Author: Constantin Măgdălina, Emerging Trends and Technologies Expert
Much could be expected from the year 2020 but not what we are experiencing now. Even if anticipated by many, the crisis did not look like this at all: a health crisis, followed by a systemic crisis.
In its initial version, 2020 was to be the year of the zenith of economic growth and prosperity: the allusion to the fulfillment of a round promise for the better. What we have, however, are macroeconomic imbalances, rescue plans, and support programs for companies and employees.
A. Company-level changes
It is difficult for a Romanian company to pass this test. And yet, if we take a closer look, decision-makers can take several response measures such as:
1. To carefully manage financial and human resources to maintain and even increase employee productivity. From this point of view, the adopted Kurzabeit model supports this measure because, for companies that reduce their employees' working hours, the state pays up to 75% of the difference between the initial salary and the one resulting from the reduction of the working hours.
2. To re-technologize the company by accessing the non-refundable European funds related to the Competitiveness Operational Program 2014–2020, in the amount of 1 billion euros. Non-refundable European funds are available in three forms: a) micro-grants for micro-enterprises in the form of a lump sum, b) working capital grants to the beneficiaries in the form of a lump sum and as a percentage of turnover, and c) grants for productive investments based on project evaluation submitted investment.
3. To apply online for emergency certificates (EC) by 15 September 2020 according to the new EC release session, which will allow them to obtain working capital grants from point 2.b.
4. To improve internal processes to generate efficiency and productivity. Optimizing resources is important and reallocating them to relevant action points produces results. In a company with better internal processes, there is an increased speed of reaction, as innovative ideas are applied at a faster pace, and communication channels and information circuits are shorter and simpler.
5. To access government support programs for companies, such as SME Invest, to provide liquidity for day-to-day business or investment. By accessing one or more loans for investments and/or one or more loans/lines of credit for working capital, guaranteed by FNGCIMM on behalf of the Romanian state, through the Ministry of Public Finance, decision-makers can ensure the continuation of activity, maintenance jobs or innovate.
B. Changes in mentality
This health crisis unlocks the mentalities stuck in predictability. For those who think it's a flying phenomenon and then after will return to their routine, it would be good to think again. Expectations about the future will be different. As they play an especially important role expectations about the future influence almost every transaction or economic decision.
Expectations about the future can lead an economy to prosperity or bankruptcy. Consumers who have formed the belief that the economic situation is a difficult one, with this installed belief build their future projection. Consequently, they will adopt resource-saving behaviors to prepare for what is to come.
From the perspective of declining consumption, companies will reduce investment and reduce production, which will lead to higher unemployment, lower wages, and an exacerbated decline in consumption. Stimulated by the survival instinct, these expectations generate the self-fulfilling prophecy of a crisis.
Along with the above concrete measures for companies and consumers, maintaining economic exchanges at least at a moderate level gives us all a chance to pass the test. Just as disaster anticipation the confidence in the future, as well, can be a self-fulfilling prophecy. It depends on each of us in which of the two we will invest more.
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About Constantin Măgdălina
Constantin Măgdălina has 10 years of working experience, while he performed in multinationals both in Romania and abroad. Constantin has a master’s degree in Marketing and Business Communication at the Academy of Economic Studies Bucharest. He is certified Lean Six Sigma and ITIL which provide him a good understanding of processes and transformations within organizations. The Chartered Institute of Marketing certification furthered on complemented his expertise and knowledge in business. In those over 4 years working activity in a Big4 company, he initiated and conducted studies which analyzed different aspects related to the business environment in Romania such as the economic growth predictions of companies in 2013-2016, knowledge management, the buying experience in the age of digital consumers, social media 2013-2015, the utilization of mobile devices in Romania. He is the author of numerous articles on topics related to innovation, the efficiency of business processes, social media, the consumers’ buying experience in the age of digital, trends and emergent technologies. He is invited as a speaker at numerous events and business conferences.