With nearly 80 percent of the world in partial or complete lockdown, the impact of COVID-19 on economies and businesses will be significant and long-lasting.
According to a recent assessment by the International Labor Organization (ILO), over 25 million jobs could be lost worldwide as a result of the pandemic.
The UN agency now estimates that global working hours in the second quarter of 2020 will be 10.5 percent lower than their pre-crisis level in the last quarter of 2020-equivalent to 305 million jobs.
The way entrepreneurial business models and approaches are affected by the pandemic will have an impact on how entrepreneurship is perceived as a job choice in the future. Micro and small businesses, with limited savings and access to financing, have been hit particularly hard.
According to the World Economic Forum (WEF), more than 70 per cent of start-ups have had to terminate full-time employee contracts since the start of the COVID-19 pandemic. Many entrepreneurial businesses have pivoted to meet new needs for goods or services borne out of the crisis.
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Urgent attention and resources need to be channeled towards supporting young entrepreneurs to ensure they have the support they need to be resilient enough to manage the current crisis. The scale of the challenge means that a collective effort is required, bringing together actors across the entrepreneurship ecosystem. We can all play our part, here are five ways:
- Are you a funder or investor? Keep the cash going and agree realistic targets. These early months will be critical to the survival of many small businesses and it is vital that funding continues – even in the face of broader concerns about market performance. Open discussion between funders and investors and (prospective) grantees and clients on the rapidly changing situation and required response will be critical, enabling setting and revision of realistic targets now and over the months to come.
- Are you a policy maker? Deliver targeted support that addresses specific needs of young entrepreneurs. From cash grants and loan schemes to tax payment extensions and temporary unemployment measures, many governments around the world are introducing measures to mitigate the impact of the pandemic on small businesses. However, these support packages must address the specific needs of young entrepreneurs, who are particularly vulnerable during economic downturn.
- Are you an enterprise support organisation? Reassess needs and adapt your services. Many YBI members have shifted services online. In Israel Keren Shemesh has developed an online platform connecting entrepreneurs and expert mentors in crisis management and in Sweden NyföretagarCentrum is piloting a ‘virtual fair’ connecting entrepreneurs across the country. In France Adie has extended deadlines for loan repayments and released one million euros to finance an emergency cash credit facility.
- Are you a consumer? Buy products and services from small businesses where possible. Whether it is groceries or classes, you can often choose to buy directly from young entrepreneurs in your community.
- Are you a young entrepreneur? Take stock and reach out for support. Young entrepreneurs are grappling with multiple challenges – from ensuring the safety of employees to managing cashflow to revisiting business models and identifying new market opportunities. Reaching out to peer networks and support organisations is critical.
Stephine Ogutu is the Managing Director of Granity Public Relations (PR) Limited