The COVID-19 health crisis and associated lockdown has thrown into plain view the fragility of existing systems, from healthcare and governance, to the gig economy and global markets. With people confined to their homes and restricted mobility, cities are working to not only manage and contain the spread of the disease but also ensure a consistent, efficient and reliable supply of basic services. While the struggles of providing equal access to efficient and reliable basic services is not new to Urban Local Bodies (ULBs) in India, limiting contagion and avoiding secondary health impacts has added another dimension to the design of service delivery. In the absence of clear datasets, several ULBs have partnered with tech-based enterprises to manage the delivery of essentials. These newly forged relationships should then be solidified as public agencies build back their systems.
MSMEs’ role in public service delivery
With limited resources and procedural barriers to contend with, cities have been strapped in trying to meet infrastructure needs. In recent years, a growing body of domestic startups and Micro and Small and Medium Enterprises (MSMEs) have been working to support and supplement the government’s efforts in service delivery using innovation to address the gaps in resources and processes. Several SMEs have been effectively applying technology towards resource management, treatment and measurement of demand and consumption of water, as well as effectively treating and recovering wastewater to bring efficiencies. In the energy space, startups have applied artificial intelligence/machine learning, towards measuring demand and increasing efficiency of energy consumption and appliances.
However, despite the obvious need and potential use for these services during the lockdown, many SMEs have been unable to bring clarity to their narrative to qualify them as obvious “essential services”. This has led most of them to either close or limit operations during the lockdown.
Much like their larger counterparts, the MSMEs in this space essentially constitute three main types: those who qualify as essential services, those that have repurposed their businesses for COVID-19 related use and those who are unable to do either.
Enterprises who qualify as essential services have had to adapt to the lockdown quickly, finding ways to protect their employees from contagion, and scale their services rapidly. Other enterprises have been able to pivot to adapt and repurpose their businesses to find use during the lockdown. For example, a Pune-based robotics company has incorporated a sample collection and COVID-19 testing protocol to their water pipeline assessment solution. Businesses having no opportunity to scale or adapt to the lockdown, are using this time to shore up—ensure financial security, upskill employees, and engage customers for future sales.
A time for introspection
Using the lockdown for introspection and reassessment of purpose need not only be an exercise limited to enterprises. For many of the stakeholders they engage, this downtime offers an opportunity to closely inspect existing systems and ways of doing business, note the vulnerabilities and find better ways to address them.
Consumers: Social businesses have shown an ability to address gaps, with their local supply chains, and offer decentralized and more impactful support to communities. Waste management enterprises that have close ties to the waste-picker community, have also been able to support them by providing meals, rations and personal protective equipment. Given the potential risk of contamination in waste management services, it is time for consumers to make concerted efforts at proper segregation and disposal of waste to ensure the safety and dignity of waste-pickers. Moreover, with cost-cutting being a major concern for many who have had to take pay cuts or job losses, looking at ways to reduce living expenses, including through water and electricity bills, should nudge consumers to rethink their habits.
Investors: For impact investors, it might be time to revisit their definition of “impact”, which in recent years has seen the use of more conventional metrics to guide investments. For instance, angel investor Nagaraja Prakasam believes the visible evidence of impact during the lockdown should either help existing investors reorient their investment strategies or bring in new investors motivated by these impact narratives. He is also encouraging enterprises in the space to aggressively pursue investment now by emphasizing their narratives of sustainability, dignity and livelihoods for communities, particularly blue-collar workers, and capitalize on the attention being awarded to these services and products currently.
Government: Finally, government can do a lot more to support the MSMEs in their ability to provide employment. Thus far, most MSMEs don’t meet the qualification requirements for the COVID-19 Startup Assistance scheme offered by the Small Industries Development Bank of India (SIDBI). They would benefit from assistance paying salaries, as being provided by some international governments like the United Kingdom and Netherlands. Additionally, using the existing online payments and identification infrastructure, the government could easily be more effective in directing the stimulus expenditure.
According to Vignesh Nandakumar, partner at the impact investment firm Lightstone Aspada, the time is ripe for government to transition from carbon-intensive industry towards a more sustainability-oriented economy. With oil prices at an unusual low, there are funds available for infrastructure investment for sustainability and climate change adaptation.
Besides, the public sector needs to reassess their mandates and figure out gaps so they can accurately determine where enterprises can add the highest and best value and accordingly, help remove barriers (such as procurement and stringent regulations) easing the onboarding experience for them and helping them scale.
The good news is that despite the predicted economic slowdown, most social and environmental mission driven MSMEs are confident of their ability to not only stay afloat but be recognized as key in delivering essential services. Thus, self-assessment by the stakeholders, followed by action that is consistent with ensuring access to basic services would be a vital step in building back better.