THE POTENTIAL ECONOMIC IMPACT OF COVID-19
According to McKinsey, even an optimistic outlook foresees a sharp fall in consumer and business spending until the end of Q2 due to large-scale quarantines, travel restrictions, and social-distancing measures. While the outbreak comes under control by the end of Q2 in this scenario, self-reinforcing dynamics of a recession kick-in and prolong the slump to the end of Q3.
In light of a delayed recovery or prolonged contraction, companies are responding to the outbreak with five main sets of actions:
- Workplace protection consisting of policy and management, encouraging two-way communication, and engaging with local public health officials.
- Supply-chain stabilization through inventory management, logistics optimization, and managing the supply and demand balance.
- Ensuring protection of consumers through customer engagement and promoting transparency through communications on updated corporate practices.
- Reviewing working capital requirements and economic outlooks through financial stress testing.
- Planning efficient use of resources through nerve-center integration and aligning leadership with issue mapping.
Nonetheless, many companies are finding it difficult to implement major actions. McKinsey highlights five common challenges faced by businesses today:
- Intellectual understanding is not the same as internalizing reality
- Employee safety is paramount, but mechanisms are ineffective
- Optimism about the return of demand is dangerous
- Assumptions across the enterprise are misaligned
- The near term is essential, but we shouldn’t lose focus on longer term
Learn more about the response structure and challenges faced by hundreds of companies around the world.
WILL THE MARSHALL ISLANDS LAUNCH THE FIRST STATE-BACKED DIGITAL CURRENCY?
Following extensive market research, the Republic of the Marshall Islands has selected the Algorand protocol as the base layer for their upcoming digital currency, the Marshallese Sovereign (the "SOV"). Algorand will provide the base technology to create, issue, and manage the SOV.
In February 2018, the Republic of the Marshall Islands passed a law making SOV the new legal tender of the Marshall Islands. A private permissioned version of the Algorand protocol will be implemented to give the Marshallese government and regulators sufficient oversight of the SOV. The SOV will be pegged to the U.S. dollar, the Marshall Islands' official currency, and inflation will be fixed to 4%.
SFB Technologies was selected as the technology provider to deliver the SOV initiative. The SOV is expected to launch later in 2020. Learn more about about the SOV and SOV Foundation.
FACING THE WORK-FROM-HOME (WFH) CHALLENGES
While business continuity plans and remote working are not new, unprecedented circumstances have now forced the majority of employees to WFH - many for the first time. A lack of preparation and planning has left companies with several WFH challenges:
- Lack of face-to-face interaction and limited communication channels
- Lack of access to information and longer response times
- Social isolation
- Distractions at home
While remote work can be fraught with obstacles, the Harvard Business Review outlines five relatively simple actions for managers to support their remote employees:
- Establish structured daily check-ins
- Provide several different communication technology options
- Establish "rules of engagement" and expectations
- Provide opportunities for remote social interaction
- Offer encouragement and emotional support
Learn more about effectively supporting employees from a distance.
