Authors: Krishna Raghav Chaturvedi & Vikas
Economics is a strange subject. There are many ways to define economics. The father of Economics Adam Smith characterized Economics as “An inquiry into the nature and cause of wealth of nations”. However, there is no concrete definition as no single definition is globally accepted.
So it’s prudent to have an idea about what Economics is rather than looking for a definition. The stretch of economics is vast. It may talk about some rare yet valuable source like diamond and also vastly abundant resources like air. By virtue of its scarcity, a diamond is priced high and as air is abundant so it has no price. But while we can live without diamonds, can we live without air? No doubt, this is why air is priceless and people are yet to put a price on air. Adam Smith’s studies showed that “the things which have greater value in exchange has almost negligible value in use and vice versa”. Another example water, it has great value for us. We can’t live without it, but hardly can we buy anything by bartering it. But as the human tendency is to care for scarce more so Economics and by extension, economists talk about scarcity more often than not. This is where sometimes, even a learned Economist falters in his quest to understand “real economics” and finds the need to go back to his books. At other times, even a less literate chai-walla comes up with the most ingenious of the solutions to the most typical of challenges. This may be because we tend to see “Economics” as a subject, like Physics, Chemistry or Biology with some rigid laws and theorems. However, even the laws of Physics seem to change in certain cases. Economics, on the other hand, can and should never be seen in isolation. There is caste economics, political economics, regional economics, behavioral economics, national economics, sub-divisional economics and much more. This is where many economists fail and this is where some from the real grass roots really shine.
There has been a lot of buzz about the recent slowdown in the Indian GDP growth. While the GDP growth slowdown can certainly be linked to the twin shocks of Demonetization and the implementation of the Goods & Services tax (GST), critics of the present dispensation are presenting it as an Armageddon. Yes, Economy is Economics at play in a certain region, the certain region here in question being India. Demonetization was a behavioral change and the GST, a structural change. Such radical and far reaching changes are going to have an impact on the economy and yes, they have had their pound of the flesh. But to decry the entire process and denounce the present ruling dispensation as inept requires a special kind of narrow mindedness and selective criticism, a behavioral trait that is common with the critics of the ruling political party of India, the Bhartiya Janta Party (BJP) and its leader, Shri Narendra Modi.
True, as the critics claim, the economic growth has slowed. True, jobs are been created at an abysmal rate. True, present government measure’s aimed at boosting manufacturing (Make in India) and promoting job creation (Start-up India, MUDRA etc.) have failed, some quite spectacularly. True, these signs do not bode well for the Indian economy, nor in the short term and certainly never will in the long run. Yes, the ruling National Democratic Alliance (NDA) is at fault here. But not for making a mess of the economy, for which their predecessor, the United Progressive Alliance (UPA) deserves full credit but for failing to bring out a white paper on the state of the economy when they took the reins of the Indian Government in 2014. For failing to show the public the true grim picture of which the UPA government left us in and the hell hole we had dug for ourselves with continuous tax evasion, black marketing and numerous scams which had dominated the public discourse (2G, Coalgate etc.) before 2014. And this is why, their defense of this lag in growth is being questioned and this is why, the present ruling dispensation and the prime minister, Shri Narendra Modi and his finance Minister, Shri Arun Jaitley must provide answers.
While this article can be far from a white paper on the state of the Indian economy in 2014 at time of the transition from the UPA to the NDA, it will no doubt portray the truth of the times and endeavor to expose the fallacies of both for the time period 2010-2017.
While GDP growth has often and more often, wrongly, cited as the criteria for growth of a country, such a calculation is far from perfect and there is a pertinent need to align growth with human parameters like living Indexes, Education, Distribution of Wealth rather than only the gross domestic value of all products and services in a country. Recently, a quarterly GDP “Growth rate” of 5.7% is cited as a slowdown (true, it a slowdown but only temporary) or a “crash landing” recession (though I doubt the critics claiming this even know the meaning of a recession). Such irrational and biased thinking is uncalled for and while, there is truth that the GDP growth has slowed, it is nowhere near the Armageddon being projected by the critics, prominent among which is the former Prime Minister of India and a very noted economist, Dr. Manmohan Singh-ji. He claimed and quoted that the GDP will suffer a contraction by atleast 2% points in wake of the Demonetization exercise. The Demonetization, an exercise in which the current Indian Prime Minister, Shri Narendra Modi-ji effectively made approx. 85% of the Indian currency redundant in a bid to attack black money hoarders, formalize the economy, cripple naxalism & terrorism, promote a cash-less economy, a digital economy and send out a strong message to the common people of India that the present ruling dispensation is serious in its bid to curb corruption.
While complete picture of the after-effects of the exercise is yet to be revealed, one thing is clear. Dr Manmohan Singh-ji was wrong. NO, the economy did not decline. No, it is neither prudent nor good economics to declare Demonetization a failure. But yes, as per the IT returns data, more taxpayers are now part of the formal economy. Certain news (unverified) emerged that poor people hired as mules to convert ill-gotten cash of some corrupt folk defrauded them of their wealth. Some mules completely decamped with the money of the corrupt. In my hometown, the state capital of India’s most populous sub-division, for the entire 50 day duration of cash exchange, not a single laborer was found in want of work. All had been hired to exchange cash from multiple banks in lieu of a daily wage. Shri Arun Shourie-ji, a noted economist and a past supporter of PM Modi has called the demonetization as the world’s biggest money-laundering scheme, I have no qualms in saying that it is indeed the world’s biggest public redistribution of wealth. While there is no reliable parameter to gauge corruption, one thing is for certain, the wrong doers will now have to think twice before thinking about stashing away their ill-gotten cash.
Inflation is an important parameter in a country’s economic growth. While the word may ring some negative connotations in our mind when heard of, it is not all bad. Like everything, too much of inflation is bad. It retards growth as buyers defer or cancel purchases as the products are too expensive, strangling the manufacturing and slowing the economy. Too little of inflation or negative inflation (Deflation) is also bad, as purchasers for various goods and services are hit by complacency, postponing purchases in hopes of more fall in prices, further constraining the demand and causing more fall in prices. Lower-than-expected inflation furthers the actual burden of debts. The lenders may benefit. However as they are more likely to save than borrowers, demand is overall reduced. It also increases rigidity in the human resources market. Workers are resistant to wage cuts in their wages, but inflation lets firms cut real wages by freezing pay in nominal terms. Deflation, by contrast, makes this problem worse (The Economist, Jan 2015). Hence, there is a need to hit the sweet spot, the right value of inflation that will ensure not only growth but also, cost less of the citizens of the state.
It is evident here from the presented data that the inflation under the UPA government was high (at least twice and possible more in the double digits). This is a cause of concern. Here this is why it is cause of concern. Suppose you earn a hundred rupee per month (GDP). Your expenses are also a hundred rupees. Now, if in the next your wage registers a growth of 8% (GDP Growth) i.e. it becomes a 108 rupees, is it a cause of jubilation? Certainly yes but then you realize that your expenses have risen by 10% (inflation). Simply said, nominal growth reduced to the base year is the real growth. This is where the current critics, especially, the former Finance Minister, Shri P. Chidambaram are wrong. In his time under UPA, the growth rate of April-June quarter of 2014 (the transition from UPA to NDA), the existent gap between real and nominal GDP was as high (by some calculations, as high as 6.5% (Jagannathan, Jun 2015, Firstpost)). Simply put, half the growth under UPA was pure inflation. This gap started to narrow every quarter after the NDA took charge, falling to 5.2 percent in Q2, 1.5 percent in Q3 and finally to a minuscule 0.2 percent in Q4 of 2015. This Narrowing of the gap between the real and the nominal growth rates tells us exactly two stories – a positive one about the NDA’s and Modi’s big success in killing inflation even when the monsoons were weak and a comparatively less positive one on the industry’s inability to raise prices – which is good for consumers, but bad for profitability, investment and market wealth creation.
Share markets are a virtual representation of growth of the top companies of the country. Seen here is a growth of the Indian Bombay Stock Exchange for the period of 2012-2017. It must be noted that fluctuations in the stock market can have a profound economic impact on the country’s economy and everyday lives of people. A collapse in the share prices has the potential to cause widespread economic disruption. Most famous of this all is the stock market crash of 1929 which triggered the great depression of the 1930s. In everyday terms, the stock market directly impacts the people’s wealth creation, pension funds, investor confidence and further critical investment. The Indian stock market has bloomed and touched new heights under the present ruling dispensation. The critics have been quick to point out that such a growth is meaningless until it is evident on the ground. Yes, exports have reduced. But unlike what the critics portray, exports have not been hit as hard by the twin shocks and while data for 2017 is yet to come, it is a general feeling that growth will observed as already, the numbers are too low to fall any further. There are reports that Indian exports have risen for the 12th straight month, touching just over USD 21 billion in the month of September (partially propelled by the phenomenal growth of Petroleum products and Chemical products export). Pessimists, however, in their bid to defame the ruling government would also like to point that our imports are increasing too. True, our imports have reached a near high of approx. USD 33 Billion (again a major chunk of the import is crude oil and gold). But on the bright side, our foreign exchange reserves have reached an all-time of USD 400 billion.
Such a huge cash pile is enough to cover for all imports for over 10 months and possibly more. Also, while it is true that the current account deficit has widened in the past four months, it is nowhere near as severe as the royal mess we were in the past. Even in the recent months, the CAD anomaly is mainly due to a sharp uptick in Gold imports (thank you Indian Aunties, who allegedly own more gold than most sovereign nations).
Pessimists are also pointing towards a lack of private spending and need for investment from alternative sources. Private investment in the country is hampered by the twin balance sheet problem (courtesy the past regime) and ever worsening NPA crisis, which restricts a financial institution’s lending ability (again, Thank you UPA). Yes, merchandise exports have fallen a bit and lending has taken a minor hit but this is reaction of the system adjusting to the changes, nothing more.
As stated earlier, GST was a structural change, revamping and overhauling the entire Indian indirect tax system. Modi deserves full points for his efforts to get a country as politically and culturally diverse as India on a single table and pass a radical bill like GST. While he was a chief minister in Gujarat, he found the UPA proposed form of GST indigestible for his state, a major manufacturing powerhouse. As the Prime Minister, he has ensured that even after the implementation of GST, the states losing revenue will be compensated for a short-period to accrue additional sources of revenue. His critics call him a hypocrite but all he has shown is a true maturity. He took a radical idea, ironed out the rough edges. He made it practical for implementation and went out of his way to get his rivals onboard for the passing of the GST bill. The implementation, like all things rest, is full of glitches but the official mechanism is tackling the problem both reactively and proactively. The situation will only improve in the coming future. It’s hilarious how the critics of Modi and an army of online trolls venerate any and every source that speaks against the ruling dispensation but even calls a venerable organization like the World Bank “biased” because of its favorable outlook of the GST. Furthermore, the sales of two wheelers, certain cars has already been recorded higher than before and collections under GST are improving and meeting their targets. Yes, GST is working.
The Demonetization was a necessary exercise. One can argue that the Indian economy was weak, or dead or hale & hearty but the timing was so perfect. With anyone even catching wind of his intentions and holding fast even when all seemed lost, in one stroke and by mere words, Modi had put the fear of law back into the corrupt. People were encouraged to come forward, report their ill-gotten cash, pay a stiff penalty and let bygones be bygones. Some did take this easy way out. This was a carrot. Now, it times for the stick. Shell corporations are identified. Action has already been taken against the directors of multiple shell companies established only to launder money. Any disproportionality of income and deposits if established, leads to a notice from the income tax department notice and further inquiry. It is painful. The Indian Income tax department like all its counterparts across the globe is despised and for good reason, it is a broadsword, not a scalpel. But we need a broadsword, now that corruption and tax evasion has become an everyday part in an Indian lives.
To conclude, while the Indian economy is slowed by the twin shocks, it is resilient and in capable hands. The pessimists may have their trends but things were bad, even worse before (in the UPA as evident by the data presented here) and now that things are finally starting to smoothen, we are bound to regain our top spot as the world’s fastest growing nation. The Indian economy is a jig-saw, complex pieces dominated by regions, cultures and festivals. It is a folly to see one in isolation or use the data of a 1-2 quarters and portend grim warnings. Diwali, the Indian festival of light is fast approaching. Let this occasion be the mark of a new India, an era of economic growth and prosperity for all. The UPA government, it too had its moments of glory and yes they were aplenty, had made a grand mess of the economy and its effects persist till this date. The lack of investment in roads and railways is costing us today in terms of time, lives and growth. Their numerous scams had bankrupted the country and virtually emptied our coffers. Modi is lucky. He only has to outperform a three legged donkey. It is up to him whether he will turn the Indian Economy into a prancing pony or a galloping steed. By the looks of it, we already are a prancing pony. But can he make us the galloping steed. Unfortunately, only time will answer this, with any certainty.
The author is neither an economist nor claims to be one.
Vikas is pursuing his PhD from the Department of Management Studies, Rajiv Gandhi Institute of Petroleum Technology, Jais
The views expressed by the authors above are personal. The authors declare that all sources used in the above article are freely accessible on the internet. The images are snapshots of existing accessible data, sources of which have been acknowledged beneath every image. The authors declare no competing financial interest.
2022: Rise of Economic Power of Small Medium Businesses across the World
Why mirrors of the Wall: To fight obesity a life-sized mirror required, to uplift the national economy a simple calculator is a critical necessity. Only, right amounts in right columns, correctly totaled show a balanced picture. In the coming days, pandemic will become endemic; the same day, all over the world, nations will suddenly start announcing economic pandemic. Observe, lingering global economic chaos still masked hiding a troubled face. As a proof, observe the absence of bold open economic strategies or real action plans.
Why lead, follow or get out of the way: Our hyper-digitized world has now openly exposed; meritocracy-centric and mediocrity-driven nations. In this global race, no nations are the same; but rules of engagement on productivity, performance and profitability and entrepreneurial behaviors are almost identical. If economic survival to save nations is critical, still why in most nations the tasks of economic development mandated to teams critically lacking the required entrepreneurial and job creator mindsets. Nations with mastery on national mobilization of entrepreneurialism will lead; others may follow or get out of the way.
Why the two wheels: What will it take for nations to immediately start upskilling their front line economic development teams on a fast track basis. How can they create real SME growth, teach the teams on real tactical battlefields to wrestle, and harness real entrepreneurialism. Otherwise, repeating already broken models under crypto-illusions speaks volume on core competency. A great future is unfolding for job seeker and job creator minds must come together as two wheels of the same cart on national economic development.
Why the wrong building: Study, why are ‘population-rich-nations’ growing in economic prosperity much faster than ‘knowledge rich nations’? Why, if you bifurcate ‘developed nations’ and ‘emerging-nations’ the emerging nations are advancing much faster. Now, when you apply a basic calculator, the ‘SME of any nation’ in the world will save the national economies but not the ‘big-business of the nation’. Study more on Google, discover the reasons, and acquire your own knowledge on such new affairs. Most importantly, if these topics still not openly discussed in your surroundings you are already in the wrong building.
Why the triangulation: To triangulate, the mastery of ‘national mobilization of entrepreneurialism’ with national SME verticals and exportability will outline the blueprints to save national economies. How will the rise of the small medium business economy not only create local grassroots prosperity but also make national citizenry happy and stable.
Why the needed adjustments: Understanding of local economic landscape; traditionally, despite being a small tax contributor, big business is allowed to stomp all over its own government, while the SME sector, the largest tax contributor of any nation, is crushed and neglected. Technology is changing this fast, SME of the world now have the tools once only available to large empires, global access reserved for large scale maneuvers now a new digitized world of micro-trade, micro-manufacturer and micro-exports will create a new tidal wave of global commerce.
Why the absence of calculator: What is stopping any political leadership to declare national mobilization of entrepreneurialism and identify IK to 1000K SME with USD$1 million to USD$10 million in annual turnover, on digital platforms of upskilling exporters and reskilling manufacturers and double or quadruple their growth in 1-2 years. Is it the absence of a calculator, domination of job seekers and non-entrepreneurial mindsets, or hidden fears of big business not allowing such massive uplift? The near future calls for digitized economies and upskilled citizenry, as basic perquisites for any functioning nation.
Why fears of the pie: Hence, the tremors in the global boardrooms and still little or no response on uplifting the tides of SME in various corresponding verticals around the world, for fears of upsetting the top leaders. Ask the big forbidden questions; why will super big players ever allow the emergence of many millions sleek, technologically advanced and global-age skilled SME to grow to only chip away their own power play and half of their pie? It may be true in some regions, but there are grassroots benefits in such advancements provided there are right mindsets and matching vision of the nation.
Why the two new forces: Hence, there exists the low-level mediocre SME economic development across the world, where lip service fills the gaps and academic studies create colorful charts and circles to point confusion and trade groups comply to remain in deep silence. The SME of the world will rise in economic power, across the world as a new world dawns. The power is already hidden in two unstoppable forces; first the technology and second the global connectivity of opinions and knowledge. Both combined now allows some 500 million SME to organize and billions displaced rejecting cubical slavery drawn into out the box entrepreneurialism. It is the easiest time across the world to dance on entrepreneurial platforms.
Why history repeats: On the course of history, no other experiment of human journey is as successful as that of Americans and how when some 100K entrepreneurs carved the image-supremacy of entrepreneurialism to last well over a century. During the same period in Europe and Asia followers of such out of the box thinkers were not only rejected by society, but also jailed as a liability to society. Nations must identify and create an ‘umbrella of entrepreneurialism’ to preserve and respect the drivers and proponents of such intellectualism and avoid such notions caught in fakery. Today Asia alone has created 500 million new entrepreneurs during the last decade. Ignoring this by any nation in the world will simply sink them.
Why the alpha dreamers: The five billion connected alpha dreamers have learned new lessons during the last 500 days; they witnessed the handling of pandemic and are now ready to study the unfolding of global economic pandemic. They realize the serious limitations of old style administrations, the inequalities, the injustice and lack of skills to cope with futurism. Covidians, the survivors of the pandemic, now vote in some 100 national elections scheduled over the next 500 days. A new way of thinking is emerging. Every day the global news increasingly focused on self-inflicted disasters and absence of corrective new measures to advance for better grassroots prosperity.
Why the next elections: Any naivety on ignoring this post pandemic metamorphism will backfire during next national elections. The national public opinion has now turned into global opinion; the populace of one country supporting the populace of another country for being under influences of the populace in a third or fourth country. Last decade our local streets molded public opinion; today global streets are doing just that. Deeply study how five billion connected slowly are forming the largest mindshare ever assembled. How all this does translates to local/global issues and what level of expertise needed to tackle bigger issues.
Why the soft power assets: The biggest losses of the nations of today are not at all their accumulated debts but continuously having greater losses of missed opportunities on the global stage. The lack of inability to recognize the soft power of a nation today is way above just the notion of culture, politics and foreign policy; it is far more extended and about nation-building, upskilling citizenry and pursuing common good.
Why broken systems: When tax laws are universally broken,universally criticized but universally remain unchanged; when there is no single supreme power left as all deemed declared useless, therefore, this calls for a major change but not from the very top rather grows from the very bottom. When economic progress remains as number one priority, why is it that only job seekers drive such economic development programs while job creator mindsets are critically ignored? Bringing both mindsets closer as a mandated agenda will bring hidden magic to the goals.
Why the deep silence: Quick test on your local economic resilience: right now, what parts of such narratives are your local governments openly engaging and deploying? What types and styles of small medium business mobilization are on the go? What level of entrepreneurialism drives ever created under what agenda? What is happening to upskilling and reskilling including women entrepreneurial drives? What level of authoritative analysis on the table to upskill current economic development teams? If most of these issues are often not new funding dependent but mobilization hungry and execution starved, why are economic development teams so scared? Is your local economy prospering? Maybe you are already far ahead. Study on Google how Expothon is gaining global attention and tabling Cabinet Level workshops and virtual events on revival of the SME power as an immediately deployable strategy to save and uplift national economies.
Why fears of facing clarity: Is this why economic development teams are so afraid? Will such ideas alter government agencies and their mandates in the future? Is this how Meritocracy will drive out Bureaucracies? Is this where the new future of economic prosperity hidden? Is this how we will advance to catch up with lost time and opportunities? Is this how nations will finally optimize already hidden talents in their national trade groups, chambers and governments to full capacity? Is this how we will eventually open new bold discussions on distribution of right intellectualism to fit the right needs of humankind?
Suddenly, how far has our world moved on; bandaged, stitched and altered in thinking, psyche damaged but still aware of common sense. Our understanding of humanity is perhaps now in search of common good. To liberate itself from strangle of old thinking, the SME economic development world urgently needs major adjustments to bring balance between job seeker mindsets with job creator mindsets. Start immediately with a quick test across the economic development departments and measure such imbalances. Study more on Google. The rest is easy.
Can e-commerce help save the planet?
If you have logged onto Google Flights recently, you might have noticed a small change in the page’s layout. Alongside the usual sortable categories, like price, duration, and departure time, there is a new field: CO2 emissions.
Launched in October 2021, the column gives would-be travellers an estimate of how much carbon dioxide they will be responsible for emitting.
“When you’re choosing among flights of similar cost or timing, you can also factor carbon emissions into your decision,” wrote Google’s Vice President of Travel Products, Richard Holden.
Google is part of a wave of digital companies, including Amazon, and Ant Financial, encouraging consumers to make more sustainable choices by offering eco-friendly filter options, outlining the environmental impact of products, and leveraging engagement strategies used in video games.
Experts say these digital nudges can help increase awareness about environmental threats and the uptake of solutions to reduce greenhouse gas emissions.
“Our consumption practices are putting tremendous pressure on the planet, driving climate change, stoking pollution and pushing species towards extinction,” says David Jensen, Digital Transformation Coordinator with the United Nations Environment Programme (UNEP).
“We need to make better decisions about the things we buy and trips we take,” he added. “These green digital nudges help consumers make better decisions as well as collectively drive businesses to adopt sustainable practices through consumer pressure.”
At least 1.5 billion people consume products and services through e-commerce platforms, and global e-commerce sales reached US$26.7 trillion in 2019, according to a recent UN Conference on Trade and Development (UNCTAD) report.
Meanwhile, 4.5 billion people are on social media and 2.5 billion play online games. These tallies mean digital platforms could influence green behaviors at a planetary scale, says Jensen.
One example is UNEP-led Playing for the Planet Alliance, which places green activations in games. UNEP’s Little Book of Green Nudges has also led to more than 130 universities piloting 40 different nudges to shift behaviour.
A 2020 study by Globescan involving many of the world’s largest retailers found that seven out of 10 consumers want to become more sustainable. However, only three out of 10 have been able to change their lifestyles.
E-commerce providers can help close this gap.
“The algorithms and filters that underpin e-commerce platforms must begin to nudge sustainable and net-zero products and services by default,” said Jensen. “Sustainable consumption should be a core part of the shopping experience empowering people to make choices that align with their values.”
Embedding sustainability in tech
Many groups are trying to leverage this opportunity to make the world a more sustainable place.
The Green Digital Finance Alliance (GDFA), launched by Ant Group and UNEP, aims to enhance financing for sustainable development through digital platforms and fintech applications. It launched the Every Action Counts Coalition, a global network of digital, financial, retail investment, e-commerce and consumer goods companies. The coalition aims to help 1 billion people make greener choices and take action for the planet by 2025 through online tools and platforms.
“We will bring like-minded members together to experiment with new innovative business models that empower everyone to become a green digital champion,” says Marianne Haahr, GDFA Executive Director.
In one example, GDFA member Mastercard, in collaboration with the fintech company Doconomy, provides shoppers with a personalized carbon footprint tracker to inform their spending decisions.
In the UK, Mastercard is partnering with HELPFUL to offer incentives for purchasing products from a list of over 150 sustainable brands.
Mobile apps like Ant Forest, by Ant Group, are also using a combination of incentives and digital engagement models to urge 600 million people make sustainable choices. Users are rewarded for low-carbon decisions through green energy points they can use to plant real trees. So far, the Ant Forest app has resulted in 122 million trees being planted, reducing carbon emissions by over 6 million tons.
Three e-commerce titans are also aiming to support greener lifestyles. Amazon has adopted the Climate Pledge Friendly initiative to help at least 100 million people find climate-friendly products that carry at least one of 32 different environmental certifications.
SAP’s Ariba platform is the largest digital business-to-business network on the planet. It has also embraced the idea of “procuring with purpose,” offering a detailed look at corporate supply chains so potential partners can assess the social, economic and environmental impact of transactions.
“Digital transformation is an opportunity to rethink how our business models can contribute to sustainability and how we can achieve full environmental transparency and accountability across our entire value chain,” said SAP’s Chief Sustainability Officer Daniel Schmid.
UNEP’s Jensen says a crucial next step would be for mobile phone operating systems to adopt standards that would allow apps to share environment and carbon footprint information.
“This would enable people to seamlessly calculate their footprints across all applications to develop insights and change behaviours,” Jensen said. “Everyone needs access to an individual’ environmental dashboard’ to truly understand their impact and options for more sustainable living.”
Need for common standards
As platforms begin to encode sustainability into their algorithms and product recommendations, common standards are needed to ensure reliability and public trust, say experts.
Indeed, many online retailers are claiming to do more for the environment than they actually are. A January analysis by the European Commission and European national consumer authorities found that in 42 per cent, sustainability claims were exaggerated or false.
In November, the One Planet network issued guidance material for e-commerce platforms that outlines how to better inform consumers and enable more sustainable consumption, based on 10 principles from UNEP and the International Trade Centre.
The European Union is also pioneering core standards for digital sustainability through digital product passports that contain relevant information on a product’s origin, composition, environmental and carbon performance.
“Digital product passports will be an essential tool to strengthen consumer protection and increase the level of trust and rigour to environmental performance claims,” says Jensen. “They are the next frontier on the pathway to planetary sustainability in the digital age.”
2022: Small Medium Business & Economic Development Errors
Calling Michelangelo: would Michelangelo erect a skyscraper or can an architect liberate David from a rock of marble? When visibly damaged are the global economies, already drowning their citizenry, how can their economic development departments in hands of those who never ever created a single SME or ran a business, expect anything else from them other than lingering economic agonies?
The day pandemic ends; immediately, on the next day, the panic on the center stage would be the struggling economies across the world. On the small medium business economic fronts, despite, already accepted globally, as the largest tax contributor to any nation. Visible worldwide, already abandoned and ignored without any specific solutions, there is something strategically wrong with upskilling exporters and reskilling manufacturers or the building growth of small medium business economies. The SME sectors in most nations are in serious trouble but are their economic development rightly balanced?
Matching Mindsets: Across the world, hard working citizens across the world pursue their goals and some end up with a job seeker mindset and some job creator mindset; both are good. Here is a globally proven fact; job seekers help build enterprises but job creators are the ones who create that enterprise in the first place. Study in your neighborhoods anywhere across the world and discover the difference.
Visible on LinkedIn: Today, on the SME economic development fronts of the world, clearly visible on their LinkedIn profiles, the related Ministries, mandated government departments, trade-groups, chambers, trade associations and export promotion agencies are primarily led by job seeker mindsets and academic or bureaucratic mentality. Check all this on LinkedIn profiles of economic development teams anywhere across the world.
Will jumbo-pilots do heart transplant, after all, economic performance depends on matching right competency; Needed today, post pandemic economic recovery demands skilled warriors with mastery of national mobilization to decipher SME creation and scalability of diversified SME verticals on digital platforms of upskilling for global age exportability. This fact has hindered any serious progress on such fronts during the last decade. The absence of any significant progress on digitization, national mobilization of entrepreneurialism and upskilling of exportability are clear proofs of a tragically one-sided mindset.
Is it a cruise holiday, or what? Today, the estimated numbers of all frontline economic development team members across 200 nations are roughly enough to fill the world-largest-cruise-ship Symphony that holds 6200 guests. If 99.9% of them are job-seeker mindsets, how can the global economic development fraternity sleep tonight? As many billion people already rely on their performances, some two billion in a critical economic crisis, plus one billion starving and fighting deep poverty. If this is what is holding grassroots prosperity for the last decade, when will be the best time to push the red panic button?
The Big Fallacy of “Access to Finance” Notion: The goals of banking and every major institution on over-fanaticized notions of intricate banking, taxation are of little or no value as SME of the world are not primarily looking for “Access to Capital” they are rather seeking answers and dialogue with entrepreneurial job creator mindsets. SME management and economic development is not about fancy PDF studies of recycled data and extra rubber stamps to convince that lip service is working. No, it is not working right across the world.
SME are also not looking for government loans. They do not require expensive programs offered on Tax relief, as they make no profit, they do not require free financial audits, as they already know what their financial problems are and they also do that require mechanical surveys created by bureaucracies asking the wrong questions. This is the state of SME recovery and economic development outputs and lingering of sufferings.
SME development teams across the world now require mandatory direct SME ownership experiences
The New Hypothesis 2022: The new hypothesis challenges any program on the small medium business development fronts unless in the right hands and right mindsets they are only damaging the national economy. Upon satisfactory research and study, create right equilibrium and bring job seeker and job creator mindsets to collaborate for desired results. As a start 50-50, balances are good targets, however, anything less than 10% active participation of the job creator mindset at any frontline mandated SME Ministry, department, agency or trade groups automatically raises red flags and is deemed ineffective and irrelevant.
The accidental economists: The hypothesis, further challenges, around the world, economic institutes of sorts, already, focused on past, present and future of local and global economy. Although brilliant in their own rights and great job seekers, they too lack the entrepreneurial job creator mindsets and have no experience of creating enterprises at large. Brilliantly tabulating data creating colorful illustrative charts, but seriously void of specific solutions, justifiably as their profession rejects speculations, however, such bodies never ready to bring such disruptive issues in fear of creating conflicts amongst their own job seeker fraternities. The March of Displaced cometh, the cries of the replaced by automation get louder, the anger of talented misplaced by wrong mindsets becomes visible. Act accordingly
The trail of silence: Academia will neither, as they know well their own myopic job seeker mindset. In a world where facial recognition used to select desired groups, pronouns to right gatherings, social media to isolate voting, but on economic survival fronts where, either print currency or buy riot gears or both, a new norm; unforgiveable is the treatment of small medium business economies and mishmash support of growth. Last century, laborious and procedural skills were precious, this century surrounded by extreme automation; mindsets are now very precious.
Global-age of national mobilization: Start with a constructive open-minded collaborative narrative, demonstrate open courage to allow entrepreneurial points of views heard and critically analyze ideas on mobilization of small mid size business economies. Applying the same new hypotheses across all high potential contributors to SME growth, like national trade groups, associations and chambers as their frontline economic developers must also balance with the job creator mindset otherwise they too become irrelevant. Such ideas are not just criticism rather survival strategies. Across the world, this is a new revolution to arm SME with the right skills to become masters of trade and exports, something abandoned by their economic policies. To further discuss or debate at Cabinet Level explore how Expothon is making footprints on new SME thinking and tabling new deployment strategies. Expothon is also planning a global series of virtual events to uplift SME economies in dozens of selected nations.
Two wheels of the same cart: Silence on such matters is not a good sign. Address candidly; allow both mindsets to debate on how and why as the future becomes workless and how and why small medium business sectors can become the driving engine of new economic progress. Job seekers and job creators are two wheels of the same cart; right assembly will take us far on this economic growth passage. Face the new global age with new confidence. Let the nation witness leadership on mobilization of entrepreneurialism and see a tide of SME growth rise. The rest is easy.
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