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Digital grassroots response to government bailouts

Restoring shuttered companies back to health may take more than state handouts. (Keystone / Laurent Gillieron)

The CHF60 billion Swiss state bailout of companies is well underway. But there is a feeling that government funds that hand out loans and pay workers’ wages will not be enough. How do companies maintain contact with customers and develop their brands during a lockdown?

The obvious solution is to embrace digital. The last few weeks has seen a number of digital platforms focus their efforts on small enterprises.

Wemakeitexternal link, a crowdfunding platform, has opened a “solidarity” channel to invite people to donate money to struggling fitness studios, photographers, musicians and concert venues. Small businesses have signed up to projects such as “4Switzerlandexternal link”, “Lokalheldenexternal link” (Local Heroes) and “Cheerstosupportexternal link” in search of donations or investments from local communities.

Another idea is for small businesses to issue electronic vouchers to loyal customers who buy goods and services in advance while giving firms a much-needed cash injection. These include the “Soziale Gutscheineexternal link” project and “Hamsterliexternal link”.

All these projects have a similar thread: support for local businesses is best generated from the bottom up (grassroots), and not top-down (from government handouts). Another theme is that restricted physical contact can be replaced by technology.

Perhaps the most ambitious project is the MAVN Allianceexternal link, a growing consortium of technology, finance, business and political actors. MAVN, which derives from a Yiddish word meaning expert or visionary, plans to act as a small business catalyst domestically and as a template for use in other countries. One of the goals in Switzerland is to connect together the various business boosting initiatives (such as those listed above) to give them more clout.

The idea was generated by the Swiss digital assets service provider Lykke Business. The open source platform plans to launch with a small business voucher-generating app that utilizes distributed ledger technology to keep track of payments. MAVN has attracted support from (among others)external link law firm Froriep, the Raiffeisen Bank small business incubator Rai Lab and the data communication services of energy provider Axpo.

The idea has also generated interest from outside of Switzerland. The Perm State University of Russia is a founding member of the alliance while entities in Germany, Turkey and Serbia have lent support.

The non-profit MAVN Alliance believes that actively helping small businesses to help themselves is a more credible way to support the economy than via state bailouts. The jury must surely be out on whether such ventures can match a CHF60 billion landslide of cash.

But there’s also the question of whether Covid-19 will drive digitization forward – be it in fintech operations or other areas. The digital response to the pandemic suggests that this notion may bear fruit.

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Matthew Allen
When not covering banks, tax disputes, trade, Brexit, the World Economic Forum and FIFA,'s business correspondent can be found playing cricket on various grounds in Switzerland - including the frozen lake of St Moritz. Initials: mga
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