Entrepreneurship in Times of Geopolitical and Economic Crises
As we emerge from the COVID-19 pandemic that began in early 2020, concerns are growing about how geopolitical conflicts in Ukraine and the Middle East, specifically in Palestine and Israel, might impact economic growth and entrepreneurship. It’s important to recognize that many crises, whether they are geopolitical, health-related, financial, or natural disasters, are often beyond the control of entrepreneurs. However, the actions and decisions made during and before a crisis can determine whether a business survives or faces a costly closure.
Undoubtedly, these are challenging times for entrepreneurs, innovators, and risk-takers across all sectors. The cost of capital is expected to remain high; market volatility will be influenced by conflicts in Ukraine and the Middle East, climate disruptions will disrupt supply chains, and tensions between China and the West will affect trade, supplies, and business continuity. All of these challenges compound the day-to-day difficulties faced by early-stage businesses.
Drawing lessons from the pandemic, entrepreneurs have demonstrated resilience and adaptability through digitalization and decentralization. They have repurposed their ventures and expertise to adjust to global “lockdowns” and provide relevant services to people at home. Similarly, in the current uncertain market, entrepreneurs play a crucial role in helping economies and consumers navigate crises by generating innovations for service delivery and promoting alternative ways of working and consuming. Consider how food, entertainment, and sports consumption have shifted toward tech-driven subscription services. Entrepreneurs will play a leading role in scaling new technology offerings, particularly in leisure, entertainment, and recreation. This is an area where the affluent world is spending at least $600 billion less per year since the pandemic, as they rely more on stay-at-home tech-driven services.
While there will be gains, there will also be pain. Some entrepreneurs may have to pivot or close their ventures, facing the stigma of business failure or restructuring. For individual entrepreneurs, dealing with a crisis carries a personal psychological cost, but closing operations may be the smartest move if the cost of survival and recovery is prohibitively high. The…