Despite reports of labor shortages and business closures, the widespread impact of the pandemic on the economy has not been 100% negative. One of the positive results that has emerged over the past two years is a growing interest in entrepreneurship. Reports from the US Census Bureau indicate that the Great Resignation could represent a shift toward corporate activity.
The number of new business applications jumped over 500,000 in July 2020, and the most recent figure remains over 400,000. Startups have traditionally formed because someone sees an opportunity, and the pandemic has only exacerbated this phenomenon. New business ventures are largely driven by the demand for services and products related to health and well-being. Sectors like logistics have more gaps than existing companies can fill.
People don’t start businesses because they lack traditional opportunities. Instead, in the current economic climate, self-employment becomes a more favorable prospect than traditional choices. These and other changes show how emerging and startup entrepreneurs are reshaping the face of entrepreneurship.
Business owners are driven by adaptation
The ever-changing environment created by the pandemic underscores the need for adaptability. And that’s not the kind of flexibility that allows for slow changes or incremental advances. Entrepreneurs might invent a new concept, focus on a market prospect, or run an established business. Within days, this concept could take off with rising demand, or supply chain issues could make markets volatile.
Businesses that are already up and running may need to adapt overnight to new regulations or shifts in consumer sentiment. Following a five or even three year business plan is no longer the name of the game; adaptation to the current environment. For example, increasing outbreaks of new coronavirus variants may prompt consumers to hold back on in-person meetings and shopping, with obvious implications for restaurants and brick-and-mortar businesses.
Meanwhile, businesses that don’t rely on foot traffic to sell will continue to fill whatever demand is left. Even if consumers are reluctant to enter a retail store, the desire for products and services is not diminished. Companies that are willing to reorganize people, work tasks and business environments can respond to volatility more efficiently. Owners might even find that some changes around the technology can become permanent and expand their market reach.
Technology increases accessibility
The internet and technology in general have made it possible for almost anyone with an idea to start and market a business. Traditional storefronts and offices are not required to conduct business, increasing the potential for home-based entrepreneurship. The internet and its resources have also opened the door to self-employment through third-party services.
Provider platforms for services like personal shopping, ride bookings and pet sitting allow entrepreneurs to get their feet wet. Perhaps they don’t have the risk tolerance for a startup or would rather not invest in marketing a separate company. National and regional third-party platforms hiring self-employed contractors for a joint service lower the barriers to entry for self-employment. You can pursue entrepreneurship with less risk and still keep your job.
While some individuals go all out or eventually leave their employer, others become freelancers for non-competing platforms to pursue different interests. A person may enjoy being a financial professional but would like to pursue a lifelong interest in working with animals. Caring for other people’s pets allows them to achieve this goal and diversify their sources of income. Entrepreneurs launching web-based service platforms can also use technology to meet the needs of underserved communities.
Social responsibility concerns motivate business models
Concerns about climate change and socioeconomic inequalities drive the innovations and ideas behind startups. However, it is not just the private sector that is benefiting from entrepreneurs’ desire to make a difference. New businesses are also being formed in the not-for-profit sector, focused on helping underrepresented communities thrive.
Analysis performed by McKinsey shows that a transition to net-zero carbon emissions by 2050 will shift consumer demand towards a variety of products and services. Somewhat predictably, oil production will fall by 55% and gas production by 70%. Entrepreneurs are already moving forward to meet the demand for green energy sources and solutions that help mitigate climate change.
Examples include the development of construction processes and filter products that isolate or remove carbon dioxide from the environment. Other startups are using AI and robotics to develop pesticide-free farming solutions. Still others focus on providing renewable energy solutions for homeowners who don’t have access to conventional electricity. These developments reflect a desire to start a business with needs beyond profit or income.
New folds in an old fabric
Entrepreneurship has been the fabric of society for centuries. However, technology and pandemic-related uncertainty have made entrepreneurship and self-employment more attractive career options today. As established structures and systems become less viable, entrepreneurs recognize the value in adapting to constant change.
As a result, business models and structures are becoming increasingly flexible, often at short notice. The path to self-employment is also becoming more diverse as people embrace the reach of technology. No longer motivated by just a paycheck, workers are looking for meaning and purpose in their careers. And it’s business opportunities that fill that need.