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)

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

New Zealand has developed a trade recovery strategy to protect jobs, increase employment and drive economic recovery. The strategy is shaped by three key priorities:

'Retooling support for exporters':

• Provide intensive support to exporters through tailored mechanisms to build capabilities and "connect with overseas markets and global partners"
• Strengthen online tools and services for exporters, e.g. "make trade barrier portals more user-friendly for exporters facing challenges offshore"
• Expand tools and services to SMEs through 'NZTE's Regional Business Partner network'

Refreshing key trade relationships:

• Provide current "free trade agreements with greater 'in-market' and 'to-market' support for exporters" - ensuring better support to an increased number of markets
• Intensify the existing trade diversification strategy and leverage New Zealand's reputation as a trusted trade partner
• Further the progress made on free trade agreements, through new negotiations e.g. with the UK
• Expand on the 'Comprehensive and Progressive Agreement for Trans-Pacific Partnership'

Reinvigorating international trade architecture:

• Support the World Trade Organisation and the Asia-Pacific Economic Cooperation to protect the multilateral rules-based system, develop consensus on policies to support recovery, and "push back against protectionism"
• Similarly, "pursue new 'plurilateral' negotiations, e.g. The Digital Economy Partnership Agreement and the Agreement on Climate Change, Trade and Sustainability"

TMB Issue 33 discussed examples of how Australia and Rwanda are working to recover tourism through the promotion of domestic tourism. In Ireland, the next phases of their "Business Continuity Scheme" include targeted recovery strategies for Tourism Transport businesses, local tourism and hospitality businesses, and attracting international tourism. Consider:

• Partner with national/local tourism agencies (e.g. Failte Ireland/Tourism Ireland) to collaborate on the development and administration of tourism recovery schemes
• Provide funding and grants to tourism transport operators such as car rental companies, chauffeur, limousine, local taxi firms and escorted tour providers, to support their future operations and business continuity
• Set up a "Travel Trade Event" to bring international tourism partners, local governments and local tourism businesses together. Irish tourism businesses met virtually to sell "the best of Ireland" to 216 top international tourism buyers from across the world
• Seek funding to develop and build permanent outdoor infrastructure to increase dining capacity locally, to support local hospitality business as they re-open

During response, individuals and organisations have shown a huge outpouring of support through donations of their time and resources. Now, with people going back to work and assuming their pre-COVID activities, people and organisations may have less time to volunteer to the effort, or there may be less suitable volunteer opportunities available. Instead, people may want to show their solidarity in other ways, including by making financial donations. Consider establishing a relief fund, and publicizing its cause, to give an organised mechanism for people and businesses to show their solidarity. An organised mechanism should give people confidence that their donations will be governed appropriately.

The "Monaco Safe" initiative aims to certify shops, hotels, restaurants, museums and all places open to the public to ensure that they provide the best conditions for customers/visitors and follow the health protocols outlined in https://teleservice.gouv.mc/monaco-safe/. Businesses that are awarded the certification are allowed to use the official "Monaco Safe" logo in their communications and receive visibility on State networks including tourist information authorities, the Monaco Economic Board, and others. Consider if certification could:

• be given to those places that comply with health regulations to combat the spread of COVID-19
• be awarded following certification processes that examine the implementation of health protocols
• be obtained by completing an online procedure
• acknowledge the efforts of the business to provide the best condition
• be voluntary and free of charge and quick

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.

A number of countries and regions rely on a tourism industry to support cultural heritage and the arts. The closure of borders and internal movements within a country has disrupted tourist businesses such as accommodation facilities, travel agencies, tourist guides, service industries, and the arts. Consider how to:

• Encourage the enjoyment of cultural heritage in a way that is compatible with restrictions
• Create a dedicated website that lists all available arts and culture in the country or region such as Italy's "Culture does not stop" site
• Curate online exhibitions by gathering contributions from art historians, archaeologists, archivists, librarians, restorers, architects, authors, writers, actors, musicians, etc.
• Employ online guides or experts to provide 'tours' of cultural sites, museums, etc.
• Ensure content is regularly updated in the same way physical cultural experiences are

To accommodate social distancing rules, businesses such as bars and restaurants are able to use additional outside space. In Manchester city (UK), quick applications for temporary tables and chairs licences have been developed by the local council for those expressing interest in expanding their operations. Business owners are required to upload a scale plan of the proposed licensed area with the application. East Devon District Council (UK) provide the following COVID-19 checklist for businesses before they begin operations:

• Undertake a licence health check and a risk assessment to comply with COVID-19 regulations e.g. social distancing guidelines; hygiene information; entry/exit routes; pick up/drop off instructions; service and payment instructions
• Ensure the Designated Premises is named on the licence (the DPS) and still working at the premises, and update any changes to the premises licence or registered address
• Ensure relevant amendments are made to the current licence e.g. opening hours, operational conditions, or layout/plan. New areas may not be licensed e.g. the bar area may have changed
• Follow-up planning consent for building works and ensure compliance. Bars, marquees, structures or fixed furniture outside for more than 28 days may need planning consent
• Liaise with neighbours and resident associations as noise levels may increase due to outdoor operations so residents may be affected by noise
• Assess if the premises licence is fit for purpose e.g. modifications to trading hours or working conditions

The 'Edinburgh Lockdown Economy' is a listings directory for businesses in the city that has launched an interactive online experience to support firms suffering from lost revenue. The online directory provides an opportunity to resume trading for businesses that are struggling to run their usual services. Consider facilitating similar local platforms that allow:

• Small businesses to host virtual tours or experiences of their products and venues
• Customers to join live sessions such as wine tasting or massage workshops
• Products related to each experience or workshop to be delivered to customers in time for them to take part in the event
• Electronic payments to support less digitally enabled businesses

In one city in Denmark, a number of meetings are being held with local businesses to support local business and economic regeneration. These include:

• Weekly meetings with the local business association and the Mayor to explain the citys economic situation, advise on help packages for businesses, and explain business regeneration schemes
• Additional meetings to ask local businesses what type of projects they need to have funded immediately to inform local government's funding agenda
• Meetings to allow local businesses to bid for local regeneration projects funded by local government. These have included retrofitting schools with solar panels, renovation of local high street shops and buildings, and road works
• Local government have committed to paying invoices to business at the beginning of projects rather than the end, to provide businesses with more liquidity

This lesson was contributed by a Chief Resilience Officer in Denmark during project data collection.

In Colombia, a programme to support rural agricultural production and urban restaurants has been developed. With the support of local government, produce that is normally sold at farmers markets is now being sold to restaurants. Restaurants have transformed into mini food markets within their local neighbourhoods. This has helped to meet local food demands, provided a market for local produce and maintained community cohesion.

This lesson was offered by a Chief Resilience Officer in Colombia during project data collection.

Consider:

• Enhance Small - Medium Enterprise loans and provide businesses with continuous access to credit during these hard times
• Require that banks and finance companies which apply for low-cost government funding to pass on the savings to their borrowers
• Improve digital innovation to support and enable SMEs to access global markets via business to business (B2B) or business to consumer (B2C) digital channels, and to participate in B2B marketplaces so as to benefit from overseas procurement demand

In China, all major stores have provided discount vouchers to consumers that are readily available on a commonly used App. QR discount codes are also readily on display in many shop windows so customers can scan the code and receive a discount in store. The government is encouraging stores to offer large discounts to consumers.

This lesson was contributed by an International Engagement Officer based on China during project data collection.

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

In Korea, SMEs are being supported through national campaigns. Consumers are encouraged to purchase local products through drive-through stations. This supports local vendors selling their products direct to the consumer, and helps consumers who may be able to purchase items at lower prices due to lower overhead costs.

Corporate buyers are supported by government through virtual meetings to match buyers to supplier SMEs, in consultation with the Korea SMEs and Startups Agency and Korea International Trade Association. The government will hold virtual consultations online for 400 SMEs at least twice a month (total of 10 times), over the period of 4 months (April to July 2020). The government will invite 30-40 buyers from abroad and 30-50 SMEs per session to match corporate buyers to Korean SME providers. The government will also provide consultation and follow up measures.

In Australia, the Victorian Government has set up a dedicated taskforce to energise the state's building and development industry as it continues running throughout the COVID-19 crisis. Government announced the approval of four new projects worth more than $1.5 billion dollars that will continue to function throughout pandemic shutdowns and economic recovery period.

This lesson was contributed by a Chief Resilience Officer in Australia during project data collection.

In Vietnam, the World Bank has stated that the economy has remained resilient.

Government measures to support economic recovery:

• A US$10.8 billion credit support package
• Lowered interest rates
• Delayed payment of taxes and land use fees for several business lines
• Banks cut online transaction fees to encourage cashless payment

Industry measures to support economic recovery:

• Retailers encouraged orders by phone and apps which allowed retailers to hire more delivery personnel to meet demand
• E-learning facilitated demand for hardware such as laptops and tablets and software services such as Zoom

In China, where SMEs make up 80% of Chinese businesses, the following measures were adopted to encourage recovery:

• SMEs were exempt from social security contributions, tax payments, and social insurance schemes for up to 5 months. Social insurance schemes include pension payments and employment injury payments
• Government provided procurement opportunities
• Utility fees and rent from the state were waived
• Help was provided to migrant workers as SMEs often rely on their labour. Government organised door-to-door transportation from workers' homes to their work, and job matching and job searching tools were developed to help those out of work find employment in struggling businesses

This lesson was contributed by a Global Development Expert in China during project data collection.

Consider:

• The cash flow of SMEs and their profit margin. In Sweden, SMEs can generally manage their cash flow at this time for around 6 weeks and only have margins of 2-3% to rely on which makes them extremely vulnerable
• The eligibility of SMEs for government loans. Many struggling businesses are unable to apply for government loans, and while it is possible to borrow, and postpone payment on value-added tax (VAT), known in some countries as a goods and services tax, interest needs to be paid which can be unaffordable resulting n businesses preferring to file for bankruptcy
• The wider negative impacts of increased bankruptcies e.g. consumers and companies becoming more conscious about lending and spending which can stifle the economy further

This lesson was contributed by a Security Expert in Sweden.

Consider:

• Leveraging successes - identify parts of the organization that are working successfully under the current circumstances, and what can be learned about this for future operations
• The activities of the organization - identify parts of the organisation that need to be re-opened, re-started, or increased to full(er) capacity
• Who needs to return to the work - identify the location first i.e. who is able to continue to work from home, and the possibility of terminating employment due to reduced need
• Safeguards - identify what is needed to ensure that people returning to work are safe, give consideration to the potential for lawsuits if people have to be in harm's way to keep their jobs
• Agile financial management - where the organisation manages its finances using decision support, predictive analytics, and performance management, enabling it to operate with agility

Reference: President of an NGO, USA

To get important development done, stimulate the economy, take advantage of quieter city centres, and save jobs.

Reference: Chief Resilience Officers in Greece, Australia and Mexico

This can ensure appropriate measures to recover the economy are developed. This may go hand-in-hand with the development of a resource centre for unemployed people to improve access to support. Considerations should be made to manage citizens' expectations of recovery and employment.

Reference: Chief Resilience Officer, USA