Startups have a great role and significance in the economy of countries and the world. Around the world, COVID 19 has created a crisis reducing the creation of startups. These are times that are challenging the survival and limiting the growth of the start-ups. There are different business registrations that have dropped significantly in recent months. No wonder, we are missing a generation of startups at this time. However, a very hard situation is also an opportunity of another kind. It is important to explore the new start-up challenges and opportunities to make sure that things thrive in the best way they can.
Policymakers need to tackle the idea of the short term challenges for supporting short term liquidity. It is necessary to ensure funding and support to the startups to help them grab and make the most of the new business opportunities. Perhaps, there is a need for policies that lower the hurdles and the variety of new opportunities while helping to speed up the recovery and offering incentives for internship for startups and in enhancing the entrepreneurial skills will help in enhancing the recovery and taking care of the aggregate employment is important.
Why start-ups are important?
It’s no secret that startups have emerged as the important driving forces for economic growth, creativity, and job creation. New forms are responsible for 20 % of the employment and these are greatly contributing to greater productivity.
Startups are going to play a significant role in boosting economies. Some of the encouraging things are that many innovative small firms have rendered fast while demonstrating a significant level of flexibility in the pandemic. There has been a great shift in the in fully digital service, with health services and education sectors being in the forefront. There have been significant innovations in medical services and goods.
Significant challenges for startups during COVID 19
Many of the existing startups are facing tough times due to significant challenges brought about by COVID 19. Most of the organizations that are engaged in high-risk activities are facing constraints in accessing traditional funding. There is also a possibility of a labour supply shock in the pandemic situation. However, there are still possibilities of mix of start-up challenges and opportunities.
In various countries, the policy responses are aimed at saving the economy from going into a crisis situation. Governments have responded by inducing measures for sustaining short-term liquidity needs, like direct lending, loan guarantees, subsidies, and grants. France is a country that has set up € 4 billion for supporting start-up liquidity. Similarly, Germany and the UK have made their own policies for supporting the SME sector in their respective countries.
COVID 19 is not only a challenge for thriving the existing startups but also for staring a new one. Strong decline in emerging of start-ups are advisable across Europe, like in Portugal, Hungary, France, Turkey, and more. However, the current COVID 19 crisis is also giving rise to the short-run and long-run opportunities. It is important to find answers to the present start-up challenges and opportunities to make the economy thrive and get going.