Covid-19 has been ruthless in exposing the most vulnerable members of our population. At first, we assumed it was the elderly. However, as whole communities became exposed, it became clear that this was an over-simplification.
A report by the UK government’s Public Health England found that people belonging to the black, Asian, minority ethnic (BAME) communities are up to twice as likely to die of Covid-19 than those in white ethnic groups.
Ethnicity, though, has little to do with it. BAME communities often have frontline occupations. They are also more likely to live in deprived areas and thus be more exposed to the virus through factors such as public transport and multigenerational households.
The economic crisis now following in the wake of the pandemic is likely to be just as ruthless. The World Bank estimates it will widen inequalities within developed economies and push between 71 million and 100 million people into extreme poverty in developing economies.
This spiralling effect is worrying. A vaccine might make things even worse by dividing the world into those who can find and pay for it, and those who cannot. Unlocking investment to lift deprived and distressed communities is a no-brainer for those looking for alternative solutions.
At the moment, financial and physical investment is incredibly concentrated. Take venture capital: in 2019 alone, VC investment into US-based companies totalled $136.6bn, inspiring the envy of tech ecosystems elsewhere. As much as 85% of that monster investment went to just three urban areas: San Francisco, New York and Boston.
When it comes to foreign investment, our analysis suggests that half of the world’s top 100 FDI destinations had 40% or more of total projects concentrated in a single city. This tended to be in developing or small countries but they are not alone. In Japan, more than half of all FDI projects announced since 2003 went to Tokyo.
There are great talents and businesses away from traditional centres of investments that the market is failing to recognise. There may be good reasons for that (such as lack of infrastructure); there may not. Sometimes it boils down the simplest things.
“Meeting people is really at the core of what we do,” Anna Mason, who has been travelling around the US on the Rise of the Rest bus tour with US billionaire Steve Case, tells me.
Investment promotion agencies (IPAs) and economic development organisations play a vital role in creating the opportunity for those meetings. They are no panacea, but their contribution is substantial when it comes to raising the profile of communities and advocating to national authorities for better policies and resources.
The London School of Economics found that, on average, regional IPAs in less developed regions increase the probability of attracting foreign capital by up to 14%.
We like to think that Covid-19 exposed us all equally as a global community; the reality is that it exposed some more than others. And some of the most exposed people are also the least likely to have early access to any prospective vaccine.
Lifting deprived communities through investment – and in doing so, protecting them – is to me a more realistic ambition.
Jacopo Dettoni is the editor of fDi Magazine.
This article first appeared in the August - September edition of fDi Magazine. View a digital edition of the magazine here.