For the past several months, the onset and spread of the coronavirus pandemic have been wreaking havoc on a global scale, leaving few people unaffected. Governments all across the globe have been repeatedly tried and tested in their efforts to save their economies.
So far, more than 70% of start-ups were forced to terminate full-time employment contracts, while numerous entrepreneurial businesses have pivoted to meet the needs for goods and services borne out of this crisis.
Undoubtedly, a great number of ventures have suffered due to the pandemic. However, coronavirus has also influenced an increase in various entrepreneurial activities. Companies from all over the world and individuals alike are trying to come up with ideas to respond to existing and emerging needs not sufficiently addressed by their governments and institutions.
Government Support of High-Growth Start-Ups
Government support of industry is essential in any crisis. So, it was natural to see governments worldwide take action to support local ecosystems during the COVID-19 crisis. For example, Germany has created a tailored start-up rescue program, France has set up a €4 billion fund to support start-up liquidity, and the UK has launched a £1.25 billion rescue package as support for start-ups that drive innovation.
Some entrepreneurs and start-ups have been more opportunistic during the COVID-19 pandemic, redirecting their existing knowledge, skills, people, and networks to new, emerging needs. From producing and selling masks to local taxi start-ups turning into personal drivers for medical workers or becoming grocery delivery companies, many had to reorient their businesses towards such innovative ideas in order to survive and adapt to the ‘new normal.’
Nevertheless, this repurposing approach is not without its challenges. Many of these entrepreneurs come from various fields, which poses a problem for those who want to work with them. How can these start-ups be trusted without a previous reputation in a specific domain?
While most start-ups see repurposing as an opportunity or a short-term solution, it remains a valuable survival strategy and an excellent chance for economic growth. However, to take advantage of such potential, governments should develop appropriate measures to support this kind of entrepreneurship.
The changes we see today are a double-edged sword. Some will argue that the crisis will negatively impact the risks associated with entrepreneurship and prevent start-ups from attracting the right talent; others will say that these changes can alter perceptions of entrepreneurship for the better.
In recent years, entrepreneurship was associated with high-tech start-ups for a select few with a network, funding, and the right type of education. However, what we see today is slow but steady democratization of entrepreneurship and great opportunities for many people to start their own businesses.
While so many companies failed or will fail due to the crisis, we have also seen the rise of new entrepreneurial activities. For savvy entrepreneurs, the current economic downturn can actually be a great business opportunity. If you need help in shaking up an entrepreneurial tree, feel free to contact us!