5 major effects of the COVID-19 crisis
Acceleration of digitalization, acceleration of e-learning, movement of some offline businesses in tomorrow’s online, decrease of tourism business and growth of local products consumption
“In any crisis, the following slogan is valid “cash is king”. Every entrepreneur should be careful with the liquidities and this is valid especially in periods preceding the crisis, because preparation for hard times does not take place during the storm. One has to permanently have in mind the idea that at some point things will turn around from positive towards negative”, is what Bogdan Herea, entrepreneur said in a remote discussion with Hotnews.ro and Starupcafe.ro. The 45 year old entrepreneur in Cluj-Napoca, who moved to France with a study scholarship and returned to Romania in 2005 spoke in the interview about the impact that coronavirus has on the companies that he is running.
“We need to mind the cash, as when it’s lacking we get into a zone where things can get blocked very quickly”, said Herea.
As for the effects of this crisis, Herea believes Covid-19 typhoon will lead to an acceleration of digitalization and automation, "that Yuval Harari also describes in his books", states Bogdan and adds: “When I say digitalization, I refer to one at an administrative, businesses and society levels.”
"We will see further acceleration of distance Education and part of today's offline will move to tomorrow's online. The way we do international business will change, which could be an advantage for Romania being an outsourcing country. We will probably see a decline in business traveling and the world will start consuming more on the local level and travel more locally", believes the Cluj-based entrepreneur.
Bogdan graduated in 1998, in France, at INSA Lyon, having a diploma in engineering. He worked as an engineer until 2005, when he decided to become an entrepreneur and founded his own IT company, PitechPlus. He is also cofounder of 2 startups, Umanlife and Twakoo and he is also president of French Business Club in Cluj. He was awarded “French entrepreneur of the year” in 2012.
In his opinion, in crisis moments entrepreneurs need to pay attention to the opportunities that the market offers you: “We will be more aggressive in terms of commercial development. We have a plan to bring new business in the company”, says Herea. The entrepreneur from Cluj also noticed the need to keep indirect costs under control.
We see a decrease in all companies' activity. Some domains are more damaged than others because the IT is a support-industry for other businesses.
"We have a good collaboration with banks and suppliers here in Transylvania", says Herea, admitting that some companies had been brutally hit by the crisis while others lesser.
"It's clear that we have a decrease in all companies' activity. Some domains are hit more than others because the IT is a support-industry for other businesses. And then, according to the fall or rise of the activity of some industries, we are suffering too. The most affected are companies with activities in the Travel and Hospitality domain", says Bogdan, adding that companies from the entertainment or streaming domains or even online education are still working very well.
"Personally I don't see things to be carefully measured and decisions to be made with the right intensity in Romania", says Herea. He signed a letter, together with many other entrepreneurs, to the President and the Government, where they requested an intense involvement and support in favor of the business environment. "The support needs to be made in the projects' perspective that has to be achieved as a country. Even if this is an unfortunate situation, opportunities are amazing. And I'm not talking only about the country's and society's digitalization but also about projects from the security defense area, investments in budgets towards local companies in order to develop technology...", the Cluj-based entrepreneur also believes.
The economical jam could end towards May this year.
Bogdan thinks that this economic slowdown might end in May this year, but Romania will have to come up with plans for any similar situation that could occur in the future.
"This necessary lockdown is brutal and suffocates the economy. Some European states have been completely unprepared for a pandemic event and things need to be better prepared in the light of a future pandemic - with equipment, with intensive treatment units, with protocols that allow us to take care of each other and not get infected. Technology can help us to protect ourselves and continue living while protecting everyone who has higher risk of getting sick. Rigorous mass testing is necessary, precisely to isolate the outbreaks. These are normal things that were done in more developed countries, trained for situations like this - Taiwan, Singapore.” said Bogdan Herea.
Find the article and video interview in romanian here: