The COVID-19 pandemic has posed a severe challenge to the business sphere, with many companies having to downsize or operate within a new environment with changing consumer needs. Due to the restructuring and shifting expectations surrounding business, there has been a spike in entrepreneurship, especially with workers being laid off and considering starting their own companies. From the macroeconomics standpoint, entrepreneurship has driven innovation, social transformation, and economic development. The activities and relationships created within the context of entrepreneurship are aimed at strengthening the activities of new business owners, which, in turn, creates unique entrepreneurial ecosystems that boost the economy. To explore the topic of increased entrepreneurship as a result of the pandemic, the Forbes article by Berkan Altun will be analyzed and embedded into the context of macroeconomics study.
In the article, the author mentions official statistics that show a boom in entrepreneurship in many countries worldwide as a result of the coronavirus pandemic. For instance, in the US only, the applications for starting up companies reached their all-time high in July 2020, with 551,657 applications representing a 95% increase compared to the same period in the previous year (Berkan Altun). In France, 84,000 new companies were registered in October 2020, which is a historical maximum and a 20% increase compared to the same period in 2019 (Berkan Altun). Therefore, entrepreneurs worldwide studied the market and identified niches that can help cover certain customer needs.
New startups have been focusing on responding to changing consumer needs in delivery, logistics, and IT markets. Delivery and logistics services have become highly in demand due to public safety issues, the increased need to stock up on certain items, and the limitations set to limit the spreading of the virus. Information technology startups have been emerging primarily in such markets as telecommunications, decentralized technologies, and biomedicine (Berkan Altun). Therefore, even though numerous doors ‘closed’ for businesses as a result of the pandemic, there has been a surge in new opportunities that would benefit global economies in the long run.
As a significant contributing factor to macroeconomics, entrepreneurship has the potential to generate employment, and innovation, increase the manufacturing of new products, as well as diversify the sources of revenue. Thus, the pandemic has caused a change in the macroeconomic environment regarding employment and spending, resulting in the emergence of new businesses that fit the shifting trends in macroeconomics. As more entrepreneurs realize that there are goods and services that potential customers will highly value, they inevitably contribute to strengthening the economy. On a short-term basis, entrepreneurship enables the exploration of new macroeconomic trends as a response to shifting needs. On a long-term basis, it transforms the economy, creating new market niches and, as a result, new workplaces.
To conclude, entrepreneurship and macroeconomics are closely interconnected. While the macroeconomic trends influence either the demand or the lack of demand for certain businesses, entrepreneurship also allows for shaping the macroeconomic environment. The boost in entrepreneurship during the COVID-19 pandemic can be explained by increased unemployment, with more people being laid off and considering starting up their own businesses. Besides, the increased market demand for IT, logistics, and delivery services gave a spike to the creation of new companies and their future expansion of respective sectors.
Work Cited
Berkan Altun, Yusuf. “Pandemic Fuels Global Growth of Entrepreneurship and Startup Frenzy.” Forbes, 2021, Web.