Answer:
In the face of the global COVID-19 pandemic, entrepreneurs have to face a new reality: that it is not only a huge sanitary and health crisis affecting millions, or even billions, of people across the world. This is also provoking an unprecedented downturn in the global economy.
What are the impacts of COVID-19 on entrepreneurship?
08 August 2020
Marie-France Derderian, Senior Lecturer and Director of our Master’s in Hospitality, Entrepreneurship and Innovation, investigates the potential impacts of the current crisis on one of the global economy’s greatest engines of growth: entrepreneurship.
In the face of the global COVID-19 pandemic, entrepreneurs have to face a new reality: that it is not only a huge sanitary and health crisis affecting millions, or even billions, of people across the world. This is also provoking an unprecedented downturn in the global economy.
The numbers are shattering. At the time of writing, France had recorded its biggest fall in GDP – 5.8% – since 1949 in the first quarter of this year. Meanwhile, in the USA, the numbers unemployed or underemployed have now passed 40 million. This reveals the breakability of our economies and their fundamentals.
If the world has quickly shifted under our eyes, the different scenarios and realities are not the same depending on where you are running your business today.
The government, public health and economic responses are hugely different if you are an entrepreneur based in USA or in Europe. As business founders, you will also need very different action plans in place depending on your sector and industry.
If you are in online shopping, food delivery, video gaming or video conferencing industries, where business is currently booming, it’s a completely different picture than if you are running a business in the hotel, restaurant, retail, entertainment, or sports industries.
Those entrepreneurs in COVID-impacted sectors should be ready to lose 50% to 80% of their turnover, as well as a major portion of their market value. For example, the urban mobility e-scooter start-up Lime, formerly a star company, has lost around 80% of its value. The company’s 2019 fundraising ($310m) established its valuation at $2.4 Billion. But by May this year a proposed investment by Uber valued the company at just $510m.
Explanation:
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