Start-ups and the economy in the wake of the pandemic
Start-ups are ventures that normally don’t have a complete business model. Inefficient adequate capital and resources make it difficult for these businesses to be successful. Angel investors, seed capital and crowdfunding are some methods for start-ups to raise enough capital to jumpstart their business. However, in the wake of the coronavirus crisis, start-ups and the economy have faced adverse repercussions.
Start-ups contribute to 20% of employment and create almost half of new jobs across OECD countries
At the start of the pandemic, 70% of start-ups had to terminate full-time employees.
More than 40% of start-ups fall under the ‘red zone’ with only enough funds for three months or less of basic operating activities.
Start-ups continued to play a crucial role in the economy during the pandemic. Innovative firms reacted rather quickly to the crisis, enabling them to endure the challenges they faced in the difficult time. However, most start-ups experienced significant threats as they grew more vulnerable to reduced market demands and disruptions in supply chains. The effects of inadequate funding multiplied during the crisis as investors gradually pulled out. Aspiring businesses were deterred from joining the global economy. With a reduced number of new firms, detrimental consequences were incurred on the economy and society. As a result, aggregate employment and innovation were affected by the loss of start-ups. The crisis undoubtedly created short- and long-term problems in the economy.
How businesses adapted to the crisis:
The pandemic prompted significant changes in the external business environment. To survive and remain relevant in the market, many businesses had to adapt to the pandemic. Innovation and alteration in operations, products and resources ensued following lockdown announcements. Hoping for a chance to survive in the economy, growth opportunities were reassessed to align with changing consumer habits.
Athena Security is one of the companies that successfully combatted the disruption in the economy. Athena Security was founded in 2017 to help with gun control and gun detection using AI technology. The start-up saw an opportunity and shifted its focus to thermal imaging to detect elevated body temperature. The technology detected over two thousand people per hour and monitored thermal temperature to prevent the spread of covid. By the end of the pandemic, Athena Security received $5.5 million USD in seed funding and the deal was backed by around 40 angel investors.
Although the pandemic caused many businesses to fail, it pushed companies to generate new ideas and modify operating activities to remain relevant. The critical changes that were implemented in firms like Athena Security proved to be beneficial to society as they contributed to the prevention of covid. Now that the pandemic is controlled, what will these companies do next?
How Enactus projects have been impacted?
Cards for a cause
With the COVID-19 lockdowns, there has been a popularisation of work from home and hybrid work models. This has definitely affected the use of public transportation and Myki cards. Furthermore, technology changes have reduced the need for a physical Myki card. Thus, Cards for a Cause is expanding its product line from just Myki stickers and ideating two new product ideas to better address the changing needs of consumers.
STINT
The pandemic truly exemplified some of the struggles international students faced in Australia, such as the limited support provided by universities, feelings of loneliness and isolation as well as an even more competitive job market. Thus, it helped to shape the different aspects in which STINT wanted to support international students and create a supportive community that helps enrich the student experience.
Enaccess Maps
We also recognise that some restaurants previously affected by COVID social distancing rules may be reaching higher capacities again, and thus our current reviews may not be reflective of its current accessibility. That’s why, Enaccess Maps is always encouraging reviews of restaurants, even if they have been reviewed before! If you have recently visited a restaurant, please leave a review with the button below!