Analysis: How Governments Can Redesign Support for Entrepreneurs After COVID-19
In the wake of COVID-19, most governments face unprecedented unemployment. This is particularly challenging in developing economies, which lack robust social safety nets and where unemployment and poverty were pronounced before the pandemic. This situation can potentially hasten ‘brain drain’ and increase the appeal of joining extremist groups.
Since small firms create the majority of jobs in developing economies, stimulating growth through entrepreneurship is crucial to address these issues. Even before COVID-19, however, few developing nations were successful in this.
Between May and August 2020, we undertook a study to explore ways to address these government shortcomings. It examined interventions to stimulate entrepreneurship in frontier and emerging markets with the concept of “entrepreneurial communities” at the centre (an expansion of Brad Feld’s thinking on startup communities in the US). Frontier markets are more established than LDCs (least developed countries) but not as established as emerging markets, possibly because of their smaller size or greater investment risk.
The results suggest that governments have an immediate opportunity to use the reset post-COVID-19 to course-correct their entrepreneurship development efforts and design policy that stimulates activity from the bottom up. To do so, they must begin by identifying the needs of local entrepreneurs.
Photo courtesy of Engin_Akyurt.