A common critique of governments and centralized organizations is that they are slow to maneuver. Just as an oil tanker requires kilometers to change course, governments and large corporations often take years to adapt a strategy to changing realities. Small businesses, on the other hand, are agile and quick to adapt because they compete and are exposed to Darwinian mechanisms. COVID-19 has laid this bare. Many companies succumbed to the extreme challenges of our current predicament, and others managed to swing it through the fence. Others yet took this opportunity to stretch out a helping hand to other, less stable companies, or society at large. The public sphere mobilized in an unusually decisive way, but so did the private sector, and this symbiosis does deserve attention.
"Swift repurposing of existing technology requires tremendous creativity and an ability to act swiftly, something companies generally do better than governments, and startups do better than large companies."
Throughout the past few months, businesses have revamped their models with tremendous agility, often intending to tackle the pandemic head-on. Sonarax, for example, is a startup based in Israel that uses ultrasonic technology to transfer data between devices. The company's protocol requires no internet or WI-FI and is more secure than wifi and Bluetooth. The technology, which was developed for application in contactless payments and authentications, was perfect for enabling social distancing. What began as a B2B protocol developed into a contact tracing app called SONAR-X. Swift repurposing of existing technology requires tremendous creativity and an ability to act swiftly, something companies generally do better than governments, and startups do better than large companies.
There has also been a spike in consumer-behavior analytic solutions, which might not seem crucial at first glance, but once lockdowns are eased or ceased, companies will need to get the economy back on track. When that happens, solutions such as Zoomd will be essential. The company allows clients to streamline their acquisitions at a time in which online consumer behavior changed virtually overnight, and businesses needed to shift gears online in a blink of an eye.
Crises always give corporations a chance to display their social responsibility, and the pandemic proved no different. Dating apps, such as Tinder, offered premium services, among them the ability to swipe anywhere in the world for free. The Israeli company MyHeritage, a leader in genealogy and genetic testing, has built a lab exclusively dedicated to COVID testing in Israel, separate from its DNA-testing labs in Houston, Texas. This lab is now employed by the Israeli government to perform up to 10,000 COVID analyses a day and accounts for a significant portion of the country's testing capabilities, serving as an essential part of Israel's infection suppression strategy.
Newlab, a New York tech lab, and NYCEDC, a non-profit that promotes economic growth through real estate and workforce development, worked together and developed a low-cost ventilator to gain approval and be ready for roll out in New York Hospitals within a month of development. The examples of companies taking responsibility go on and on, and one can argue that all of this stems from self-interest, since companies want to draw attention to themselves and earn publicity.
Yet the fact remains that businesses are stepping up and doing their part, whether out of Adam-Smithian self-interest or the kindness of their hearts.
"Yet the fact remains that businesses are stepping up and doing their part, whether out of Adam-Smithian self-interest or the kindness of their hearts."
There was a shift in the consciousness of global capitalism even before the emergence of COVID-19. In 2019, the U.S. Business Roundtable, composed of 181 CEOs, signed a declaration saying, "Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services."
The Roundtable then proceeded to proclaim a commitment to all its stakeholders and listed them: Customers, employees, suppliers, communities, and shareholders. The role of the shareholder has changed dramatically. In the latter half of the 20th century, the shareholder was the first, second, and third priority, leaving only scraps for the others. Better practices evidence the growth of companies' circles of concern in terms of sustainability, environmental initiatives, animal rights, workers conditions, ethical practices, and much more. This development has been a long time coming before COVID-19, but perhaps thanks to the pandemic, it might be here to stay.
"With aligned incentives between business and the greater society, companies have tremendous capacities to serve as a force for good."
The public sector is crucial for how we manage cities, localities, and states, but the power and know-how of the private are too potent to dismiss. When officials and talking heads debate how we organize society—which parts we leave to governments, and which to leave to the private sector—they ought to keep this knowledge close at hand. With aligned incentives between business and the greater society, companies have tremendous capacities to serve as a force for good. As a community, we get to reap the benefits of synergies between the public and private sectors.
This article was originally published on Nasdaq.