BEIRUT: (WBAF) The world is in the throes of a profound economic crisis sparked by the COVID-19 pandemic. For the first time since the Great Depression of 1929, every country, society and economy has seen devastating impact on health, employment, finance, trade and, most importantly, business.
The World Business Angels Investment Forum (WBAF) conducted a global survey that included business owners from more than 81 countries and across multiple industries. It elicited opinions on issues in a variety of domains, ranging from financing, the workforce, business model realignment, and types of support that are needed during this turbulent economic period. WBAF, an affiliated partner of the G20 Global Partnership for Financial Inclusion (GPFI), has submitted comprehensive policy recommendations to the G20 leadership in order to alert policymakers about the urgent needs of startups, as revealed by the survey.
The key findings of their May 2020 survey were shared in a brief virtual global press conference on July 1 that included 41 journalists from more than 35 countries. They are the following:
• 52.22% of entrepreneurs surveyed expected their funds would last 3-6 months without any additional funding; 29.6% of respondents reported that their current funds would last more than 3 months.
• 41.1% of respondents reported a more than 50% drop in market demand for their services or products.
• 63.1% of startups surveyed plan to change their business model in the post-pandemic business cycle; 36.1% of respondents have definite plans to pivot their business during this business cycle.
• 46.5% of respondents believe that the impact of the pandemic will last 6 months to a year; 11.3% believe it will persist beyond 2 years.
• 39.90% of respondents reported a drop in the valuation of their business, but 21.67% reported an increase.
Additional insights from the WBAF survey highlighted impacts across all industries. Consulting and professional services are the most heavily affected (29.02%) and electronics the least (1.96%). There was a high level of agreement (74.88%) among respondents about the need for and the benefits of liaising between business owners and policymakers. It is interesting to note an equal downturn in short- and long-term investments (39.41%) and widespread, complex contingency plans
A comparative analysis from Professor Singh
Professor Inderjit Singh, one of the three speakers of the conference, is a former Singaporean Parliament Member for 20 years and founder of one of the world’s first unicorns. He chairs the WBAF’s Global Startup Committee. “At this point, we would like to provide a summary of insights from other global surveys conducted by international organizations over the past few months that offer complementary views. Overall, you will see that the WBAF findings are consistent with these other major surveys,” Professor Singh told the audience.
Towards a hyperconnected digital world
Baybars Altuntas, a former Senior Advisor to the London Stock Exchange Group who now chairs the World Business Angels Investment Forum, was also a speaker at the virtual conference. He said that ‘WBAF has taken an active role in this global pandemic. As an affiliated partner of the G20 Global Partnership for Financial Inclusion (GPFI), the World Business Angels Investment Forum has submitted a comprehensive policy recommendations report to the G20 leadership in order to alert policymakers about the urgent needs of startups.” Altuntas’s comments are as follows:
1) Smart entrepreneurs will be the winners in post-pandemic economies!
Entrepreneurs who are quicker to read the changing customer behaviour will take a more active and profitable role in the post-pandemic business environment.
2) Traditional money is on its way to becoming smart money after COVID-19. This shows that ‘traditional money’ is trying to discover opportunities in the startup economy and early-stage equity markets after COVID-19. Traditional entrepreneurs are looking for ways to turn themselves to millennium entrepreneurs. Traditional money is on its way to becoming smart money after COVID-19.
3) A new career path for the young generation. We are entering a new career environment where digitalisation and workforce should cooperate instead of competing. It is about refitting our labour markets and our social-protection and welfare systems and making sure everyone has the ability to realise the human right to social security in the post-COVID-19 digital era.
4) Expectations from governments as a response to COVID-19
Governments must invest in the digital infrastructure of their communities such as internet speed, fintech, healthcare, and smart cities as a response to COVID-19. These all will lead to a better digital transformation of communities, better healthcare systems, more financial inclusion and more equal opportunities in education.
5) Providing computers
Online education will be the new post-pandemic educational model. It is important to note that, even in the U.S., at least 11 million students have no technology tool at all for online learning, and among those that do, a single device may need to be shared with siblings.
6) Increasing financial inclusion
There are 2 billion unbanked people in the world today. Access to finance and access to public support are almost impossible for the unbanked. Since a new paradigm for educational systems is on the way, we should accelerate the financial inclusion of these people so they can benefit from the digital transformation
7) Access to healthcare
Post-pandemic efforts will need to focus on deploying a primary care workforce that is better distributed geographically and that is trained to provide culturally competent care to diverse populations.
8) Increasing citizens’ creativity for the social good
Creative citizenship will be more important than ever in post-pandemic times. Policymakers should consider innovative ways of creating an environment for citizens where they can develop a promising way of thinking about the countless ways in which individuals and groups contribute valuable ideas and services and goods to communities with a common interest.
Impacts of COVID-19 for the startup economy
In post-pandemic times, we will increasingly use three important terms when discussing early- and post-early stage equity and capital markets: responsible finance, impact investment, and digital access to finance.
With the world now in the throes of a deep recession, one thing is clear: helping countries recover from COVID-19 will require billions of dollars to revive jobs and value chains, tackle systemic inequalities and promote a greener reconstruction. This will present significant opportunities for investors to innovate and finance projects that contribute to sustainable and inclusive long-term growth.
On the other hand, startups, entrepreneurs, scaleups, MSMEs and SMEs will have to discover innovative ways to reach angel investors and to pitch and close deals digitally.
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