The Business Inside: Impact of COVID-19 on Entrepreneurship & the role of Tech Startups

The COVID-19 pandemic is going to last for the next 2-3 years. Even if the vaccine gets discovered, the world would be on high alert for the next 2-3 years. During the start of this pandemic, we all witnessed how severely it impacted our lives, businesses, work culture, etc.. There were plenty of positive and negative changes. Entrepreneurs have to face a harsh reality: “A virus not only can affect sanitary and health conditions, but also the global economy.”

Right now, the numbers may look stable, but in May, the world economy was brought to its knees. France recorded the biggest GDP fall of 5.8% since 1949. On the other hand, the USA broke all records of underemployed or unemployed people, crossing 40 million in numbers. It shows the breakability or our economy and its fundamentals.

So I ask you a question: “What have your plans if something similar, or much worse happens in the future?” Well, until you find the answer to this question, let’s take a look at how COVID-19 impacted the entrepreneurship globally.

Disruption in business models

From the last three months, we witnessed a lot of disruption in business models of various companies. Car manufacturing companies started to produce ventilators and PPE kits (for example, Hyundai), someone dealing in the e-Commerce business started selling groceries, educational institutes started online classes, and travel companies introduced virtual touring system.

You may agree on the fact that the reason behind all this disruption is COVID-19, and these transformations will continue to occur in the coming decades. The positive impact of such disruption is that it’s creating new jobs and business ideas. For those who are looking forward to becoming entrepreneurs have to bend their minds to keep learning and upskilling themselves. It’s necessary if they want to stay relevant in the future of this world.

Game of profit & loss

There’s a lot of difference between government, economic, and public health responses when you are a USA or Europe based entrepreneur. As a business owner, you should have every possible action plan in place based on the industry you are dealing with.

For example, during the global lockdown period, online grocery shopping, video gaming or conferencing, and food delivery industries were booming (and still are) as compared to hotels, restaurants, tourism, sports, or entertainment industries.  Those who had backup plans were able to cover-up the losses they suffered. But those who were doing business on their sheer-will have to shut-down permanently. We saw in the news also that multiple restaurants or hotels went bankrupt due to COVID-19.

Entrepreneurs lose over 50 to 80 percent of their turnover, along with their market value. But entrepreneurs like Elon Musk were able to overcome the crises because of the action plan. Companies like Airbnb have to cancel their plans of entering the stock market because of the coronavirus. According to Financial Times, Airbnb cut 16% from its potential market value, going down to $26 billion from $31 billion. They also laid-off around 1900 staff members (which is 25% of its workforce) to deal with the struggles of the downturn in business.

Some Positive Impacts

  • A report of January 2020 World Economic Forum, titled, Jobs of Tomorrow: Mapping Opportunity in the New Economy, says: “96 jobs in seven different professional clusters are the fastest emerging trends reflecting digital and human factors that will drive growth in the professions of tomorrow.”
  • The pandemic urged traditional business owners to invest in technology startups to push forward and ride the digital transformation,” says World Business Angels Investment Forum. Baybras Altuntas, WBAF Chairman, said in a webinar hosted by Software Park Thailand, under the National Science and Technology Agency: “Traditional money is transforming into smart money as traditional businesses are showing their interests to become angel investors.” The webinar was about the “Radical Changes to Entrepreneurial Financing in the Post-Pandemic Business Environment.”

Although entrepreneurs can analyze the changing global trends and identify the new problems that need solutions, they somehow lack the skillsets required to solve these problems. As an entrepreneur or aspiring to become one, you need to understand that these challenges will always exist in a myriad of ways. Take a look at the companies that didn’t exist before 2005:

  • Co-working spaces
  • Podcasts
  • YouTube
  • Hospitality
  • Mobility

And the jobs that didn’t exist before 2009:

  • App Developer
  • Driverless Car Engineer
  • YouTube Streamers
  • Social Media Managers
  • Podcast producers
  • Telemedicine doctor

Tech Startups in the post-COVID-19 era

In the post-COVID-19 period, tech startups will create a new pathway to smart cities, healthcare technology, online education, and financial technology. If you have already missed the .net and technology trend once, then don’t make the same mistake twice. Look forward to investing in digital infrastructure, including forging fintech, healthcare, smart cities, and enhanced internet speed.

These trends will support the digital transformation, greater financial inclusion, education opportunities, and a better healthcare system. Governmental bodies of various nations have already started making investments to upscale these trends. The ongoing pandemic is pushing every government to convert the cities into smart cities. Data collection and analysis will help city authorities in better monitoring and control. Following are some of the tech trends that will reshape our world in the post-COVID-10 era:

  • The Tech Entrepreneurs are working on facial recognition technology that will have body temperature checks. These techs can be deployed at airports, events, train stations, and concerts for better virus or infection control and security purpose.
  • Startups will use digital means to pitch, close deals, and monitor investments for raising funds from the public.
  • Pandemic already accelerated the digital transformation in various areas: from 5G infrastructure to Internet of Things cloud, and from Cybersecurity, and Automation to Robotics and Online platforms.
  • The government has to focus on local supply chains compared to global supply chains. Indian Government is a perfect example here. They imposed heavy taxes on Chinese products to support the local production and supply chain (procedure under development).
  • With the new digital transformation norms, virtual visits, online education, contactless services, healthcare, online food delivery, e-commerce and e-payment, and online entertainment services would on the rise.
  • The use of core tech, artificial intelligence, and machine learning applications in agricultural analysis and insight, as well as in disease diagnosis will also boom.

The tech startups have to find innovative solutions and discover new technologies to solve the big pain points. And as an investor or traditional business owner, you should think about investing in a tech startup. If you are aspiring to start your career in entrepreneurship, then search on the aging societies. In the coming future, there will be a rise in services to ensure that their quality of life may not suffer. Automation, technology, and assisted living are going to be primary factors to help them live better.

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