The Coronavirus Crisis: A Catalyst for Entrepreneurship

In combination, citizenship and resourcefulness can drive socially aware entrepreneurship.

Building Foundations for the Future
Actions during the crisis will shape firms in the long run.

First, the crisis creates opportunities for businesses to become more innovative. Facing external pressures, some business leaders are stepping out of their routines and comfort zones to become creative problem-solvers. Along the way, they rediscover their entrepreneurial spirit.

Some will continue to pursue opportunities first identified during the crisis. Perhaps some automotive suppliers will make medical equipment, while service providers integrate new online interfaces with their traditional businesses.

Second, reputations are built — and lost — during times of crisis. Companies demonstrating good citizenship by helping with shortages, or by making major donations, are also probably hoping that consumers will remember their actions when the economy returns to normal. What’s more, treating employees well during a time of hardship enhances a company’s reputation as an employer and helps attract talent as well as building a loyal workforce.

On the other hand, there are also a lot of opportunities to ruin a reputation. Companies that treat their employees or customers badly during a crisis will face major challenges rebuilding when the storm has passed. Similarly, if corporate behemoths like Amazon fail to provide reliable logistics solutions to small businesses right now, then others will develop competing platforms. Those new platforms will not only enable buyers and sellers to meet, but will also integrate service providers to transport products in a timely and reliable manner.

Technology Push
Beyond existing firms, some sectors of the economy are likely to grow. New technologies can offer numerous opportunities as the crisis transforms the products or services they can offer. Service businesses in particular are likely to see a lot of innovation in how services are created, packaged and sold.

Recent trends in China offer a glimpse of what is feasible for businesses. For example, online shopping and entertainment received a major boost during the coronavirus shutdown via online platforms like AlibabaWechat and their associated ecosystems.

In the health-care sectorhealth-related smartphone apps are proliferating in China — and possibly soon globally. Artificial intelligence is helping hospital emergency rooms, while virtual reality has moved from an entertainment tool to a valuable resource for technical training and maintenance.

Companies that become competent and move quickly in these areas during the crisis will have a strategic advantage over their competitors in the post-pandemic economy. For example, whoever builds the most reliable and speedy logistics infrastructure for delivering goods to private homes during the lockdown is likely to gain loyal customers.

Consumer Pull
Customers — both individual consumers and businesses — are becoming accustomed to new forms of business, such as online ordering for home delivery. Their established habits have been disrupted, changing attitudes and expectations. For example, the surge in video meetings creates comfort with this method of interaction, and users learn how to be effective in meetings without face-to-face interactions.

After the shutdown, many people will expect more integration of online and offline offerings. They will likely also be more at ease with using new technologies, especially video conferencing that can also reduce travel costs and carbon emissions.

It’s clear the post-pandemic future will be different. What’s happening during the crisis will have a lasting impact on society. Current signs of entrepreneurial initiative and goodwill give us some cause for optimism.

In the words of Stanford economist Paul Romer: “A crisis is a terrible thing to waste.”

Klaus Meyer is Professor of International Business, Ivey Business School, Western University; Carsten Lund Pedersen is Assistant Professor, Marketing, Copenhagen Business School; Thomas Ritter is Professor, Copenhagen Business School. This articleis published courtesy of The Conversation.