How Will Covid-19 Impact the Next Generation of Entrepreneurs? Covid-19 has changed the way businesses operate and will most likely have long-term effects.
By Milan Kordestani •
Opinions expressed by Entrepreneur contributors are their own.
Covid-19 has fostered a wave of innovation, both positive and negative, in the world of entrepreneurship. Researchers and entrepreneurs dedicate their lives to create a future for consumers and organizations. Scientific studies, along with considerable risks that entrepreneurs take, are essential for ending the Covid-19 crisis and designing new techniques to adapt to a post-pandemic world.
Related: 5 Breakthrough Approaches to Hiring in the Covid-19 World
While entrepreneurs are optimistic and resilient, the pandemic will require them to shift their business approach for decades to come. Although some businesses may have plummeted, other elements surrounding the pandemic will build the next generation of entrepreneurs.
Economic decline
While Covid has drastically affected the elderly population, it has also shocked the global economy. Before Covid, there were 158 million Americans that were employed. Many people may not be actively seeking employment due to social distancing measures. Nonetheless, over 30 million Americans currently do not have a job.
Another economic issue we have seen over the past several months is the supply chain for goods and services. Most of our components come from China, where the flow of materials is significantly affected by the pandemic. A shortage of supplies has shocked our economy and may have long-term effects.
Businesses that took a hit due to Covid
Many large sectors have lost a major portion of their market value. Some of those companies include:
- Uber - Losing $2.9 billion since the start of Covid, the company has laid off 3,000 employees and has dropped its ride-sharing volume by 80%.
- Airbnb - According to Financial Times, Airbnb has had a 16% cut in market value from $31 billion to $26 billion. They have laid off roughly 1,900 employees and continue to struggle with circumstances around Covid.
- Victoria's Secret - Sales fell 46%, and the company announced they would close over 250 stores in the US and Canada. They reported about 850 layoffs.
Positive aspects of the economy during and post-Covid
Could there be positive outcomes for society and the business world during and post-Covid? Indeed, most of which is happening right before our eyes.
The need for people to remain connected is crucial during a time of crisis. Businesses around the world have come together to serve their community like never before. Despite physical distancing measures, entrepreneurs have discovered solutions to the issues surrounding the pandemic. Business leaders, researchers, and scientists have found a way to foster connectedness even through great tragedy.
Related: COVID-19 Will Fuel the Next Wave of Innovation
Distilleries have manufactured sanitizers for healthcare workers. Fashion designers have created personal protective equipment(PPE), such as gowns and masks. Individuals have organized fundraising sites for those who are struggling or out of a job. The outpour of cooperation and assistance since the start of the pandemic is nothing short of miraculous.
Remote work has become the new norm, allowing people to work from the comfort of their own home. The adaptability seen from organizations that managed to migrate to a virtual setup within a matter of days has been remarkable.
A push in technology has also provided a way to maintain social connectivity. Meetings have been replaced with virtual forms of communication, such as Skype and Zoom.
But, will the pandemic increase the rate of entrepreneurship? Karl Ulrich, a professor at Warton University of Pennsylvania and Vice Dean of Entrepreneurship & Innovation says, "Creative problem-solvers have jumped to help, and that certainly is an entrepreneurial impulse. And some of those efforts will result in business creation."
Sales in companies such as Uber Eats, Door Dash, and Chewy.com have skyrocketed, providing jobs for those who may be struggling. Other major technology companies such as Google, Apple, and Amazon have accelerated the use of online interfaces, also providing jobs to those who may be unemployed or looking for a second job.
Ultimately, young entrepreneurs today have been faced with a new reality that will shape them into resiliency. Successful companies like Airbnb, Slack, Venmo, and Square all originated as a result of the 2008 economic recession. Perhaps we will see the birth of more life-changing organizations due to our current pandemic.
The next generation of entrepreneurs
Entrepreneurs are people who recognize and act on opportunities to promote positive social change. The pandemic facilitated entirely new categories of business, some resulting in business creation altogether. Organizations that choose to capitalize on circumstantial changes will succeed, and the ones that don't will get disrupted.
Related: Best Practices for Marketing During and After COVID-19
Perhaps the most crucial role that entrepreneurs take during a crisis is that they signal a commitment to recovery and aspire to foster long-term sustainability for our community. What has happened during the pandemic will have lasting effects on society. However, the entrepreneurial initiative and dedication of scientists have sparked optimism worldwide and may construct the foundation for the next generation of entrepreneurs.
