The City Resilience Profiling Tool, designed to:

• Assess and understand unique urban systems by engaging local governments, the private sector and civil society stakeholders to build city resilience
• Support the establishment of strategies that consider five core and interdependent components: “spatial attributes; organisational attributes; physical attributes; functional attributes; and time”

Cities’ have been in the forefront of the fight against the pandemic, by providing emergency services, containing the spread of disease, mitigating the resulting social and economic impact, and coordinating efforts for recovery. In addition, cities have delivered financial aid to companies and families in need, and reduced or suspended municipal taxes (see European Committee of the Regions). Naturally, this has impacted their public finances and there have been various calls to change how cities are funded, in order to increase fiscal resilience. The current funding model for most cities, around the world, is primarily based in transfers from national governments. Own revenues, such as taxes, comprise the second most important source of revenue to cities, followed by external financing. The UN proposes reversing the current model, by decreasing the dependency on national transfers and increasing revenues from own revenues and external financing. The UN recommends the following:

• Provide funding to cities to support economic recovery, for example:
  • National governments could provide emergency funding to cities earmarked for service provision, infrastructure, and special relief programs for populations
• Improve the accessibility of finance and credit for local governments, by allowing them direct access to grant/loan applications and enabling them to develop public private partnerships
• “Strengthen multilateral financing and cooperation” to allow cities to fund recovery and renewal programs. For example:
  • International organizations, development banks, and national governments could establish dedicated global funds to finance urban responses to COVID-19, to help cities and their local economic and financial recoveries
  • The European Union Solidarity Fund will cover 100% of costs incurred by Portuguese cities, associated with the fight against COVID-19
• Channel financial support to productive sectors most at need. City authorities could facilitate coordinated action across urban areas to provide “loan programmes, grants, tax incentives, and temporary rent deferrals” to businesses in need
• Introduce incentives for “sustainable production and consumption through new policies, subsidies and knowledge transfers”. E.g. grants for new clean energy strategies such as green roofs
• “Address dysfunctional and exploitative development practices such as land speculation and unserviceable sprawl”, by, for example, implementing and enforcing clear regulations and introducing taxes to increase own revenues

Agriculture is fundamental to sustaining livelihoods, by providing employment, income, and being key in the response to climate change – and food security and nutrition are challenges that have been exacerbated by the pandemic. Recovery and renewal present an opportunity to reform agricultural production in line with the SDGs. One of the challenges for such reforms is funding them, given that post-COVID-19 economies will have high levels of fiscal debt. Consider the strategies proposed by United Nations Economic Commission for Latin America and the Caribbean (ECLAC) to fund the recovery and renewal actions needed for a new and more sustainable agricultural sector:

Funding and finance for response and recovery

• Focus response and recovery on food security across the most vulnerable regions, by supporting consumers and producers to acquire essential goods
• Take a regional approach to fund programs among several communities, cities, or counties, instead of focusing only on the local jurisdiction
• Implement focused tax discounts for the most vulnerable producers and consumers
• Promote payments for environmental services (PES) as a mechanism to transfer resources to producers who commit to protecting the environment, or provide an environmental conservation service
• Involve firms in specific social projects, e.g. through "parafiscal" taxes - those taxes based on employees, imports, or exports, and are used to fund part of specific programs, reducing budget pressures without risking the quality of the intervention

Funding and financing to renew

• New types of funding should be used to achieve the sustainable transformation that agriculture needs e.g. Defra’s ‘Sustainable Farming Incentive 2021 (UK) or the Agricultural Sustainability Framework (Australia)
• Invest in climate change mitigation measures in agriculture. For examples, see the following papers: ‘Technical options for climate change mitigation in agriculture’ (European Union); or ‘Strategies for mitigating climate change in agriculture’ (USA)
• Start financial inclusion programs for vulnerable agricultural producers. Such programs can be conditional on producers adopting sustainable cropping practices
• Define new approaches to social responsibility, in which firms commit to work with local government and NGOs in risk reduction programmes

Support for SME recovery is critical in the aftermath of COVID-19, as SMEs constitute the backbone of economies across the world and “account for two-thirds of employment globally” (UNCTAD, 2021). COVID-19 has exacerbated existing problems and created new ones for SMEs. The OECD report finds that SMEs are disproportionately represented in sectors of the economy that have been most severely impacted by COVID-19 (e.g. retail, accommodation and food services). “Constrained cash flows and weaker supply chains” contribute to SMEs tending to be more financially fragile and more susceptible to supply chain disruptions. Many more examples of the challenges faced by SMEs can be found both in this OECD report and others (e.g. a recent McKinsey report). The OECD report presents 15 lessons on effective policy design, including:

• Prompt delivery of SME and entrepreneurship policy support. This can be supported by strengthening digital delivery systems at both the national and local levels
• Develop start-up policies to drive innovative start-ups for recovery
• “Ensure support mechanisms are inclusive and accessible for vulnerable segments of the SME population” (e.g., minority and women entrepreneurs)
• Focus on the digitalisation of SMEs and start-ups, e.g. incentivise/provide targeted financial support/grants (local governments can sign-post local entrepreneurs and SMEs to support services e.g. Business in the Community/FSB UK)
• Establish measures to consult with entrepreneurs and owners of SMEs, to understand their needs, their priorities, and co-produce recovery and renewal plans with them

Working from home became the new normal for various sectors during the pandemic. However, this “pandemic-style” of working from home may not translate smoothly to post-pandemic working. A recent McKinsey survey of 100 executives across various industries and locations found that 90% of organisations intend to adopt a hybrid model of working (a combination of remote and on-site working). However, many organisations have only just begun to consider how this new approach will be integrated into organisational practice, resulting in employees feeling uncertain and anxious. Consider:

• Be transparent and open from the start with employees. If still in the planning stage, communicate the uncertainty of plans for remodelling current working practices
• Be clear on the current expectations of employees considering that their personal circumstances may have changed during the pandemic, and they may not be able to make a swift return to the office (e.g. consider a phased-in approach)
• Support and encourage “small moments of engagement”, which can include coaching, mentoring and co-working
• Reimagine the leadership process in your organisation. Train managers on “remote leadership” and re-evaluate current performance metrics so these represent how employees might succeed when working from home
• Develop new codes of practice (e.g. for online meetings) so that employees don’t always feel they must be available and don’t have to go from one meeting to the next, relentlessly
• Establish new ways of monitoring and evaluating employee attendance and productivity, so that employees don’t feel they need to be constantly logged into their computers to prove they are working. Focus on the work output, and assess if employees have the tools and skills to succeed, before assessing how many hours they spent logged in
• Pilot a hybrid approach that suits your organisational context and is tailored to the needs of specific teams and roles (e.g. evaluate what roles require on-site working)
• Develop new ways of monitoring employee wellbeing

Global distribution of the COVID-19 vaccine is essential to ensure that all lives are protected. As a result of vaccine shortfall, people in many parts of the world may need to wait up to three years to get the vaccine, during which time COVID-19 will continue to mutate and spread. In addition to protecting human life, global distribution of vaccines is required to protect the economy, which could be "deprived of up to 9.2 trillion dollars" if not (International Chamber of Commerce). Low and middle income countries are reliant on the work of COVAX to provide global equitable access to COVID-19 vaccines. However, mobilising the necessary support from donors is a challenge. "Greater public-private sector collaboration is required to ensure rapid and fair distribution". Many private sector companies are looking for ways to support the global vaccination effort but are unsure as to how exactly they can do this. The World Bank advises to consider:

• Aggregate funding to mobilize donors, e.g. introduce a pool fund or matching commitments, which can establish a coordinated approach from public and private donors and increase the number of and size of donations from diverse co-funders
• Establish "concessional financing" to support local businesses to develop and improve their service delivery and supply chains to better meet the needs of local vaccine programmes (e.g. small and medium sized businesses in disadvantaged sectors and locations)
• Introduce "results-based finance to improve accountability and outcomes per dollar spent on the vaccination support, as traditional grant funding is tied to inputs, not achievement of outcomes"

The pandemic has had a disproportionate impact on women's experience of work. Women are more likely to work in low-paying and informal jobs, and also constitute a significant proportion of healthcare professionals and essential workers at the frontlines. Women working in these areas, e.g. cleaners, carers, catering staff and early learning and childcare workers, and frontline workers, have had to cope with the immense pressures of providing essential services during the pandemic while also caring for children and relatives. Employers should recognise and address the adverse impacts of COVID-19 on women's experience of work, including groups of women who have been badly affected by job disruption, such as BAME women, single parents and young women. Changes to workplaces are also a direct consequence of the pandemic, meaning that some women may be at higher risk of violence or abuse. Employers play a vital role in helping women who experience abuse to access support, and should recognise that sexual harassment doesn't just occur face-to-face, but also through online platforms. Close the Gap offer guidance on an intersectional approach to workforce planning, to support local government to develop gender-sensitive employment practices. They advise to consider:

• Participate in an employer accreditation programme, e.g. Equally Safe at Work
• Collect new intersectional, gender-disaggregated data on the impact of COVID-19 on employees, e.g. access to childcare, well-being, the experience of employees at work during COVID-19:
  • Conduct a gendered analysis to identify varying experiences of women and men during COVID-19
  • Use this data and analysis to inform any return to work plans/policies and to promote staff well-being
• Conduct an equality impact assessment prior to the implementation of new workplace policies
• Engage with women working in lower paid roles to ensure their experiences are used to inform plans for recovery
• Offer support to women who are working at home, including:
  • Conduct risk assessments to determine support needs for working from home
  • Assess working arrangements and their sustainability
  • Offer flexible working to staff with caring responsibilities
  • Regularly check in with employees to see how they are managing
• Available support for female employees who are more likely to be affected by COVID-19, including those who are disabled, pregnant, returning from maternity leave, BAME
• Raise awareness of Violence against Women (VAW) policies in view of the rise in domestic violence during lockdowns:
  • Communicate zero tolerance of VAW
  • Signpost to local specialist services, e.g. Women's Aid
  • Raise awareness of reporting processes for VAW

Many individuals and families have experienced negative economic impacts from COVID-19 as a result of business closures, job losses and reduced working hours. Globally, governments have introduced financial stimuli through small business loans and furlough schemes, in an effort to mitigate the consequences of financial losses caused by the pandemic. As many stimulus packages are scheduled to end in the coming months, business owners are concerned that they will be unable to continue to pay staff, and employees are concerned that they may be made redundant. Consider:

• The need to quickly increase the capacity of local financial support and advice systems:
  • Partner with and commission community advice services, e.g. Citizens Advice Bureau (CAB)
  • Build capacity and train volunteers to increase the range of specialist and generalist welfare and debt advice that is available
  • Seek support from local businesses that can provide financial and other advice
• Increase community and business awareness of how to access support services:
  • Run information campaigns targeted at groups that need support
  • Bring together sources of good advice from trusted partners into a single location/source to make information easy to find
  • Sign post and onward refer members of the community to services
• Integrate debt and financial advice and budgeting support with forms of direct financial support

Research shows that young people experience more long-lasting labour market impacts due to economic crises than adults, including being the first to lose jobs, working fewer hours, taking more time to secure quality income, and wage scarring where earning losses recover slowly. The International Labour Organisation reported that 17% of young people employed before the pandemic had stopped working entirely, and 42% reported reduced incomes. Additionally, it is widely reported that it is becoming increasingly difficult to source workers with the right skills in sectors where job opportunities exist. Consider developing youth employment initiatives, aimed at promoting domestic employment, skills development, capacity building and enabling equal access opportunities for vulnerable youth:

• Assess your own organisation’s operations and capacity to understand where youth employment opportunities may be protected or enhanced:
  • Recognise the contribution of people who joined your organisation as young people in entry-level roles and try to ensure that restructures do not remove roles that provide a talent pipeline into your organisation.
  • Monitor for age in any furlough and redundancy plans to ensure young people in your existing workforce are not disproportionately affected
• Map labour market information of unemployed young people such as knowledge, skills and abilities, with potential sectors of employment, including consideration for the supply and demand aspects of the labour market
  • Establish a working plan with employment services centres to support registration, profiling, referral, temporary work placements and on-the-job training
• Collaborate with local government and private and public organisations to establish sectors in which temporary employment opportunities for young people could be created e.g. public works and infrastructure maintenance (Nepal)
• Align vocational education and training aimed at up-skilling young people with employment initiatives such as apprenticeships and work experience programmes
• Provide youth-targeted wage subsidy programmes to help young people enter, re-enter or remain in the labour market by reducing costs of recruitment, retention and training
• Continue to provide careers advice in schools, colleges and universities to help young people navigate their employment options during COVID. Ensure careers advisors understand the current labour market and options open to young people so that they can provide timely advice

The SDGs, represent the world's agreed economic, social, and environmental targets for 2030, and can act as a common scorecard to ensure there are objective standards for assessing progress. Localising the ambition of the SDGs to develop local economic development strategies can help integrate social and environmental standards within local economic agendas, reduce disparities between regions, generate local business opportunities and jobs, and aim to include all marginalized communities. Consider how the SDG framework can support inclusive and diversified economic growth:

• Integrate SDG targets into on-going budget reviews process, thereby improving resource allocation and performance evaluation
• Examine the link between ongoing public policies, the SDG targets and budget expenditures
• Analyse the official indicators related to budget-planning instruments
• Partner with the private sector to launch impact investment initiatives that address the SDGs, recovery and renewal from COVID-19 and sustainable economic renewal

Alongside the health and environmental risks, COVID-19 has exposed the vulnerability of current economic models. Circular economies are those that produce significantly reduced waste with the aim of producing zero through sharing, reusing and recycling products and byproducts - and the circular economy is becoming increasingly relevant during COVID-19. Consider:

• Developing more 'pay for service' models that do not require people to own goods in times of financial uncertainty e.g. using launderettes rather than having the burden of owning a washing machine provides alternatives to manage consumption, either by reducing expenditure, or opting for the basic alternative. These can be designed to support social distancing and COVID-19 measures
• Redefining and classifying what is considered essential if resources are limited or strained in order to prioritise needs. The circular economy may require redefining and rethinking the importance of certain roles, tasks, products and services e.g. the shift in perceptions of those in retail or waste management have been classified as essential workers
• Focus on local supply chains. Local supply chains can be more environmentally friendly and can also be more secure. De-globalization is a clear post COVID-19 trend. World trade is expected to contract between 13% and 32% in 2020, which indicates reliance on international supply chains may be seen as riskier than sourcing products and components locally
• Incentivize businesses, big and small, to become part of the circular economy e.g. encouraging businesses to take more responsibility for providing reusable facemasks to their staff, or supporting projects which aim to clean up and protect ecosystems from plastic waste such as disposable gloves and masks

In the USA, Black Communities are amongst some of the hardest finically hit communities as a result of the economic fallout from COVID-19. Recovery to date has shown to neglect women, Latino and Black Americans. Similar patterns are seen globally, with marginalised and already vulnerable groups being hit the hardest economically. Like many countries, this is a result of pervasive existing inequalities in access to income, assets, health, education, formal employment, equal opportunity, social protection, internet and public services. Consider:

• Explicitly acknowledging the heightened economic vulnerabilities of specific socioeconomic groups - and address these with targeted measures
• How to encourage broad public participation and collective action in government planning and response to effectively address existing inequalities and the needs of vulnerable populations as well as minimise elite capture and urban bias
• How policies should account for constraints faced by specific marginalized groups in terms of economic recovery such as job precarity, lack of education, low wages
• That economic recovery programmes that do not address these inequalities run the risk of reinforcing and deepening inequalities into the future which can burden economies and health systems
• Assessing funding proposals for their impact on different societal groups

Throughout the response to the pandemic, many private sector companies have offered donations, skills, knowledge and resources to support local and national efforts to tackle effects of the virus. Businesses have a considerable role to play in recovery and renewal as they continue to support their local communities, supply chains, staff, and wider stakeholders. Advice from the World Health Organization suggests to consider asking the private sector to:

• Protect against COVID-19 by:
  • Informing stakeholders on protecting staff and communities at work, protecting jobs and livelihoods, tackling mis-information
  • Protecting businesses through: business continuity plans, supply chain continuity, maintaining essential infrastructures and services, protecting jobs, acting responsibly towards suppliers
• Participate in the COVID-19 response by:
  • Producing essential supplies, repurposing production capabilities towards making essential supplies, providing in-kind contributions, making available supplies and services
  • Providing financial support to coordinated charity drives, supporting NGO and community needs

More information on each 'ask' is available in the WHO guide along with links to other resources and information.

The local context is extremely important. The economic impacts of COVID-19 will play out locally in different ways. Consider:

• Engaging with local businesses and stakeholders regularly to understand the needs and concerns particular to the area and to inform local government's funding agenda
• Identifying projects which can be fast tracked, or are of particular concern to the local economy and need immediate funding
• Mapping of specific local industries that have been hit hard by impacts of COVID-19 such as tourism, or certain types of manufacturing as these will need attention to avoid long-term, potentially generational impacts of economic decline
• Capacity mapping of skills to develop programmes to upskill and train people in priority employment sectors - this may be industries such as construction
• How to support Small and medium-sized enterprises (SMEs). SMEs represent around 80-90% of business in many national economies and are deeply integrated in local communities economically and socially. They provide spaces for innovation, competition and are an essential source of employment

TMB Issue 10 brings together the reflections of our learning ffrom the first 10 weeks of gathering lessons on recovery and renewal from COVID-19. Follow the source link below to read all of the reflections from our team (p.9-15)

A guide by UNDRR and partners sets out 10 core steps of business resilience to COVID-19 that is particularly relevant for small businesses. These include:

• Stay informed. Identify at least one workplace team member to be a Focal Point for COVID19. The focal point can help coordinate readiness activities, distribute information, answer questions and to coordinate staff roles and responsibilities during an outbreak
• Identify core products and services which are essential to the survival of your business. Be prepared to change your business practices if needed to maintain delivering your essential services or products
• Communicate plans with employees and customers
• Establish policies for physical distancing, hand sanitizing, and safe working at work
• Protect employee health. Provide public health materials on COVID-19, regularly clean surfaces that are often touched, and train your staff on what your COVID-19 response plans are once you have completed them. Also maintain the privacy of employees with confirmed or suspected COVID-19 infection and inform employees that some may be at higher risk for severe illness
• Plan how to operate with absent employees
• Prepare your supply chain. Identify and talk to your critical suppliers, identify alternate supply chains, understand your position in the supply chain
• Plan to modify service delivery to customers
• Apply for crisis assistance from government and business associations
• Exercise your COVID-19 plan. Consider using existing standards to do this, such as ISO 22301 business continuity management

The World Economic Forum suggests 5 key areas which businesses should focus their recovery:

Reskilling and upskilling deeply human skills as well as digital skills

• It is critical that employers emphasise retraining workers and that governments build upskilling and reskilling into the fiscal stimulus they are injecting into economies

Supporting the jobs of tomorrow

• Employers should focus on professions that care for people, support the planet, manage new technologies and communicate products and services

Prioritizing redeployment and re-employment

• Rapidly redeploy furloughed workers to high-demand roles, such as logistics and care provision
• Provide job market insights, job market intermediation (match-making services), and job-search assistance

Re-evaluating essential work and improving the quality of jobs

• Consider increasing the payment of essential workers and improving their job security

Resetting education, skills and jobs systems for post-pandemic recovery

• Critical collaboration between employers, governments and workers both nationally and globally is essential to reskilling and upskilling individuals - especially those in low paid precarious jobs