Could COVID-19 Fuel The Next Wave Of Entrepreneurial Innovation?

Entrepreneurial Innovation

The COVID-19 situation has brought the world and its governments, economies, and businesses to a complete halt. But if you look closely, you’ll see hidden opportunities and entrepreneurial innovation between the chaos. 

For example, The Black Death in the 1300s in Europe resulted in breaking the long unjust feudal system and replacing it with a more advanced system in the form of an employment contract. Then there was the 100-year war between England and France.

This war brought, aside from unfortunate suffering and deaths, the innovation drive that drastically improved agricultural productivity and boosted the economy. 

With chaos comes opportunity

Turning to some recent events, the SARS pandemic of 2002-2004 paved the way for Ali Baba. This e-commerce company has today established itself as the forefront retailer in the whole of Asia. This growth resulted from humans’ deep fear of traveling and human contact, precisely what we are facing today due to COVID-19. 

Another event that paved the way for companies to shine amid darkness was the financial crisis of 2008. Startups like Airbnb and Uber took an opportunity, and the whole west side of the world looked at them as a new way of living, forcing people to start saving and sharing their assets in the form of renting out spare space in the house and carpooling with strangers going in the same direction. Even video games saw an opportunity in this crisis. Video games companies like Nexon in Asia and King in the west changed their paid business model to a free-to-play business model.

With COVID-19, we are already experiencing a shift in how consumers and businesses interact. Remote working is becoming a new norm and is being encouraged by both tech and non-tech companies around the globe. Most airlines are going through an immense loss and retail stores are going out of stock as there are no products on the market. Even though some of these changes are for a short period and will get back on their feet after the pandemic, some will face the heat for decades to come.

Three-way impact

Historically, the three spheres of biology, psychology, and economy have directly been affected by the global outbreak of pandemics. The coronavirus pandemic dropped DUI rates and fatal accidents due to the rise in remote working.

Let us now look at the effects of the pandemic on the three spheres above in more detail. Naturally, the biological effects have been immense and have hit the elderly section of society more significantly. Psychologically speaking, we have seen double negatives. Firstly, the unprecedented lockdown on humans has created low morale everywhere in the world and has increased isolation levels as global travel has been banned. Secondly, investors’ outlook on the stock market has come down, which has brought the world’s economies to their knees. Lastly, the unforeseen calamity has destroyed supply chains everywhere which would inadvertently reduce global GDP. 

Adapting to these grave circumstances, a business will require long-term model changes. We should expect to see costs of services and prices coming down in the recession following the psychological and economic effects. Ironically, it is because of the adverse consequences of the pandemic which bring about new entrepreneurial innovation and new business strategies as well. Startups and new business models are gaining traction at a high rate. The following three macro innovations will stay beyond the current COVID-19 world.  

Reliable supply chains

Global supply chains have traditionally been quite solid in reserving quality while keeping a low-cost profile. However, this pandemic has taught the world that the old system lacks resilience. For example, as China has scaled down production, we are seeing an immediate impact on global supply. Therefore, a systematic change in the models of distribution, third-party logistics, and the coordination and tracking of supplies is needed across the globe to match their demands. 

To this end, technological advancement in sectors such as 5G, robotics, the Internet of Things, and blockchain is required so that vendors can interlink and create a reliable and robust web of supply chains. Additionally, the involvement of self-driving cars and delivery drones will increase as e-commerce evolves. We can imagine companies such as Amazon and Ali Baba competing for these progressive changes in the supply chain in the years to come. 

A move towards digital bureaucracy 

This pandemic has undoubtedly changed the nature of governance in several nations. For example, South Korea had acted swiftly in terms of testing the majority of its population and tagging its citizens through smartphones which shielded others. And in Wuhan, China, we have seen the construction of a hospital at record speed. All these positive changes could have been implemented globally if more smart cities had existed. 

A study by the University of Glasgow revealed that only 27 out of 5,500 large cities are leading stringent changes to accommodate the current situation. Smart governments need to be developed to deal with future catastrophes. Companies such as Microsoft, Siemens, and Cisco will benefit from a paradigm shift towards digital governance. 

Digital mental health support

Wand morale of a team. Individually, the mental health of workers is also impacted. Work-from-home is the new normal. However, it is increasingly difficult to manage situations where group work is necessary. This also affects the productivity 

We see an increasing number of traditionally offline industries adapt and move online. Still, experts say we need a mix of online and offline presence to cover a diverse range of consumer needs and preferences. According to an article by CNBC, many entrepreneurs have also been turning to hypnotherapy to enhance their performance.

Kiri Purushottam, CTO of online shopping comparison site, Bag it Today, says, “Companies can no longer need to have an online or offline presence. To have success during and post-pandemic, consumers must be targeted through “omnichannel” retailing, and do everything in their power to gain a deeper understanding of their customers’ needs.”

A handful of companies are doing just this by adding a human touch to their digital model. A start-up by ex-google HR chief Laszlo Bock, Humu, and other tech companies such as Github and Automattic have capitalized on the current situation as they have a remote collaboration model of business. Other startups such as Braive and Moment Pebble are also fuelling this entrepreneurial innovation by working on mental health issues born out of isolation, and apps such as Ripple are also developing programs that can help.

COVID-19 Shopping

Photo by visuals on Unsplash

A new world

The outbreak of COVID-19 has pushed us all towards a new world order and has significantly impacted everyday life. Businesses, in particular, must learn to adapt to the changes while maintaining their workers’ health standards. Those that do will face the least amount of disturbance.  

The European strategy 

Key players worldwide have pooled their ideas and suggestions to help counter the adverse effects of this pandemic. Keeping such a spirit in mind, Mariya Gabriel hosted #EUvsVirus. This online event brought together 20,000 participants, including entrepreneurs, scholars, and businesses, where teams would compete against each other to find immediate solutions to the spread and adverse effects of COVID-19. Topics included health and life, business continuity, social and political developments, work-from-home, digital education, finance, etc. This Hackathon resulted in 2,000 solutions and ideas. 

The self-employed sector is one of the most affected professions right now. This is corroborated by United Nations International Labour Organization and OECD reports. There are reportedly 32 million self-employed professionals in Europe alone. A lack of policy covering these professionals pushes them to poverty. 

Several sectors, such as travel, restaurants and event organizations, etc., have been forced to downsize, and many freelancers have been laid off. This is due to the lack of demand which has affected the ability of the population to cover rent, food, and medicines.   

The next step in freelancing 

Although the freelance service sector has been severely hit in the private sector, there is still enormous scope for freelancers in the public sector if governments introduce the necessary support. With governmental and public offices swamped with information and requests, employees would be overwhelmed, and swiftly responding to all the problems would be challenging. 

Therefore, it is suggested that governments can use existing platforms for freelancers and use these self-employed professionals to reduce the workload. This could be beneficial for the government and give respite to the freelancers as they would be given employment. 

This solution could be trialed with one department using an existing digital platform through which freelancers can be engaged. 

Moving forward

#EUvsVirus was a tremendous success that brought professionals together to fight this pandemic. It is now time to take these solutions towards practicality. 117 projects selected by the jury of the Hackathon have been forwarded to the European Commission.

It is now imperative to work towards tackling large-scale problems through entrepreneurial innovation and creative thinking. Although some solutions have been implemented, there is a need for so much more.  

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