Implications Of COVID-19 On Entrepreneurship and Innovation
This week our #WednesdayswithMDBinsight post features thoughts from Tehseen Rana, Research Analyst, about the entrepreneurial spirit in the midst of a global pandemic.
Entrepreneurs are at the heart of economic growth for a community. They play a vital role within our economy, creating jobs, innovative products, services, and solutions. Support often involves empowering and creating the infrastructure that enables growth from within the community. Support infrastructure can include research and development capacity building, business planning assistance, seed loans or grant programs, networks, mentorship, and access to capital, among others. This model has been increasingly central to economic development practice. Despite these efforts, the uncertainty caused by major macroeconomic crisis triggers such as the COVID-19 pandemic may (or may not) cause real concern for this segment of the economy.
COVID-19’s Impact on Entrepreneurs
In addition to grants and seed loans, private financing is the fuel that allows innovation to happen. With greater uncertainty comes greater risk for an investor which ultimately leads to a harder risk/reward pitch for an entrepreneur. If a company cannot find investors, it will have difficulty developing new software or prototypes. This is just one of many adverse factors caused by the pandemic that may leave start up companies struggling to survive.
That being said, there are several success stories that have come out of previous major macroeconomic crises. For example, the 2008 recession brought us well known companies such as Uber, Airbnb and Vancouver start up Slack. The 2003 SARS pandemic catalyzed the meteoric growth of Ali Baba which is now at the forefront of retail in Asia. These are prime examples of innovative entrepreneurial ventures that despite the macro economic environment found ways to provide value and fuel the next wave of innovation. A first glimpse of this innovative thinking is already being witnessed in communities across Canada during the COVID-19 pandemic.
Forcing Entrepreneurs (and Everyone Else) to Adapt
The current pandemic has revealed new needs and gaps to fill and start ups tend to be much faster at adapting and filling gaps than more established companies. Some new entrepreneurs and start ups have been opportunistic during the pandemic, pivoting their businesses and redirecting existing skills, knowledge, people and networks to new needs that have emerged. We have seen start ups and individuals producing and selling face masks and shields, and food delivery app companies providing their software expertise to help restaurants and other food services accept digital orders from their websites and social media accounts and introduce features such as contactless delivery.
A unique example of an innovative adaptation is Toronto based start up iMerve. Founded in 2014, iMerves BuzzClip was initially intended to be a wearable device that alerts people with visual impairments about obstacles directly in their path. Since the start of the pandemic the company has launched its new pedestrian navigation app, Manhood, which introduces a Social Distancing Mode to the Buzz Clip experience and uses historic pedestrian foot traffic data to advise users of busy streets. The app also incorporates voluntary survey tools to help track the spread of the virus.
Beyond entrepreneurs, the pandemic has caused almost everyone to adapt in some form. With the practice of social distancing, and with many who are able to work from home choosing to do so, one of the most notable impacts of COVID-19 has been the adoption of digital technology. Innovative platforms are among the most noteworthy examples of adapting to new conditions, and there is no doubt the speed of this tech adoption is helping to set precedent and lay the foundation for adoption of future innovation.
Fueling the Next Wave of Innovation
Some of the adaptation taking place includes direct, short-term responses to the crisis that will likely revert to pre-COVID activities once the virus is contained. On the other hand, individuals and businesses now have greater motivations and fewer perceived barriers to more actively seek technology-enabled solutions to assist in everyday tasks or operations. Accelerated tech adoptions may lead to continuing long-term digital disruption which is a great environment for innovation focused start ups tinkering with new technologies such as 5G, robotics, IoT and blockchain.
While many start ups may fail to survive this crisis, the pandemic has also given rise to entrepreneurial opportunities. The next wave of innovation is not only for the tech giants in Silicon Valley but also for small local start ups who are able to pivot their business model to provide value and take advantage of new opportunities. This is an important time to consider how economic development efforts can be utilized to turn the effects of the pandemic from a deterrent to the entrepreneurial spirit to a catalyst for local innovation.
To learn more about Tehseen and the other members of our team, go to https://mdbinsight.com/team-bios/
Our Wednesdays with MDB Insight posts feature the thinkers and doers on our team sharing ideas and talking about what’s important to us as professionals. We have very diverse backgrounds and a range of interests to share with you. We hope you’re enjoying these posts and that you will join the conversation with us and let us know what’s on your mind mid-week.