The COVID-19 crisis highlights that social and economic policy are, in fact, two sides of the same coin. 

Lives and livelihoods are intertwined – action on one impacts on the other. Efforts to stem the health and transmission effects of the coronavirus cause a massive and sudden reduction in economic activity. This, in turn, means income and job losses and business shut-downs, many likely to be permanent.

These problems are complex and communal. 

They are not solved by separating social from economic issues. They are not solved by more intense competition, nor by government fiat or even, generous rescue packages. We need policy and regulatory innovation and uncommon collaboration across governments and between business, government, the health system, and community interest groups. 

This global crisis has demanded collective sacrifice, which in recovery, requires a social contract that similarly benefits everyone. All must mobilise to address this common purpose, and ensure that all sections of the community get a ‘fair go’.

For business, this means heightened societal expectations. There will be more scrutiny of the social relevance and contributions of business enterprises for the common good. What businesses do and say in responding to the impacts of the virus will be remembered by consumers and the general public.

Businesses must give greater weight to the non-market aspects of their strategy, making these at least as prominent as action to secure profits post-crisis.

This is the new reality of social purpose in business and of the quest for shared social and economic value.

REFERENCES:

Lesser and M. Reeves, Boston Consulting Group, Leading Out of Adversity, BCG Perspectives, 9th April 2020.

Institute of Public Administration Australia, NSW, IGNITE newsletter, COVID-19 and the frailty of the social contract, reprinted from Financial Times, accessed on 16th April 2020.