Executive Summary

• Aileen Ionescu-Somers, PhD, Executive Director, Global Entrepreneurship Monitor
• Anna Tarnawa, MA (Econ), MA (Banking/Finance), GEM Poland Team Lead and Polish Agency for Enterprise Development

Introduction: COVID-19, an Extraordinary State of Affairs

COVID-19 was initially reported to the World Health Organization (WHO) on 31 December 2019. It was declared a global health emergency on 30 January 2020 and a global pandemic on 11 March 2020.

During the first week of March 2020, the Global Entrepreneurship Monitor (GEM) consortium gathered in Miami, Florida to hold its Annual Meeting and 2019/20 Global Report Launch. GEM is the largest entrepreneurship-related research initiative worldwide that focuses on early-stage entrepreneurship. Travel/visa complications and the introduction of hand sanitizer around the conference venue on the second day of the conference were first indicators of looming changes to come. Upon returning to their countries, many conference participants faced a very different world from the one they had left, with hand sanitizers, gloves, masks, remote working and “social distancing” becoming part of daily life.

In rapid succession, we have witnessed the COVID-19 virus extend a vice-like grip on populations around the world, killing many, overwhelming health systems and generally changing the face of modern living in cities and communities everywhere. The immediate impact of a myriad of imposed behavioural changes and lockdowns around the world has led to dramatic transformations in the economic and social fabric of most countries. Some of these changes will be temporary, others permanent. Some national, state, provincial or city lockdowns are still ongoing as this report goes to press. People — whatever their background and expertise — report that they have never experienced anything quite like this crisis and its knock-on effects. We find ourselves in unfamiliar territory.

Our GEM consortium of some 300+ academic experts in entrepreneurship generally agree that, along with the 1918 Spanish flu, the Great Depression, the two world wars and the 2008–2009 Global Financial Crisis, COVID-19 is a “black swan” event of epic proportions that is dramatically changing the face of business and industry — indeed “life as we knew it” — around the globe. Most countries are still in the throes of what may yet prove to be the “early stages” of the pandemic; there is currently great uncertainty about how the current highly volatile situation will evolve. For example, is a second wave of infections imminent in fall/winter of 2020? Rarely have non-scientific or economic experts collected data with such intensity and concern.

Purpose and Relevance of Global Entrepreneurship Monitor

At GEM, data are our raison d’être, our purpose. We collect data to enable multidimensional analysis of the status of entrepreneurship in national economies across the world. GEM adopts a purely scientific approach, based on a rigorous methodology. Since 1999, we have collected data from entrepreneurs and experts in some 115 economies around the world with a view to establishing our yearly GEM Global Report: a state-of-the-art analysis of entrepreneurial perceptions and the conduciveness of entrepreneurship conditions in multiple economies. With over two decades of data at our disposal, 54 National Teams and about 200,000 interviews per year, we are well positioned to contribute to an understanding of the early effects of the COVID-19 pandemic on entrepreneurs and the national contexts within which they operate.

Our objective in this report is to present an early snapshot of the effects of the COVID-19 pandemic on entrepreneurs and entrepreneurship, fully cognisant of the fact that the situation is still changing daily and outcomes and impacts are still very much moving targets. For more than two decades, entrepreneurs — that is, SMEs (small and medium-sized enterprises), high-impact entrepreneurs and startups — have been centre stage of the public policy arena in most economies. Nevertheless, the outbreak of the COVID-19 pandemic has drawn even more attention towards entrepreneurship.

Being a reliable source of data, GEM research is highly valued by academics and researchers, as well as international organizations such as the OECD, the United Nations, the World Bank, the European Commission and the World Economic Forum. It is also invaluable to policymakers who for a few decades now have been struggling to design and implement policies supporting entrepreneurship that are evidence-based or -informed and, more recently, created in close cooperation with entrepreneurs. Thus, they need current information on entrepreneurship and the overall ecosystems within which they operate. GEM data can provide these insights. In this report, we provide guidance to policymakers on how to address the current overwhelming challenges related to value destruction in their countries and to stimulate entrepreneurship to support economic recovery.

Report Structure and Content

This report is divided into three parts. In this first part, we present a summary of takeaways from Parts 2 and 3. This allows us to present an early assessment of current and impending first impacts, summarize how policymakers have reacted thus far, and make a “midterm diagnosis” of their intended future strategies. We also show how the GEM Conceptual Framework is relevant to the situation we face today. We describe GEM’s survey tool for understanding the national context for entrepreneurship (the EFCs or Entrepreneurial Framework Conditions) and its relevance to policy decision making. We also provide some additional guidance for policymakers and explore early potential remedies.

Entrepreneurship will likely be a key component in economic recovery in the post-pandemic period. Policymakers will need credible hard data to make their decisions. Even though entrepreneurs might feel undeterred, policy decisions can make or break even the most ambitious among them. Therefore, policymakers need to be looking at the right data at the right time. This is important because, given the stranglehold that most economies currently find themselves in, policymakers are actively looking for immediate solutions. GEM research can help; as the old adage goes: “The early bird catches the worm.”

In Part 2, we present six chapters which look at early impact and consequences of the COVID-19 pandemic for entrepreneurs and policymakers in specific contexts. They are either country- specific (United States, UK and Canada) or present comparisons between countries within regions (for example, Latin America: Chile/Mexico; Asia: Japan/ Thailand; Europe: Spain/Italy). The content of these chapters draws on a number of GEM webinars that were held every two weeks from April to June 2020 to keep a finger on the pulse of the effects of the COVID-19 pandemic on entrepreneurship and policymaking. The webinars featured GEM researchers and focused on understanding early impact of the COVID-19 pandemic and subsequent lockdowns on entrepreneurs and on entrepreneurship contexts at a national level. The webinar panellists also discussed previous financial, pandemic and natural event catastrophe crises in national entrepreneurship contexts and the lessons that are applicable to the COVID-19 crisis. Policy action taken in these countries as a result of previous crises was benchmarked against the extraordinary circumstances and global reach of the COVID-19 pandemic. In other words, Part 2 of this report brings a deep understanding of national entrepreneurial dynamics as a result of the COVID-19 crisis.

Our GEM National Teams are at the front line when it comes to understanding the effects and impacts of the COVID-19 pandemic in their respective countries. In Part 3, we present a set of 54 “Economy Snapshots”, each reporting on three lines of enquiry:

• The immediate impact on entrepreneurs of the COVID-19 pandemic lockdowns;
• The immediate policy interventions that were taken by policymakers; and
• The economic and entrepreneurship policy outlook as countries move forward to economic recovery.

In the words of Stanford economist Paul Romer: “A crisis is a terrible thing to waste.” We can — and must — use the best of our experience and knowledge to ensure that we hardwire ourselves and our communities against continued invasion of this virus on livelihoods and lifestyles, but also to make society more resilient for an uncertain future where other pandemics may be forthcoming, where climate change increasingly becomes a harsher reality, and where resources will become scarcer. All of these scenarios will bring both risk and opportunity to entrepreneurs.

Impact on Entrepreneurs and the Entrepreneurship Context: The First Months of the Pandemic (January–July 2020)

The first tangible effect of lockdowns on economies was a hard-knock-on impact on key business sectors. As many economies ground to a halt, the airline industry, tourism and hospitality, the arts and entertainment (museums, theatre, cinemas), event management, construction, transport and many consumer products and services (such as personal care) were all grievously affected. They were first to suffer the consequences of the grounding of a vast mass of activity impacting consumers and of the limitations in travel within and between communities and countries. Despite the continued buoyancy of food retail, the agricultural industry was also hard hit in many countries. The curtailing of access to seasonal migratory labour and general disruption in global supply chains were contributing factors.

In Part 3 of this report, all of our GEM National Teams point to these still beleaguered sectors, while at the same time highlighting a host of sectors that actually benefited from the effects of the lockdowns. There are many. Food and pharmaceutical products — such as the core of “essential services” defined by most governments — survived and thrived. With a mass move to home deliveries, logistics also experienced a massive boost, but at the same time was somewhat overwhelmed by the new reality and hindered by supply chain disruption. In general, high-tech industries were relatively unscathed and actually thrived. Health tech took a leap forward as patients increasingly opted for teleconsultation, made more accessible by the crisis. Edtech benefited as universities and educational institutions moved online. Fintech profited as digital payment systems were prioritized both because of increases in home delivery and out of concerns for hygiene, with a mass move away from cash. E-administration took its “great leap forward” as public institutions moved online with the mammoth task of holding whole nations together during the pandemic. Home-based occupations such as video gaming, board games and even gardening meant that many companies in these spaces also benefited.

Because of the closing of kindergartens, nurseries and schools during the lockdown, coupled with very stringent re-entry measures and partial opening even post-lockdown, women entrepreneurs have shouldered a heavier burden as they cut their working time to look after their families and to take a greater role in supporting online education efforts. There are mixed views among employees about working remotely from home, which is probably an aspect of the lockdowns that will last well into the future. Parents with young families often found themselves less productive, while those with no children were enthused by the opportunity to cut out commuting time, save energy and costs and adopt a new virtual-world style of working. Companies have examined liabilities such as expensive real estate and are rethinking office space and use. At the same time, they will be concerned about the psychological effects of working from home, with loneliness, isolation, anxiety, stress and pressure to hustle almost 24/7 becoming new challenges for many of their employees.

Policy Interventions: The First Months of the Pandemic (January–July 2020)

We invited all our GEM National Teams to send us their individual “Economy Snapshot” of the observable negative and positive initial effects of the COVID-19 pandemic and policy reactions by governments. We also asked our teams — where possible, recognizing that it is still early days — to look into the crystal ball and predict a future for entrepreneurs and Entrepreneurship Framework Conditions based on what they have been observing. A total of 54 economies are represented in Part 3 of this report. These individual snapshots allow us to draw some general conclusions that will be helpful for policymakers moving forward, with particular regard to making sense of the entrepreneurship context for future decision-making.

We present evidence that all 54 national governments took emergency policy decisions and action as a result of the COVID-19 pandemic. Unprecedented amounts of state aid were channelled into propping up economies around the globe. There are both differences and similarities between countries, often depending on the wealth of their economies. Developing economies are especially compromised in their ability to face a crisis of any kind, but doubly so in the case of a pandemic owing to a lack of developed health and social security systems. And they may be triply compromised if they have “pre-existing conditions” such as problems with terrorism, corruption, social upheaval or national debt (Argentina, Burkina Faso and Chile being cases in point).

To an exceptionally large extent, apart from imposing lockdowns to protect citizens’ health and health systems from collapse, policymakers’ main emphasis has been on avoiding mass unemployment and the sort of downturn in consumption that would lead to a domino effect of business closures, job losses and mass hardship and poverty. In terms of immediate measures, governments favoured direct interventions such as extending deadlines for filing or paying taxes. Many developed and developing economies introduced stimulus packages to keep consumption going and thus businesses afloat during the crisis. The term “furloughing” entered the vernacular, with subsidized leave of absence or government-paid “work from home” schemes being introduced to assist employers in retaining their employees during lockdowns. As an example, 20% of workers in Europe’s five largest economies were furloughed using state aid during the lockdowns.

In contrast to previous financial and other crises, many governments chose to make direct payments to individuals to incentivize continued consumption, avoid early evictions and safeguard social systems. The scale of governmental intervention has thus also been much greater than any crisis in recent memory. Banks in some economies introduced major programs to lend money to large corporations at reduced rates. However, liquidity and access to funding — always a challenge for SMEs even pre-crisis — has paradoxically become an even greater challenge for entrepreneurs during the pandemic. Sources of funding for many entrepreneurs have dried up. There are currently not enough examples of policies that have been specifically developed to stimulate entrepreneurship under these special circumstances.

Future Economic and Policy Perspectives

At this early stage of what we hope will be the road to economic recovery untrammelled by a second wave of the COVID-19 virus, most of our 54 GEM National Teams point towards a continued urgent need for sufficiency and transparency in financial support mechanisms for entrepreneurs. Second, “communicate, communicate, communicate”, along with a call for a reduction in red tape, is the unambiguous message coming from our teams (this is particularly noticeable in developing economies). Third, efforts in developing countries to formalize the informal entrepreneurship community will go a long way to ensuring that numerous self-employed do not fall into a poverty that could well be permanent.

With the onset of pandemic effects, along with the usual public policy goals (such as innovation, internationalization or growth acceleration), national governments have focused on securing workplaces, assuring financial liquidity and incentivizing business model modifications. Ensuring the liquidity of entrepreneurs so that they can pay ongoing operational costs such as rental and wages, albeit at a reduced rate, is still a major priority. But policymakers need to be thinking further ahead. How can they hardwire entrepreneurship conditions so that they are more generally conducive to entrepreneurs moving beyond an idea and into early-stage entrepreneurship?

Clearly, the focus for entrepreneurs after the crisis will be accelerating further towards digitalization, managing liquidity to avoid bankruptcy, increasing sales and marketing efforts and reducing costs. Another message is “innovate, innovate, innovate”. There will be considerable longer-term effects owing to lower household incomes, which will decrease purchasing power and GDP even further and have a lag impact on indirectly affected industries and on liquidity for municipalities. All of these effects, naturally enough, will potentially deprive entrepreneurs and employees of their livelihoods.

The GEM Conceptual Framework and its Validity for Policy Action

FIGURE 1.1 Entrepreneurial phases and GEM entrepreneurship indicators Source: Bosma, N. et al. (2020). GEM 2019/2020 Global Report.

There is no doubt that entrepreneurs play a pivotal role in economic growth, and policymakers are highly aware of that fact. They also have a common understanding that institutional and legal frameworks affect the prevalence and productivity of entrepreneurship. However, there are other factors that are conducive to a healthy state of entrepreneurship and economic prosperity, and which policymakers need to consider. In this section, we offer our perspectives and learning based on the GEM approach to understanding entrepreneurship and its role in creating socio-economic development.

The GEM Conceptual Framework is a complex system of interrelated elements focused on an individual’s skills, motivations, attitudes and decision-making potential about whether or not to engage in entrepreneurship. GEM defines entrepreneurial activity as “any attempt at new venture or new business creation, such as self-employment, a new business organization or the expansion of an existing business, by an individual, a team of individuals, or an established business”. Based on the GEM Adult Population Survey (APS) — a quantitative survey encompassing at least 2,000 interviews annually with adults (18–64 years) in each country — GEM monitors the entrepreneurial behaviours and social determinants of entrepreneurship in 50+ countries. This allows GEM National Teams to analyse data on entrepreneurship in a given country, not through the lens of registered economic entities and their results, but through the actual actions and attitudes exhibited in a given society. These data are of crucial importance to policymakers and all those interested in the phenomenon of entrepreneurship.

The collection of data at the individual level also means that, unlike other sources of data that are based on registered businesses, GEM is able to capture entrepreneurial activity at each developmental phase: from businesses that are nascent (people trying to organize their business; prior to formal registration), new (owners of businesses active from 3 to 42 months), or established (active longer than 42 months), to those who have decided to exit their businesses (Figure 1.1). Individuals who are either engaged in organizing their businesses or those who have been the owners of companies for up to 42 months are treated by GEM as early-stage entrepreneurs, making up what we refer to as the TEA rate (indicator of Total early-stage Entrepreneurial Activity) which allows us to project the intensity of business activity in a society (for definitions of GEM indicators, please refer to p. 194).

The GEM model acknowledges that entrepreneurial activity does not take place in isolation. It is shaped by a set of social, cultural, political and economic contextual factors that affect the national conditions for entrepreneurship: the Entrepreneurial Framework Conditions (EFCs). EFCs are composed of nine pillars that can stimulate economic activity or constrain it. Every year, GEM provides an annual assessment of EFCs in each economy participating in a given GEM research cycle. It is called the GEM National Experts Survey (NES) and requires input from at least 36 experts from each country, whose task is to assess whether the following conditions are supporting new and growing businesses:

1. Access to entrepreneurial finance. Are there sufficient funds available to new companies, from informal investment and bank loans to government grants and venture capital?

2. Government policy:

a. Support and relevance. Do government policies promote entrepreneurship and support those starting a new business venture?

b. Taxes and bureaucracy. Are business taxes and fees affordable for the new enterprise? Are rules and regulations easy to manage, or an undue burden on the new business?

3. Government entrepreneurship programs. Are quality support programs available to the new entrepreneur at local, regional and national levels?

4. Entrepreneurship education:

a. During schooling. Are schools introducing ideas of entrepreneurship and instilling students with entrepreneurial values such as enquiry, opportunity recognition and creativity?

b. Post-schooling. Do colleges, universities and business schools offer effective courses in entrepreneurial subjects, alongside practical training in how to start a business?

5. Research and development transfers. To what extent can research findings, including from universities and research centres, be translated into commercial ventures?

6. Commercial and professional infrastructure. Does access to affordable professional services such as lawyers and accountants support the new venture, within a framework of property rights?

7. Ease of entry:

a. Market dynamics. Are there free, open and growing markets where no large businesses control entry or prices?

b. Market burdens and regulations. Do regulations facilitate, rather than restrict, entry?

8. Physical infrastructure. To what extent are physical infrastructures, such as roads, Internet access and speed, the cost and availability of physical spaces and such like, adequate and accessible to entrepreneurs?

9. Social and cultural norms. Does national culture stifle or encourage and celebrate entrepreneurship, including through the provision of role models and mentors, as well as social support for risk-taking?6

Each of these EFCs can be analysed individually and compared between countries. However, if assessed collectively, almost as a diagnostic toolset, they can serve the “patient” better. Since 2018, GEM has been offering the National Entrepreneurship Context Index (NECI), a composite index representing in one figure the average state of the Entrepreneurship Framework Conditions in a given country. Overall NECI rankings and scores for all the participating economies are available in GEM Global Reports (http://www.gemconsortium.org). To see which countries score highest and lowest on the NECI, Figure 1.2 presents the 2019 NECI (thus pre-COVID-19) for 54 economies.

To the right of Figure 1.3 in the GEM Conceptual Framework, there is another underlying assumption that hypothesizes that entrepreneurship is subject to social values. There is no doubt that, since all individuals are part of society, the process of deciding to start and develop one’s own business activity is rooted in that same society.

Therefore, GEM monitors the social perception of entrepreneurship by verifying the following:

• Whether our survey participants already know any entrepreneurs (also indicating whether they have access to peers and mentors);
• Whether they think that running one’s own business is a good way to make a living; and
• Whether they agree that those who achieved success in running their own business deserve respect and recognition.

Entrepreneurial activity is also a function of characteristics that are dependent on the individual, such as:

• Demographics: age, gender;
• Psychology: her/his entrepreneurial talent, self-assessment of entrepreneurial capabilities, level of fear of failure, perceived ease of starting business, ability to spot business opportunities and readiness to act on them;
• Motivation: for example, what is the driving force for early-stage entrepreneurs? Is it to make a difference in the world, build an extremely high income, continue a family tradition or earn a living because jobs are scarce?

Each of these characteristics provides much better insight into the entrepreneurship phenomenon and allows for various comparisons; for example:

• Understanding better why in most countries fewer women than men engage in entrepreneurship;
• Observing an increase in positive self-assessment of entrepreneurial capabilities over time (in the case of women or certain ethnic groups, for example);
• Realizing that startup entrepreneurs are not always young. In some countries, it is not uncommon to see middle-aged people setting up their first businesses after losing their corporate or public sector jobs.

Last but not least, we come to a core issue addressed by GEM: the outcome of entrepreneurship, meaning social and economic development. GEM highlights the importance of a dynamic entrepreneurship sector to national economic health, with high job aspirations, innovative and engaged in international export markets. We also focus on different types of entrepreneurial activity — early-stage (TEA), Established Business Ownership (EBO) and intrapreneurship (EEA; that is, initiating new undertakings for an employer, rather than on one’s own).

Taking an approach based on research and analysis of individuals, and not businesses, is characteristic of GEM; it provides better insight into the nature of the entrepreneurship process.

FIGURE 1.2 National Entrepreneurship Context Index (NECI) for 54 economies Source: GEM Adult Population Survey, 2019

FIGURE 1.3 The GEM Conceptual Framework Source: Bosma N. et al. (2020). GEM 2019/2020 Global Report.

It yields twofold results: first, it facilitates the analysis of the entrepreneurship process from a multidimensional perspective, e.g. identification of individuals with similar attitudes and characteristics; and, second, it provides an opportunity to discover more nuanced differences between countries, regions and even continents. This is because we obtain data not only about the levels of entrepreneurs in each country but also about their diverse attitudes and characteristics within certain distinct developmental phases of running a business activity.

In Part 3 of this report, each Economy Snapshot is accompanied by a spider chart, with a short explanation that outlines pre-COVID-19 pandemic strengths and weaknesses of the EFCs for the country in question. “Pre-existing conditions” — meaning the weaker aspects of the EFCs — are the areas that will require most focus by policymakers as they move to create optimal conditions for entrepreneurship in their countries. If they do, this will be reflected in a move up the post-COVID-19 NECI index.

Visioning a Post COVID-19 Future

As global lockdowns ease mid-2020, and as phasing back into what is termed a “new normal” begins, economies and governments are facing the biggest challenge they have ever known. The Economy Snapshots in Part 3 bear testament to the sheer challenge of the road ahead. The figures are daunting. Unemployment is projected to reach nearly 10% in OECD countries by the end of 2020, up from 5.3% at year-end 2019, and to go as high as 12% should a second pandemic wave hit. A jobs recovery is not expected until after 2021. Young people will confront a tougher-than-ever job market and deficiencies in education systems that could compromise their futures. Women and low-paid workers will likely face greater unemployment than others. Hard-hit sectors such as hospitality and catering, the part-time, temporary and self-employed workers that make up some 40–50% of the workforce, will continue to bear the brunt of the pandemic, and especially so in the case of a second wave.

China was also first to return to its “new normal” after having been the first economy hit by COVID-19 and then emerge from a lockdown. Economists estimate that China is currently functioning at only 90% of its former capacity, a situation expected to last for the foreseeable future. We see a vastly different China compared to the overheating and ebullient pre-crisis one. While a 90% economy is an undoubted achievement given the circumstances, it does mean that many Chinese entrepreneurs, particularly nascent, have faced or will be facing very hard times.

It is likely that the rest of the world will follow in China’s steps, with economies not moving back to being fully “pre-crisis” functional for an exceedingly long time to come. Our Economy Snapshots also indicate that the world is entering a prolonged recession. Already, unemployment is at its highest rate since the Great Depression in the United States, for example. Social distancing and the more careful choices that people are making — especially in their shopping, leisure and travel habits — mean that our economic and social context will still feel like a very different place from our pre-COVID-19 world. Our GEM teams estimate that economies will shrink between 5% and 10% and that, inevitably, waves of additional unemployment will kick in as government subsidizing ends. While it is too early to say whether the crisis we are experiencing will lead to a wave of Schumpeterian “creative destruction” of the current economic system, we have witnessed some dramatic consumer behaviour change and business shifts that show us that some changes are definitely here to stay.

For example, e-administration — the process of digitalization of public institutions — which went into overdrive during the pandemic, is almost definitely here to stay. Online education is also here to stay; many schools and universities are planning to offer multi-mode education experiences to their students in the future. This process will have to be accompanied by new solutions enhancing the quality of distance teaching and learning.

Pre-crisis, the world was already on a journey towards more distributed, coordinated and trackable supply chains using global platforms such as blockchain, 5G, robotics and so on. This will continue inexorably. However, the COVID-19 pandemic lockdowns have accelerated this journey and perhaps changed the nature of it to some extent. Governments thinking strategically will ensure that crucial supply chains (health and food provisions) become more local, so as to not put citizens at risk again under either a second wave of COVID-19 or a similar future crisis. While such “de-globalization” measures will disrupt the world trade system considerably, this is also an opportunity for local entrepreneurs.

Owing to lockdowns and remote working, digitalization accelerated significantly during the first six months of the pandemic. Masses of people moved to working from home. Remote working and online education are likely to become a permanent feature of our lives — again presenting opportunities for entrepreneurs. There are a lot of open questions. For example, what will permanent working from home do to employees’ mental health? How do teams evolve and thrive when almost entirely virtual? How do leaders lead? What will happen to office real estate? How will workplaces evolve? How do we compensate for education gaps caused by children and students staying at home for long periods with inadequate access to quality education? How will this influence the labour market? How will children and young people’s social needs be met? How will elderly people survive in a more virtual and potentially isolating world? There will be a host of multifaceted problems that can probably only be resolved by stakeholders working on them together.

“Digital bureaucracies” grew up during the pandemic, with smart apps for virus tracking and tracing introduced in many countries. Will the trend towards “smart cities” also accelerate to ensure that urban conglomerates are better armed for future crises? These questions will undoubtedly lead to opportunities for entrepreneurs and innovative minds. Looking forward, when economic difficulties coincide with maturing technologies, automation takes hold. The trend of employee replacement by technology has also accelerated to ensure companies’ own survival. Once this happens, there will be no going back. But, again, reskilling and upskilling the workforce will also present interesting new opportunities for entrepreneurs. Adaptability, digital and technology skills, data literacy, critical thinking (the ability to distinguish between fake and real news, for example), creativity and innovation and openness to new solutions are all skills that will be needed in the post-COVID-19 world. Continuous lifelong learning will be state-of-the-art. Again, these are opportunities for entrepreneurs.

What is certain is that businesses everywhere, in a forthcoming brave new post-COVID-19 world, will need to increase their capacity to adapt, improving their flexibility, resiliency and responsiveness. This is exactly where small-to- medium business owners’ strengths tend to lie. Conversely, large corporate entities find it much more difficult to adapt quickly: the difference between turning around the Titanic versus a small yacht with the wind in its sails. Perhaps in the post-COVID-19 era we will see entrepreneurs come into their own across the business landscape as never before.

We leave policymakers with a few CRISP principles:

• Clear and concise communication of policies is a must, if a maximum number of entrepreneurs are to benefit from policies favourable to entrepreneurship. Collaboration and cooperation with entrepreneurs, academics, hubs and other enabling organizations will be essential as all stakeholders seek value-adding partnerships and synergies to exchange knowledge and know-how.
• Responsibility and resilience will be assets to all organizations; the COVID-19 pandemic showed us just how important it is to work together for the common good.
• Innovating and celebrating innovation is the name of the game moving forward as entrepreneurs grasp opportunities.
• Simplifying policies is also important so that new entrants from the informal sector in particular will be able to navigate the new, formal business context that they have entered.
• Preparation, since policymakers would do well to spend time preparing for a potential — many say even likely — new wave of the pandemic.

GEM will continue to monitor rates of early- stage entrepreneurship across nations as well as intentions of entrepreneurs to start businesses and the reasons why entrepreneurs exit their ventures. This crucial information will feed into policymaking. As indicated, government should focus on the EFCs — creating a stable, supporting framework that is conducive to entrepreneurship, in which people will not lose their entrepreneurial spirit, where their fear of failure is reduced and where they can venture forward to establish and grow vibrant and profitable businesses. But, for this to happen, policymakers need to create a cohesive, holistic and conducive framework for their healthy development.

References

1 COVID-19 or Coronavirus Disease 2019 is a severe acute respiratory syndrome identified as the cause of an outbreak in Wuhan City, China.

2 A “black swan” is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Such events are characterized by their extreme rarity and severe impact.

3 https://www.gemconsortium.org/news

4 Paul Romer, the Stanford economist, said these words in November 2004 at a venture capital meeting in California. Romer was referring to rapidly increasing education levels and competition from countries outside of the United States. “A terrible thing to waste”. The New York Times Magazine, 31 July 2009.

5 Reynolds, P., Hay, M., & Camp, M. (1999). Global Entrepreneurship Monitor, 3.

6 Bosma, N. et al. (2020). GEM 2019/20 Global Report.

7 OECD (2020). Employment Outlook 2020. Facing the jobs crisis: COVID-19 is causing activity to collapse and unemployment to soar.

8 The Economist (2020). The 90% economy that lockdowns will leave behind, 30 April.

9 Kelly, J. (2020). US unemployment is at its highest rate since the great depression at 14.7% — with 20.5 million more jobs lost in April. Forbes, 8 May.

10 Salisbury, A.D. (2020). COVID-19 may become “an automation forcing event”: Already vulnerable workers look to reskilling for path forward. Forbes, 7 May.