• International Journal of Technology (IJTech)
  • Vol 14, No 5 (2023)

Role of Risk Management and Standardization for supporting Innovation in New Normal based on Lessons Learned during Pandemic COVID-19

Role of Risk Management and Standardization for supporting Innovation in New Normal based on Lessons Learned during Pandemic COVID-19

Title: Role of Risk Management and Standardization for supporting Innovation in New Normal based on Lessons Learned during Pandemic COVID-19
Bambang Prasetya, Yopi, Biatna Dulbert Tampubolon

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Cite this article as:
Prasetya, B., Yopi, Tampubolon, B.D., 2023. Role of Risk Management and Standardization for supporting Innovation in New Normal based on Lessons Learned during Pandemic COVID-19. International Journal of Technology. Volume 14(5), pp. 954-971

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Bambang Prasetya Research Center for Testing Technology and Standard, National Research and Innovation Agency (BRIN), Gdg 417, BJ Habibie Science and Technology Park, PUSPIPTEK, Setu, South Tangerang, Banten, 15314,
Yopi Deputyship of BRIDA, National Research and Innovation Agency (BRIN), Jl. MH Thamrin 8, Jakarta 10340, Indonesia
Biatna Dulbert Tampubolon 1. Research Center for Testing Technology and Standard, National Research and Innovation Agency (BRIN), Gdg 417, BJ Habibie Science and Technology Park, PUSPIPTEK, Setu, South Tangerang, Banten, 153
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Abstract
Role of Risk Management and Standardization for supporting Innovation in New Normal based on Lessons Learned during Pandemic COVID-19

COVID-19, which hit all countries in the world at the end of 2019, has disrupted various aspects of life, social, economic, and work model in organizations such as government organizations, private organizations, and businesses. In terms of a supply chain, the various activities are production, processing, distribution, and consumption. Many efforts have done to overcome this situation, not only to combat the pandemic its selves but also to the resulting impact in the short-term, middle-term, and long-term, national-wide or locally. In the course of time, there are still a lot of risks that must be well managed and mitigated properly. On the other hand, there are also opportunities to open innovation based on the lesson learned from the COVID-19 pandemic. This paper describes the role of risk management and standardization in supporting innovation in the new normal based on lessons learned during the COVID-19 pandemic. Key factors affecting risk management and standardization on the innovation are identified and analyzed. Some recommendations for improvement based on risk management and standardization are also summarized. The method used in this review is descriptive-analytic based on literature studies from several scientific journals, and publications released by international organizations, associations, and government policies.

Innovation; Lesson learned; New normal; Risk management; Standardization

Introduction

Introduction 

    The multidimensional crisis caused by the Coronavirus (COVID-19) has caused vulnerabilities in various aspects of political, health, social, economic, industrial, educational, and other life. The dynamics of declining business performance, decreasing income at the community level, business people, increasing unemployment, and the potential risk of poverty for most of the population. Although in many countries, the impact of the pandemic and its magnitude is still not known with certainty. However, there has been definite progress in several countries, including Indonesia, from September 2021 until now.
    The development of the health crisis that impacts the social and economy at this time has forced several countries to change the strategic plans that have been previously set by adjusting emergency response policies that mobilize all resources in overcoming the Covid-19 pandemic. After several months of the emergency response period, the Indonesian government began to try to implement the new normal (new normal life). The risks the public sector faces in the new normal era are increasingly diverse. Protocols to prevent the spread of the virus are still enforced and continue to be encouraged in every public service procedure so that they can be implemented during normal situations. Because no country in the world has experience in dealing with pandemics, organizations in the form of companies or in the form of state/government institutions require referrals. Simultaneously, economic conditions, especially businesses including Small and Medium-sized Enterprises (SMEs), must be ensured to be recovered. To achieve this goal, implementing risk management and several standards to support innovation in the new normal will be significant. There are many publications reported on the identification of risks affected by the dynamic of the pandemic, including post-pandemic (Reis et al., 2021). However, risk identification and assessment followed by continuous improvement in systematic recovery from pandemics based on comparable platforms such as international standards are still lacking. Siegel (2021) reported on a dynamic risk-based approach to managing a pandemic and suggested a need to revisit risk assessments and business impact analyses, the assumptions and time frames on which they are based, and the plans that they have generated (In this review will report the role of risk management and standardization based international standard for supporting innovation in new normal based on lesson learned during pandemic COVID-19. The method uses description analysis based on secondary data from a series of publications from scientific journals, government policy, and business actor publications.


Literature Review
        Corona-virus-disease 2019 (COVID-19), according to ICTV (the International Committee on Taxonomy of Viruses), is categorized as severe acute respiratory syndrome  coronavirus 2 (SARS-CoV-2). Scientific and clinical evidence is evolving on the sub-acute and long-term effects of COVID-19, which can affect multiple organ systems (Dong, Du, and Gardner, 2020; Carfie, Bernabei, and Landi, 2020). The speed of the spread of the COVID-19 pandemic so fast indicates that the characteristics and dynamics of the Corona Virus are different from previous viruses. The potential of mutation depends on many factors, such as physical conditions (humidity, temperature, climate) and biological ecosystem. Indonesia belongs to a humid tropical country that can be a good habitat for various microorganisms, including viruses and their variants. The combination of geographical conditions, humidity, and air temperature can create opportunities for variations in micro-climate. The existence of periodization and relatively high intensity of the sunlight can cause virus mutations, so the opportunity for the emergence of various mutants or new variants is very large (Wang, Horby, and Hayden, 2020). In the history of pandemics affected by the virus, the fact shows that mutation of the virus leads to different health impacts (Nalbandian et al., 2021; Tang et al., 2020).

       Although each viral pandemic event has different characteristics, such as the 1918 flu pandemic and the 2003 SARS bird flu pandemic, the control is generally classified into several actions, each with a different level of risk. At the first level, the action taken is the use of Personal Protective Equipment (PPE). At this level, the use of masks, washing hands, and maintaining distance are important keys, and this is the initial stage of prevention. The next level is controlled with administrative control. At the stage in Indonesia, for example, the implementation of restrictions on movement and activities of people such as LSSR (Large-Scale Social Restrictions), setting office hours, Work from Home (WFH), and Work from an Office (WFO). Third, at the engineering controls level, control is carried out by providing infrastructure such as facilities for the isolation of infected people and provision of treatment facilities. At the fourth level, substitution is carried out; namely, the act of removing dangerous pathogens (hazard), and the fifth level is the elimination action which aims to eliminate the pathogen (AVMA, 2020).

       In evolving prevention action, the utilization of vaccines plays an important role. A considerable number of SARS-CoV-2 preventive vaccine projects were initiated shortly after the reporting of this virus, including technologies that generate inactivated virus vaccine, viral protein subunits vaccine, messenger RNA (mRNA) vaccine, DNA plasmid vaccine, and recombinant human adenovirus type 5 (rAd5) or simian adenovirus type 26 (rAd26) expressing SARS-COV-2 spike protein, a non-viral replicating vector expressing SARS-CoV-2 protein vaccine, and also replicating viral vector expressing SARS-CoV-2 protein vaccine. So far, there have been at least 30 announced vaccine projects globally, and vaccines derived from mRNA, expression using recombinant adenoviral vectors, and inactivated viruses have already gained regulatory approvals in certain countries (Folegatti et al., 2020; Jackson et al., 2020). Wang, Horby, and Hayden (2020) gave a systematic review of therapeutic development and application, including the following areas: epidemiology, virology, and pathogenesis, diagnosis, and use of artificial intelligence in assisting diagnosis, treatment, and vaccine development. A critical review of globalization and the outbreak of COVID-19 was reported by Farzanegan, Feizi, and Gholipour (2021). The transition from the pandemic to the endemic phase was analyzed by Biancolella et al. (2022).

       In terms of the supply chain, especially the food system, which can use as an indicator of people's behavior during the pandemic,  there has been special attention to food standards, application of established principles of environmental sanitation, personal hygiene, and food hygiene practices help reduce the possibility of harmful microorganisms that threaten the safe food supply, regardless of whether the food is sourced from intensive agriculture, is a small stakeholder (WHO, 2015). To date, all food industry organizations must strictly follow the Food Safety Management System (FSMS) protocol provided by the authorities based on the principles of Hazard Analysis Critical Control Points (HACCP) and must be continuously updated in response to new evidence of the virus when necessary (WHO, 2020). Moreover, the outbreak has pushed consumers out of their normal routines by adopting habits and behaviors many anticipate will continue in the long term. One trend is increasing awareness of smart and responsible consumption. Consumers are trying to limit food waste, shop more consciously, and buy more sustainable choices with minimal environmental impact (Kemenkeu, 2020; MLHR, 2020).

       To combat toward COVID-19 pandemic and to recover the economy, the Indonesia government delivered policies such as enabling the environment, improving productivity and enacting the job creation law. The first activity focused on improving the business climate, increasing competitiveness, and economic resilience through food, energy, and infrastructure improvements. To increase productivity, it is focused on improving business sectors that have the potential to support the performance of the national economy, including the revitalization of manufacturing, and tourism development, as well as empowerment and formalization of micro, small and medium enterprises. As an effort to improve the regulation, the implementation and enforcement of job creation laws become one of the vehicles for harmonizing various laws and existing regulations. Standardization and conformity assessment play an important role in this harmonization. One of the most important aspects of the harmonization of regulations is the clustering of types of businesses providing goods and services based on the level of risk. The greater the risk, the more stringent regulations are carried out, for example, inspection, certification by third parties, distribution permits, etc., while for low-risk products, only self-declaration and registration are required (BSN, 2021; Kemenkeu, 2021).

       Even though uncertainties still vary in every country in the world, some plans must be prepared, including the incentives policies for investment and strengthening of trade both for the domestic and global markets. Policies for combating and preparing for a new normal in the post-pandemic era to support innovation based on lessons learned during pandemic synergies between government and stakeholders will endorse the possibility of creating opportunities for innovation, including incentive policy for supporting the digital platform (Zaremba, Kizys, and Aharone, 2021; Sheth, 2020). In line with this effort, risk management will play an important role. One important risk management used in several enterprises, organizations, and government institutions is ISO 31000: 2018 (ISO, 2021). Implementing risk management principles can help minimize the impacts of the COVID-19 pandemic and navigate the risks (and opportunities) associated with socio-enviro-economical change during the pandemic. According to UNIDO (2020), the role of standardization is very important in dealing with the COVID-19 pandemic. Standardization, including part of the quality infrastructure, helps reduce the negative impact of the pandemic crisis and ensures the provision of essential services. Quality infrastructure, where standardization and conformity assessments function to ensure the need for relevant standards, accurate measurements (metrology), guarantees reliable test results through accreditation. Risk management and standardization play an important role in innovating the new normal based on lessons learned during the pandemic (ISO, 2021; Muhyiddin and Nugroho, 2021; UNIDO, 2020).

Experimental Methods

        WHO introduced a guideline for doing a review to respond to a dynamic situation like the COVID-19 pandemic, which has become a pragmatic alternative to comprehensive systematic reviews (Tricco et al., 2017). In this review, some critical points must be considered, such as a need for a clear research protocol derived from a needs assessment and defining the scope. The approaches used for the study are screening and selection, data extraction, researcher experience, and available resources. In term of rapid reviews usually use a descriptive synthesis method rather than quantitative meta-analysis (King et al., 2022; Pluddemann et al., 2018).

      According to Tricco et al. (2020), there are eight steps: (1). question and scope, (2). literature search, (3). citation screening, (4). data abstraction, (5). methodological assessment, (6). synthesis, (7). dissemination, (8). updating and back to Step 1. The method used in this review is descriptive-analytic based on literature studies from several scientific journals, and publications released by international organizations, associations, and government policy. The collected empirical evidence and statistics have been compiled, validated, analyzed, assessed, and used for descriptive-narrative formulation and recommendation (Table 1).

Table 1 Research Stages and Methods



Figure 1 Research Design and Dissemination of Recommendation

       The formal legal method was used to analyze international instruments governing relations in the food supply and security field published by international organizations such as FAO, UNCTAD, ISO, and WHO. The government's strategies and policies in dealing with the pandemic, including economic recovery policies, are discussed. The dissemination of recommendations is illustrated as shown in Figure 1.



Results and Discussion

3.1. Socio-economical Dynamic and the Opportunity for the Innovation

        During the pandemic, there have been changes in the business process in education, transaction, trade, meeting, the supply chain model, and people's behavior. Some significant changes in Figure 2 are, among others: public awareness of health, concern for the environment, creative ideas of society, innovative packaging, healthy lifestyle, consumption of functional food, nutraceuticals, using E-commerce applications, online shopping, distant learning, teleconference-webinar, crisis governance, emerging non-thermal technology, biosecurity arrangements, traceability of food and products, concern on standardization and traceability. Based on this change and the lesson learned during the pandemic, it is open to the opportunity to make innovation in the new normal. Reflecting activities in the new normal will have a lot to do with the subject of optimizing the supply chain, mitigation of environmental impact, valorization of bio-resources, improving the consumer's health, reducing waste and foods loos, more protecting the consumer, more intensive digitalization through utilization internet of things, communication technology,  machine services, automation/robotics and other matters related to industry 4.0 and society 5.0  (Galanakis et al., 2021; Prasetya 2021; Asvial, Mayangsari, and Yudistriansyah 2021;  Yatmo et al., 2021; Candra, Ayudina, and Arashi, 2021; Agus et al., 2021).

Figure 2 Potential socio-dynamic change for innovation in the new normal time

      According to Contractor (2022), there are still many unpredictable socio-economic conditions and trends in the new era. Therefore, identification of Volatility, Uncertainty, Complexity, and Ambiguity (VUCA). In this situation, it is necessary to use more appropriate and advanced information to strengthen the interconnecting between the producer-processing-distribution-retailer- the consumer. At the same time, utilization and implementation of a safety-healthy protocol, clear regulation and public policies, and other requirements to build trust between society, consumers, industries, and regulators.   

        The pandemic prompted extraordinary interest in innovation, including calls to inspire, initiate and coordinate innovations beyond those already designed and implemented. Some of these initiatives were global or national in scope. The innovation is mostly very clear in developing a new product, service, process, and business model.  Available digital and information technology infrastructure affects the acceleration of change in a business model and service.

        The business model in several sectors, like education, trading, logistics, etc., developed rapidly. While innovation in the product consumes more time because the safety aspect and technical performance need a serial test to be completed with a standard or another requirement. In Indonesia, innovation during the pandemic focuses, in general, on the field of medical care. In order to support efforts to prevent, spread, transmit, and/or overcome the increasing outbreak of Corona Virus Disease 2019 (COVID-19) in Indonesia, the government, through the Ministry of Research and Technology/National Research and Innovation Agency, plays an active role in integrating, aligning, coordinating, and synergizing research and innovation programs to deal with the COVID-19 pandemic quickly. One of the efforts is to conduct research, development, assessment, and application activities relatively quickly. There are five technological innovation programs/groups from the COVID-19 Research and Innovation Consortium Team for the prevention of COVID-19, namely Prevention, Screening and Diagnostics, Medical Devices and Supporters, Drugs and Therapy, and Multi-centre clinical trials (BRIN, 2020).

        In terms of the global supply chain, about 30 percent of Indonesia's non-oil and gas imports come from China, which is the largest import. The dependence on industrial raw materials, which is unavailable during the pandemic, has hit various important industries. Based on this fact, using the local component or raw material to support national industry with a certain economic and technical feasibility adjustment is very reasonable. This will endorse the research and technology development to support the utilization of local potential. It is also recognized that the users, especially the manufacturing industry, still need time to adjust to their existing manufacturing processes and technical and economic feasibility. Another benefit of the effort to be self-sufficient in raw materials is the creation of new supply chains, business fields, and employment opportunities, and in the end, it can strengthen the national industrial structure. This condition will also invite global partnerships in research and innovation. These activities will also significantly drive all research centers and university and private sectors to contribute to research, development, and technical-economical assessment in various aspects of production, such as processes, manufacturing, testing, and new product development. To support this effort, it is necessary to analyze data related to industrial needs and data on the development of imports of raw materials. Based on the very valuable experience during the pandemic that the capability of domestic research and innovation can make remarkable innovations in health care in other sectors will also got a positive impact on accelerating economic recovery and strengthening national competitiveness and resiliency.

        The lessons learned by fellow pandemics can become the basis for new normal habits. In line with this, the omnibus Law, Law No. 11, the year 2020, Job Creation Law (Job Creation Law, UUCP) (MLHR, 2020). which have derivative regulations for implementing the Job Creation Law are 194 Ministerial/Agency Regulations, and 22 Ministerial/Institutional Regulations are directly related to the Online Single Submission (OSS) System. One of the important aspects of this system is risk-based assessment for providing business permit licensing. The innovation for this system is the change from permission-based to risk-based. This means that business licenses are grouped based on the level of business risk, and this level of risk determines the type of business license. The lower the business risk, the easier and faster the process. In this case, the role of standardization and conformity assessment play an important role (KAN, 2020).

        The Job Creation Law pays special attention to low-risk for Small & Medium-sized Enterprises (SMEs), which are more than 60 million SMEs. A single license in the form of a Business Identification Number (NIB) already includes the national standard (SNI) and also Halal Product Assurance Certification (SJPH) in terms of food-based products and or services. The business actors will be facilitated and fostered by government institutions, the National Standardization Agency (BSN) related to SNI, the Halal Product Guarantee Agency (BPJPH) related to SJPH, and sectoral public service Institutions. SMEs are very diverse and generally use the potential of local resources, which are relatively available in district areas. The assistance of fostering SMEs includes access to information sources, market information, regulations, places for consultation and assistance, capital incentives, capacity building in online use, use of digital-based technology for marketing, and communication with partners (Utama et al., 2021; Zutshi et al., 2021; Prasetya 2020).

3.2. The Role of Risk Management in Response to the COVID-19 Pandemic and the New Normal

        During the COVID-19 pandemic, a lot of enterprises, industries, companies, organizations, government institutions and universities use the basic principles of risk management to better make identification of risks and minimize the lasting negative impacts. One important thing is to predict unpredictable matters. To navigate the risks (and opportunities) associated with the pandemic, it is critical to first identify the risks. The exceptional circumstances surrounding COVID-19 may have brought to light risks that have not yet been considered. In order to accomplish this most effective identification of all kinds of risks such as operational, strategic, and financial. Factual and comprehensive information from many influences variables and from a large cross-section of stakeholders will be necessary to assess risk. This requires a supply chain analysis and assessment of the risks faced by vendors, manufacturers, suppliers, distributors, purchasers, and all organizations and stakeholders you interact with and rely upon. It is also highly significant to involve organizational risks associated with people or employees' conditions, such as health and safety, financial, legal, operational, etc.

        Risk management relies upon a holistic approach to identifying, analyzing, evaluating, and treating risk. Commitment and full endorsement from the top management are involved in gaining an optimal goal. Risk management also aims to achieve business continuation and ensure the business can survive a critical incident. It consists of a series of plans implemented over phases to shorten recovery time and mitigate the impact. The International Organization for Standardization (ISO) has issued versions or editions of ISO 31000, the initial version in 2009 and the second in 2018. ISO 31000: 2018 Standard defines the risk management process as coordinated activities to direct and control an organization concerning risk. It also defines a risk management framework as a set of components that provide the foundations and organizational arrangements for integrating, designing, implementing, evaluating, and improving risk management throughout the organization (ISO, 2020).

        ISO 31000 Standard gained broad acceptance in many countries and large corporations as it is practical and business-oriented, which can be used for the private sector or government institutions. This standard belongs to high-level structural (HLS), which in the implementation, can be integrated with other standards depending on the need of the organizations. In the pandemic and the new normal, this standard can be integrated with relevant standards such as ISO 90001, ISO 14001, ISO 37001, and ISO 22001 (UNIDO, 2020). ISO 31000 also attempts to harmonize risk management practices and tries to achieve the position as a global benchmark for risk management even though there are still some challenges to address (Almeida et al., 2019).

         ISO 31000 framework sets out the principles, a framework, and a process for the management of enterprise risk that applies to different types of organizations. It consists of three components: principles of managing risks, a framework for managing risks, and the process of managing risks. The relationship between the principles, framework, and process is independent. The principles are fundamental to effectively managing any risks and, therefore, need to be reflected in the other two elements. While the management framework provides the arrangements for risk management that will embed it throughout the organization at all levels. The risk management process should be a part of the business process and corporate culture and tailored to its needs and context. Furthermore, its universal characteristics make them applicable to any type of organization, public or private, large-size or small-size corporations (ISO, 2021; Choo and Goh, 2015). Figure 3 illustrates the interdependence between principles, framework, and process.