Impacts of COVID-19 on Future Entrepreneurship

COVID-19 has reshaped many things about the way we interact, resulting in a new normal. The lockdown policies to contain the pandemic have resulted in migration, remote work and unemployment. The pandemic has brought concern about the potential for survival and sustainability for entrepreneurs.

The pandemic has highlighted the importance of flexibility and problem solving. On a fundamental level, entrepreneurship is about solving problems and adding value to lives.

According to authors Gann and Dodgson (2020), “Some firms are repurposing their manufacturing processes from paints to hand sanitizers or from automobiles to ventilators.” This is a direct result of observing a new context and needs, and repurposing. The values of innovation are extremely relevant. 

One of the biggest impacts on global startups is in exercising adaptability, and rethinking intentions. All startups begin with an intention, to solve problems. Now, more than ever, entrepreneurs have had to cut down costs and translate any fixed costs to variable costs to restrategize. Due to job losses and limited investment funding, entrepreneurs have had to strategize and innovate to survive.  The importance of holding on to what is efficient, and essential has been realized. For example, taxi start-up companies repurposing services to food delivery, clothing companies manufacturing face masks and firms manufacturing sanitizers instead of paints. However, challenges of trust in companies’ knowledge and quality exist.

According to Cuyper, Kucukkeles and Reuben, “While most start-ups may see repurposing as a short-term opportunity or solution, it remains a fundamental survival strategy and growth opportunity”. Thus, COVID-19 has brought out the value in flexible business models. 

Published in the World Economic Forum (June 19th, 2020), “Discovering the real impact of COVID-19 on entrepreneurship” explores the key elements of the pandemic that play a role in changing entrepreneurship and the importance of these changes. It is argued that the perception of startups will change for the better and possibly for the worse. The authors also note that there may be more entrepreneurial behavior, due to less barriers to entry. 

According to the authors, while the effects on entrepreneurship are nuanced, how entrepreneurship changes today will have long lasting effects, especially on the perception of entrepreneurship as a potential career path in the future. 

These problems are worth solving, since they affect future generations entrepreneurs and how people navigate business. Throughout history, crises have been strong catalysts for change. For example, the Black Death resulted in labor scarcity, which resulted in innovation in agricultural technology (Voth, 2013).  It will be insightful to analyze the differences in business practices and entrepreneurship in the post COVID-19 world.

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References

De Cuyper, L., Kucukkeles, B., & Reuben, R. (2020). Discovering the real impact of COVID-19 on entrepreneurship. Retrieved from https://www.weforum.org/agenda/2020/06/how-covid-19-will-change-entrepreneurial-business/

Gann, D., & Dodgson, M. (2020). How universities and entrepreneurs can help end the COVID-19 crisis. Retrieved from https://www.weforum.org/agenda/2020/04/how-an-entrepreneurial-approach-can-help-end-the-covid-19-crisis/

Voigtländer, N., & Voth, H. (2013). The Three Horsemen of Riches: Plague, War, and Urbanization in Early Modern Europe.The Review of Economic Studies,80(2 (283)), 774-811. Retrieved from http://www.jstor.org/stable/43551502