"Too important to fail" - in a crisis we see the value of business
The interest rate epidemic has sparked a debate that the social recovery should be linked to Finland's carbon-neutral goals and used as an opportunity to move towards a more sustainable society. In the midst of the economic crisis, we are also discovering the role of business in society and why it is important to listen to business in politics, even in normal circumstances. In a crisis, we can learn from both.
During the 2008 financial crisis in the US, some banks were found to be "too big to fail". It was feared that the failure of these banks would have too great an impact on the rest of society and the economy, so it was decided to bail them out with public money to protect the rest of society. Now, with interest rates, big support packages are being targeted at troubled economies around the world. If a large number of companies were allowed to fail, the quantity and quality of services would be radically reduced during the crisis, making the recovery of society more laborious, slow and costly later on.
People who are immediately affected by the crisis are those who lose their jobs or go bankrupt with their own businesses. But the people who suffer on the sidelines are all of us who use services in our daily lives. The crisis has shown that there is no such thing as a 'social enterprise'. All businesses are social enterprises, creating jobs, tax revenue and services ranging from transport to food and energy.
There has been much talk around the government's carbon neutrality targets about fair change, which means listening to and involving all parts of society in change. The current situation is helping to open our eyes to the role of business in society. If we want to safeguard the welfare society while making the transition to a carbon-neutral society, we need business and the economic contribution it can make. The innovation, investment and resilience needed for a carbon-neutral society can be achieved by listening to business in the decision-making process and using it as a channel for social renewal.
It is not realistic to expect the old players to disappear from the map and new players to emerge from nowhere and reform society at the same time. This is not always even a desirable scenario, as in the worst case the transition would be inefficient, costly and at the expense of individuals. Instead, in the process of reforming society, existing structures should be steered in a new direction in an orderly manner, using the tools at our disposal. Even in the current crisis, we will continue to see traditional businesses adapting to the changed environment and finding new ways of doing things, which will help to overcome difficult situations.
The social consensus to support businesses, generated by the interest rate crisis, is the result of the understanding that the functioning of our society and the smooth running of people's daily lives cannot exist in isolation from the conditions under which businesses operate. The Finnish private sector is "too important to fail", because our well-being depends on its vitality. Dealing with the crisis offers an opportunity to make the transition to a carbon-neutral society, but also teaches us for the future how important it is to support the business environment. For a carbon-neutral society and for climate change preparedness, this means actively involving businesses in the decision-making process so that the future crisis we know about today does not take us by surprise.
Lauri Korvenmaa
The author is a Blicin Brainee intern interested in the role of business in society.