Is forced entrepreneurship moving us into the age of coronavation?

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair…”

These words – which open Charles Dickens’ famous novel A Tale of Two Cities – were published more than 150 years ago, but they feel very relevant today. Maybe every generation would say the same, but I feel reality TV just tips the balance on foolishness and incredulity for us. And in a world still wracked by the fallout from COVID, our headlines have naturally seen their fair share of dispiriting news, which looks likely to continue for the foreseeable future.

But at the same time, we are seeing chinks of light in the darkness. Many existing business owners have proved their resourcefulness during the crisis by completely changing tack. Some of the more unusual moves include swapping making car parts and textiles for respirator masks, turning a supermarket into a warehouse for disinfecting PPE, and doing laundry for the elderly and vulnerable, rather than Airbnb hosts. 

As many commentators have noted, innovation has had a field day, a common response when times are tough. I came across just one example of this the other day when I had to stay in an airport hotel and met “JEEVES”, a service robot that brings you drinks and snacks in a COVID-compliant way.

Because of course there was no room service, and restaurants were closed, so the only solution was the robot dispenser. This is typical of the kinds of things now entering the mainstream – not because we were crying out for them before, but because they fill a gap in a cost-effective way. I have to say, I was a bit disappointed that JEEVES was not wearing a bow tie, but I enjoyed my Mars bar anyway.

With so many products and services moving online or becoming contact-free, the tech industry is on even more of a roll than before. But what might be more surprising is that business in general – or more specifically new business – also seems to be booming. In the United States, more than double the number of new business registrations (over 480,000) were made in April, compared to the same time last year, while the UK, France, Germany and Japan have also seen strong increases.

Where have all these newly established entrepreneurs and start-ups come from? In the same way JEEVES is meeting a new need rather than a burning desire, many of them have come into being not because their founders had a lifelong passion to run their own companies, but because they lost their jobs. This is something that is being referred to as “forced” or “necessity” entrepreneurship, and it is also a phenomenon associated with economic downturns.

So having been born out of adversity, should we expect these new kids on the block to fare worse than their “voluntary entrepreneur” counterparts?

Well, not necessarily. Many long-standing businesses, including General Motors, Burger King, and CNN, along with newer names like Dropbox, Uber and YouTube, were launched during periods of recession. In fact, a research paper published by the University of Indiana reveals that forced entrepreneur businesses are more likely to survive, innovate and receive venture backing. And with venture capital funding hitting an all-time record high of $125 billion in the first quarter of this year, it’s clear that the wheels of industry are turning quite nicely, despite the bad news we keep hearing.

Long may they continue. I for one would be very happy if this era of “coronavation” leads to more businesses succeeding - and keeping people employed - in the long run.

Photo credit: Noel Feans