- National governments are struggling with the prospect of post-COVID recession.
- SMEs, critical to the recovery, need digital support to allow them to innovate.
- The pandemic recovery period is also key to fully implementing a green economy.
From a foot-operated handwashing machine invented by a nine-year old boy in Kenya, to a new "sky park" opened in Bangkok on an disused railway line that could serve as a model for greening abandoned spaces, to the roll-out of robots in health centres in Rwanda, the pandemic has unleashed an unprecedented wave of home-grown innovation. Communities are adapting, improvising and looking beyond this unparalleled challenge. The question now is how we can support this momentum to foster the conditions to create much-needed jobs and new opportunities as the recovery begins.
At present, governments across the globe are struggling to respond to an unprecedented socio-economic crisis. Millions of people without social protection or healthcare have lost their jobs and livelihoods overnight. For the first time since 1990, human development is on course to decline as a result of the pandemic, while decades of hard-won progress on the Sustainable Development Goals is now being reversed. And worryingly, the pandemic could push the number of people living in extreme poverty to over 1 billion by 2030 unless focused action is taken now.
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With small and medium-sized enterprises (SMEs) representing about 90% of businesses and more than 50% of employment worldwide, supporting SMEs to innovate is crucial not just to keep their shutters open – but to power to the global recovery. As part of our role in leading the UN’s socio-economic response to the pandemic, the United Nations Development Programme (UNDP) is supporting the entrepreneurs, small businesses and workers of the world.
In Uganda, for example, we teamed up with the online shopping business Jumia Food to launch a new e-commerce platform to keep SMEs in the informal trade sector afloat as the country went into lockdown. Or in Bangladesh, UNDP supported the rapid roll-out of an online marketplace to allow over 1,000 SMEs to sell their products online free of charge.
Building on this clear need, UNDP, the United Nations Global Compact and the International Chamber of Commerce have joined forces with DHL, Microsoft and PwC to launch the Recover Better Together, a COVID-19 Private Sector Global Facility initiative. Among a range of areas, it will help women-led businesses to get back on their feet and apply digital solutions to adapt to the new “COVID-19 economy”.
Moreover, the UN is putting increased emphasis on a “bottom-up” development approach where communities themselves define their development trajectory. That includes making effective use of technology and digital disruption to quickly identify and scale up much-needed solutions. Reflecting this shift, the UNDP Accelerator Labs network is currently working with communities in 116 countries to find local, frugal innovations that can create new jobs: everything from supporting a “3D Community” to design, produce and distribute Personal Protective Equipment to health workers, to spurring new ways of managing waste through a “collective intelligence” approach. Key actors, including development banks, investors and the private sector, need to sow the green seeds of growth by making long-term investments in innovation, including targeted support to women and youth-led SMEs.
The pandemic has highlighted how digital connectivity is fast becoming the global metric of inclusion and exclusion: 3.6 billion people are still offline. In regions like Latin America and the Caribbean, a large percentage of workers in the region are employed in jobs requiring close physical proximity, where remote-working is simply not feasible. And one in three children missed out on remote learning when COVID-19 shuttered schools with students in countries with low human development disproportionately affected.
Therefore, we need renewed efforts to ensure access to affordable broadband, the nervous system of today’s new digital economy. A worthwhile investment of $428 billion could achieve universal broadband connectivity by 2030. Other efforts may hold promise. Amazon’s Project Kuiper, and Starlink by SpaceX aim to launch new satellite constellations to provide broadband to marginalized communities. New connectivity could allow thousands of SMEs to do business online for the first time, generating new jobs. And the internet is vital to realize the potential of the fintech revolution. As the UN’s eye-opening People’s Money report points out, access to big data and analytics can rapidly accelerate the delivery of the $5.2 trillion in annual financing needed by SMEs in developing countries.
While support to SMEs and innovation is crucial – we also have an opportunity to realize systemic changes in the global economy that will help achieve the goals of the Paris Agreement and propel the creation of new green jobs at the same time. To this end, UNDP is currently supporting 115 countries to enhance their Nationally Determined Contributions under our Climate Promise. Our aim is to help insert the “DNA” of a green, inclusive economy into all COVID-19 recovery and stimulus measures. From Serbia to Tunisia to Indonesia, we are seeing a growing realization among countries that abandoning fossil fuels and embracing clean, renewable technologies offer an unprecedented opportunity to boost economies. This accelerated energy transition could create an additional 5.5 million jobs by 2023 compared to previous scenarios.
UNDP’s 2020 Human Development Report highlights that in the midst of the COVID-19 pandemic, we are at an “unprecedented crossroads in history”, in which human activity has become a dominant force shaping the planet, threatening significant development reversals. The report argues that nothing short of a great transformation – in how we work, live and cooperate – is needed to change the path we are on. That means sustaining the incredible spurt of bright ideas and boundary-breaking in the wake of COVID-19. A new level of support to home-grown innovation in key areas like the green economy and the digital revolution will be critical to create the jobs and opportunities that are needed more than ever.