Revising entrepreneurial action in response to exogenous shocks: Considering the COVID-19 pandemic

Abstract

With regards to the ongoing impact of the COVID-19 pandemic in the domain of entrepreneurship, we offer research-based evidence and associated insights focused on three perspectives (i.e., business planning, frugality, and emotional support) regarding entrepreneurial action under an exogenous shock. Beyond the initial emergency response that countries around the world have taken, we argue that it is time to revise entrepreneurial action guidance in such a context. Our aim is to highlight ways that entrepreneurs can take action in light of the current COVID-19 pandemic. We position our insights to be relevant to both researchers and practitioners coping with an unprecedented situation that has catastrophic consequences both economically and socially. 1. Research context The COVID-19 outbreak began with the first reporting of an unknown virus in December 2019. Within months, the outbreak had become a global crisis affecting the world both economically and socially. By March 2020, the World Health Organization (WHO) had declared the COVID-19 outbreak a pandemic. The absence of short-term medical responses to the virus (either as vaccines or treatments) has necessitated the use of lockdowns and social distancing restrictions as government tools to reduce the transmission of the virus across the population. However, the lockdowns (including, in some cases, the introduction of border controls and/or travel bans) have triggered an economic activity disruption that does not resemble any such prior demand or supply crisis. Beyond the temporal freeze of activity, there are growing concerns about the long-term effects originating with the need for lockdown protocol extensions (increasing its total duration and impact), as well as on the need to sustain behavioral rules such as social distancing to reduce the risk of new contagions. While the crisis affects all types of economic activity, the public support programs tend to prioritize and protect established organizations. And, unfortunately, the priority for the public institutions seems to be to reduce the risk of bankruptcies and destruction of * Corresponding author.

The Impact of COVID-19 on the Social Enterprise Sector

“…In regard to business planning, Giones et al (2020), assert that entrepreneurship during this time requires balancing resilience, while remaining open to new opportunities. The authors draw from research on frugality, business planning, and emotional support to outline strategies businesses may use to move forward.…”

COVID-19 and the importance of space in entrepreneurship research and policy

“…Indeed, from a spatial perspective, the COVID-19 crisis is a brutal, unprecedented interruption of the movement of people, resources and capital. Integration and tight coupling within global value chains has suddenly become a liability in many industries, perhaps most poignantly demonstrated in the disruption of supply chains for medical supplies, the near total collapse of the tourism industry and the impossibility of maintaining in-person transactions in the service sector (Giones et al, 2020; Pantano et al, 2020). Nowhere has this become more apparent than in the market valuations of gargantuan, globally operating digital enterprises (Phillips, 2020).…”

“…Also, local entrepreneurs and SMEs have turned their attention to supporting at-risk groups in their communities. Central to this small business and local community fight for survival is an entrepreneurial pivoting process involving an adaptation of business models and product and service offerings to meet fundamental changes in demand (Giones et al, 2020; Hampel et al, 2020; Morgan et al, 2020) by re-building local support structures to alleviate the social costs of the crisis (see also Bacq et al, 2020; Maritz et al, 2020).…”

Preparing future entrepreneurs: reflections about the COVID-19 impacts on the entrepreneurial potential of Brazilian students

“…Many businesses will fail and others will be created, reminding us of some aspects of the "creative destruction" concept (Schumpeter, 1942) Of course, the changes mentioned will vary from country to country, since several aspects influence them (Ratten, 2020b). The maturity of the entrepreneurial ecosystem will make evident the capacity of each nation to absorb the negative impacts, and this maturity level will indicate opportunities to be explored by entrepreneurs (Giones et al, 2020;Zahra, 2021). In the literature, the importance of support for entrepreneurs in crisis for the success of entrepreneurial activity is highlighted (Beliaeva et al, 2019;Noelia and Rosalia, 2020;Ratinho et al, 2020).…”