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Editorial | Innovate or die

The title of this piece might seem harsh, but it perfectly illustrates where businesses around the world are right now in the face of this global health crisis. As the enhanced community quarantine triggered a snowball of closures for non-essential businesses, employers and employees are having a tough time coping up.

Although the numbers are still not in, the pandemic will likely result in double-digit unemployment rate for the Philippines, after plunging to a record low of 5.1% in December 2019. But that is not the problem. It is the fact that COVID-19 would change the business landscape from hereon.

For example, even if the government relaxes the quarantine measures, everybody will deal with the new normal until the vaccine becomes commercially available or herd immunity develops, whichever comes first.

The Davao City Chamber of Commerce and Industry suggested that local businesses must learn to innovate how they deliver their services and goods to their clients. The odds are already stacked against the country’s SMEs due to the high rental and labor rates, competition, and lack of infrastructure support.

Only about half of the small and medium businesses around the world will survive the first five years. Harsh as it may sound, the virus just cut short their life expectancy unless they accelerate their business model innovations.

The next few months will be critical. With zero or minimal sales, they would have to catch up with their payroll, bank loans, utility bills, and rental payments. No industry is spared from the aftershock. While they are still not operating, businesses should take this opportunity to crowdsource ideas from their loyal patrons and employees to improve product delivery, streamline workflows, and cut wastage.

Moving the operations online can also be an option. For instance, some of the biggest IT companies in the world, such as Buffer, Automattic, and Basecamp, do not even have a physical address to speak of but they are worth billions.

COVID-19 has shone a spotlight on the deficiencies in our healthcare systems, particularly on personal protective equipment or ventilators. There might be some opportunity there for 3D printing companies to add value to their production.

The rule of thumb in an economic slowdown is to scale down spending. However, local companies have to bite the bullet and spend on technological innovations and business intelligence. They must innovate or die.

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