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  • Writer's pictureS Zhao

How Multinationals can Leverage Social Innovations to Tackle COVID-19 Challenges

It would be an understatement to say that the COVID-19 pandemic has had a significant impact on social interactions. The way many businesses operated and interacted was forced to change dramatically. As we are now in the third year of the pandemic, it is the right time to analyse the social innovations that multinational companies have introduced in a bid to successfully address the challenges that the COVID-19 pandemic posed for them, as well as ask that most important of questions: how sustainable are these innovations in the long run?

My research has sought to assess how long the social and economic aftermath of the pandemic will last, whilst simultaneously analysing the impact that this will have on achieving Agenda 2030 and the sustainable development goals (SDGs) that it lays out.


The Impact of Vaccination Rates


The levels at which nations have been vaccinated vary considerably on a global scale. The vaccination rate in individuals living in low-income countries, and particularly those living in Africa, falls much lower when compared to the rest of the world. In Europe, for example, 73% of individuals have completed the initial vaccination protocol. In Asia, 71% of individuals have completed the initial vaccination protocol. In Africa, just 19% of individuals have completed the initial vaccination protocol. The COVID-19-related fatality rate has been higher in low-income countries than it has in high-income countries.

Evaluating the ways in which everyone, from governments to corporations, has approached the pandemic, and the measures that they have introduced to ensure they are not vulnerable to its impact and to build resilience to future shocks (whether health-related or otherwise) is the focus of this piece.


We know that multinational enterprises (MNEs) have had to diversify and innovate in response to the pandemic. Many of these have moved beyond their traditional profit-seeking approach to business in order to adapt their services, or their products, to better suit the needs of wider society as we work together to fight the health crisis posed by the coronavirus pandemic. Some of these MNEs have even committed to funding access to COVID-19 vaccines in those countries or communities where access is difficult or where access levels are low. But are these socially responsive MNE business models induced by the pandemic deliberately transitory in nature or can they, and should they, be sustained in the long term? Should MNEs be actively involved in social innovations, and if so, what role should they play?

Social Innovations Introduced by Multinational Enterprises to Mitigate the Impact of the Pandemic


Whilst each MNE has responded in their own unique way to the crisis, there are two main overarching approaches that the majority of MNEs seem to have adopted to ensure their continued success. On the one hand, they may utilise rationalising strategies. This tends to focus on leveraging their cross-border activities, assets and investments to maintain efficiency and to reduce negative economic impacts, ensuring that teams in multiple countries work in the best and most effective ways, for example. The alternative approach is to intensify their corporate philanthropy efforts in the most severely affected regions. This is the approach that is the focus of this piece: looking at the MNEs for whom the pandemic increased their corporate social responsibility and those who focused on increasing their social value rather than their profits during the pandemic. Examples of the philanthropy adopted by the MNEs using this approach include the donation of food, hospital supplies and equipment, cash gifts and collaborations with charitable organisations to help vulnerable groups.


It is important to note that, regardless of which approach businesses took to get through the pandemic, it has not had any significant impact on their business models, product portfolios or customer bases. But we do know that the pandemic may have, through necessity, changed the way in which many MNEs looked at social innovation and worked with the needs of the most vulnerable, even if those groups fell outside of their usual customer base.

MNEs were well-positioned to globally source materials and inputs that became scarce during the pandemic; they engaged in global collaborations for the common good, thinking of the needs of the wider public rather than purely of the profit margins it might bring. For many MNEs this was a seismic shift in both approach and values.


Working With Multinational Enterprises Beyond the Coronavirus Crisis


Now that the impact of the pandemic is lessening and in many countries ‘life as normal’ has resumed, how likely is it that the unprecedented efforts of MNEs observed during the pandemic to innovate their business models for social value creation can be sustained? Will we see increased social responsibility from MNEs or will ‘business as usual’ be resumed?

Answering these questions is difficult because it entails multifaceted processes to coordinate the actions of governments, international organisations and other stakeholders. Engaging in acts of social responsibility rarely boasts an immediate benefit over the company’s economic performance, which means investors and stakeholders must change their approach to profit and investment for this kind of increased social innovation to continue.


The pandemic-induced social innovation practices of MNEs and their subsidiaries were possible, in part, because they are resource-rich private sector actors that have the capabilities and cross-border networks to generate positive social impacts on a global scale. Could the mandate arising from SDG-17—revitalizing global partnerships for sustainable development be harnessed as the next challenge so that governments and other agencies can involve MNEs and their stakeholders more closely in the global agenda again?

Systematic efforts by various stakeholders could help create and nurture a close relationship between investments, business activities, government and development interests. Now is the time for MNEs to document their social innovation footprints and influence at all levels, in order to support the “business case” for MNEs to get involved and address grand development challenges. MNEs have the potential to assume an active role as social innovators who create social value by implementing existing or novel methods, processes and practices that can also be extended to other agents in the value chains in which they participate. Learn more about this topic by reading the full article here.



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