Covid 19 and beyond!
World historical timeline has been divided into BC (Before Christ) and AD (Anno Domini). As Covid-19 challenge does not seem to be shrinking at expected pace and is posing threat at such level and is turning out to be such a watershed event that it can be said to be dividing world into another BC and AD which is ‘Before Corona’ and ‘After Disease’. Going further with history, it seems to be repeating itself. Bubonic plague was originated in Wuhan, China in 13th century and then it spread all across the world. Similarly, Covid-19 disease originated in same Wuhan China in 20th century and then spread across the world as well. Only difference in these two events is that, it took 16 years for Bubonic plague to spread across world in 13th century; while it took just 16 weeks for Covid-19 to engulf the world in 20th century. This has happened due to technological development, easy ways of transportation, more intermingling of people, societies and nations. With ever increasing pace of technological developments, this itself is a challenge in future to deal with the rapidity of spread of pandemics and these kinds of events.
To analyze Sociopolitical, economic impacts of this pandemic, 1.6 billion children are suddenly out of school and very few of these are able to manage education online. There have been more than 17 million infected cases and more than half million deaths across world. There is a huge destruction in terms of economy with reference to impacted supply chains, share markets, business working capital, revised business decisions and overall willingness on new investments both from suppliers and customers. There has been huge written off capital. 71 million people have moved from poor to extremely poor in this duration. Gains of years have been lost in a matter of few months.
Major characteristic of change that is seen in comparison to Bubonic plague or other pandemics post that is the rapidity of the changes. Many changes are rapid but all are not new. For example, work from home is not a new concept; but pace at which this has been commonly adapted in terms of size and scope is definitely unprecedented. Many companies are looking for options of continuing work from home facility as it has been realized that it is helping in reducing a huge cost. Experts in Telemedicine field think that what would have taken 10 years for market development and market penetration for telemedicine as per Ansoff matrix, has happened in just 10 days. But not all changes are obstructive. Due to reduced human intervention, there has been recovery of environment, and great signs are seen for rivers, ponds, flora and fauna. This has reiterated the fact that reducing external human intervention is an easy way to improve climate and ecosystem quality. Nature has its own healing mechanism and efforts in future can be organized in the direction of reducing external intervention more and less on improving quality of already polluted land and water.
To think of possibility of such catastrophic events which are possible in future, climate change impacts will be at higher hierarchy. Both pandemic and climate changes have similar characteristics and impacts like physical, socio economic, systemic, non-stationary (cannot use past data to predict future), risk multipliers, aggressive, having most impact on most vulnerable and poorest sections of society which in turn have huge impact on economic growth, huge disruptions on demand and supply side and have huge potential for global transmission and global amplification.
Supply chain resiliency is a key term among these challenges. JIT — ‘Just In Time’ now also needs to consider JIC — ‘Just In Case’ scenario as well; and global supply chains need to be prepared for possible future disruptions. Now is the time for industries to take a pause and reimagine and rethink about future trends and ways to tackle disruptions. Supply chains cannot work in isolation. Now they need to increase integration with global supply chains.
To analyze current scenario, learning from it and going forward gets us to below options. Each industry and each nation needs to choose one among below based on priorities and goals.
1) Buy: This option is about buying everything from pins to piano. Currently as far as drug development is concerned, 70% API (active pharmaceutical ingredients), most critical factor in drug development is bought from China. Such heavy reliance on one statkeholder can be critical in cases like pandemics which halts the rolling economic cycles across the world. In such cases, the producers will prefer to suffice internal needs first and will have discretionary power to decide whom to supply and whom to not. Additionally, such heavy reliance on one stakeholder will reduce the negotiation power of buyer and may have to pay the price at will of supplier.
2) Make: There are two ways of making or creating — one through innovation and second through assembling or tolling process. Assemblers or tollers have limited scope as far as complete product/ service development is considered. They have less to no clarity on research and development part and this is a marginal profit model and is not sustainable in long term. Eg. Micromax, Karbon mobiles had market share of 45% just 5 years back in Indian cellphone industry. But they neither had own research and development facility nor there were any efforts in that direction. These companies had overreliance on low cost strategy; and hence market share of these companies has reduced to 7% from 45% in less than 5 years when other companies like Oppo, Vivo and Xiomi entered market in same segment which had in house developed technology and had products with innovative and new features available.
When buy option is overruled and Make option is perceived; and when market and conducive environment is made available, effects are immediately visible. India who had shortage of PPE kits few months back is exporting PPE kits now. Apps like Chingari who are replacement to Tik Tok are created in no time. Jio meet is available as a replacement to Zoom, and many such examples are available.
3) Buy to make better: There are few examples where companies have bought technology and packaged it well while going to market. Eg. Sony in Japan bought transistor patents from US and redeveloped and repackaged in its own way such that Sony became world leader in the segment surpassing US companies and now is an established company with own offerings. This option is suitable for a strategy which plans to start with market penetration and then diversification of product/ service diversification.
4) Make to buy better: Next option is making something with continuous research and innovation. There are several instances when technology is not provided to India. Eg When technology for supercomputer was declined to India, india established CDAC- centre for development of advanced computing in India and created Param 8000 supercomputer. Washington post headline that day said, ‘Angry India does it!’. When incremental developments in Param 8000 were done and when India reached Param 10000 in few years, same technology which was declined to India was offered. Making own products help to buy better in this way. 'Simputer' which was a low cost alternative to PCs was developed in India so that school kids can get acquainted with PCs. This device had touch, site and audio features in seven Indian languages and it was created six years prior to launch of first iPhone. It used 3-axis accelerometer technology, same technology which was used in first iPhone six years later. Samsung’s recent S-Pen i.e. pen input technology was available on Simputer . It is important to have talent and technology; but most important game changer with this option is trust. Had Simputer been perceived as much as iPhone was, it could have created a huge market.
5) Make it together: There is limited roles of universities, national organizations, nations as far as solution creation is considered. In current pandemic, 136 countries are working together for Corona vaccine development. This intra nations or inter nations cooperation should not be limited to pandemic situations only. Make it together option will help to achieve targets sooner and better.
UNESCO director general Frederico Mayor Zaragoza had once famously said that knowledge flows from west to east, while wisdom flows from east to west. It is a time to realize that knowledge is wisdom and wisdom is knowledge!
