Hard Times Reveal Hard Truths

The tragedy of the global pandemic has shined an unflattering light on our economic and social systems while opening a recovery opportunity

Up until March 2020, everything seemed business as usual. The global economy hummed along, structurally sound and growing. At the World Economic Forum in January, leaders focused on the Fourth Industrial Revolution and how innovative business models and sustainable solutions can meet global challenges such as increasing environmental and social pressures. The fundamentals of the economy seemed strong, with transformation only possible by slowly and steadily chipping away at business as usual. In two short months, the COVID-19 pandemic dispelled that myth.

We learned several hard truths from the pandemic. The global economy can change course quickly when confronted with an externality of sufficient gravity. It is not as durable as we believed. And economic actors display unexpected agility if needed. At INSEAD, we could not host students or executive clients on campus, a severe blow to the learning environment. But, we took all teaching online in three weeks, an innovation of the learning system we never thought possible in such a short time.

The global health crisis also shined a light on some difficult truths regarding our relationship with nature. After just two months of human inactivity, the natural world emerged as resilient to human pressures and responsive to our actions. When humanity retreats into lockdown, nature reclaims the space that society no longer occupies. In a very short time, air and water quality improved, habitats expanded and house-isolated people learned the value of getting out into green space. This is proof positive that there are immediate benefits if we all act now to reduce pollution and protect our natural resources.

But perhaps most importantly, the pandemic put a spotlight on the negative outcomes of economic pressure on the environment. Habitat destruction, biodiversity loss and environmental degradation in the name economic growth have thinned the barrier between us and dangerous zoonotic pathogens. The current pandemic is not an outlier, there have been several health crises in the last decade. COVID-19 is particularly bad.

Even though this pandemic is bad, the outcomes of the crisis may not be all bad. Yes, there is an inconceivable and tragic loss in almost every country. Yes, the global economy has suffered a shock worse than the 2009 meltdown. Governments have scrambled to protect citizens, but millions have suffered. However, economists are looking forward to recovery and businesses and organisations are bringing people together again –as close as the health situation allows and with appropriate safety measures.

Our choices today regarding how we recover will steer global growth for decades to come. This is our opportunity to reimagine the fundamentals of the economy and restructure growth around the health of people and our planet. The shock to the system has opened a world of possibilities.

To capture the best possible outcomes from these new possibilities, business leaders and policymakers can incorporate three aspects into decision making.

First, this is an ideal moment to seek more sustainable models, innovative and new ways of doing business that deliver value to people and the planet. These sustainable models are increasingly common and are delivering better and better returns. Consider that investors see a higher return on responsible investment, with 77% of ESG funds outperforming similar non-ESG funds. Companies like Ikea and Mars have committed billions to sustainable forestry and farming because their supply chains depend on the natural resources an smallholder farming. With technology enabling innovation and collaboration on sustainability at a blistering pace, this is a moment to reset, rethink and rebuild with sights set on the global sustainability goals.

We see the possibility to change the course of development in the green recovery plans being pushed in countries like the US and in the European Union. We will host sessions on this in our upcoming INSEAD Summer Learning Festival. On 9 July, we will partner with ChangeNOW to host a session with “What happens to the European Green Deal in post-COVID world?”, a potential game changer in terms of a sustainable future.

With our future at stake, this is also a moment to invest in resilience and secure the wellbeing of people. Resilience means different things to different communities, with a different path forward for a small island nation in the Pacific than cities such as New York, Paris or Singapore. We look at resilience as the capacity of a system to regenerate itself following crisis – guided by science and invested in social protection for lives and livelihoods. Building resilience is a step towards ensuring businesses survive in the face of challenge. So we should invest in societies that absorb external pressures, adapt when needed and account for the wellbeing of people.

On 6 July, Paul Polman and INDEVOR will join us at the Summer Learning Festival to discuss the business advantage of building resilience in a session on how to ‘Build back better for a green, inclusive and resilient recovery’.

Finally, an inclusive recovery is essential to transform economic and social systems to benefit all people and open opportunities for global growth. Recent protests show that even in some of the most developed countries, stark inequalities and injustices remain. In our global society, with the pandemic and our looming climate crisis disproportionately impacting the most vulnerable, integrating inclusion into corporate and community policy ensures we can end discrimination and tap the full potential of our human capital.

In the spirit of inclusivity, we invite everyone to join us for a webinar later this month on equity, diversity and inclusion. We are working on a line-up of excellent speakers and will set a topic as the event approaches to ensure the discussion touches on topics relevant in the moment. And as we have seen over the past few months, the moment can change quickly. 

INSEAD is engaging around these three areas of focus –sustainable models, wellness and inclusivity, with the Hoffmann Global Institute for Business and Society working to align our business education with the UN Sustainable Development Goals. The pandemic shows that this work in this moment is critical. We look forward to sharing the results of our webinars and Summer Learning Festival sessions to further enlighten and empower leaders making difficult decisions in these tough times.

Some say the COVID-19 pandemic is the first truly global event – felt in all places by all people around the world in an almost singular moment. The outcomes of the pandemic – this global event – are uncertain.

But we can share a certainty as educators – that decisions today about how to recover are decisions about the global economy we hand over to tomorrow’s leaders. This our moment to take action on COVID-19 recovery that sets us up for success defined not just by profits, but by better outcomes for all people and the planet. This is our moment to set the next generation up for success.