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Recessions and recessions have long been viewed as catalysts for innovation. Disney, Microsoft, Airbnb, Whatsapp and others were all born during times of economic turmoil. Great innovators are great problem solvers, and few problems are as deep and pervasive as those caused by recessions. So it makes sense that entrepreneurs, who are essentially problem solvers, have historically played a very important role in getting the economy back on track.
However, this time things are different. The stars are aligned so that today’s young entrepreneurs will not simply play a role in this recession, but become the very backbone of a post-recession world that is bigger, better and more equal than before.
Field leveling
This is because the crisis we face today can be much more widespread than before. Yes, it is financial in nature, but more closely related to the ongoing social, cultural and environmental changes we are seeing worldwide.
For example, technological advances from the 2008 financial crisis to today have been rapid and significant. This means that the barriers to entry for entrepreneurs today are lower than before. Not only does this make it easier for many people to handle a huge number of problems, but it also levels the playing field so that more diverse entrepreneurs can solve these problems to a greater extent. Become.
Elsewhere, the impact of Covid-19 has accelerated digital adoption and revolutionized the way we live and work. As a result, today’s entrepreneurs have the means to disrupt more fields and solve more problems.
solid foundation
In addition to technological advancements, the tech sector as a whole is now more mature. Many founders of successful companies have taken what they learned from previous experiences and moved on to their second and third endeavours. Working with these founders has given us a lot of talented people who know what it takes to run and work in a startup. Investors and her LPs are more sensitive than ever to what it takes to find, help, and support companies as they expand. Moreover, recent successes have made entrepreneurship an attractive route for many, and even the current recession cannot dampen their drive and resilience. We place our ecosystem on a solid foundation from which we can build the next generation of world-changing businesses.
Turn challenges into opportunities
And direct opportunities arise from the challenges created by economic turmoil.
First, mass layoffs and salary freezes are giving the impetus needed to make the best talent independent from across tech-mature ecosystems. To turn a passion project into a startup and exchange skills for success.
Second, the crisis is giving the sector a much-needed reset. It helped level valuations, cut bloated salaries, and put an end to the somewhat aggressive tactics Big Tech uses to kick out rivals. of innovators making the leap into entrepreneurship has become economically viable.
In fact, leaving the entrepreneurial spirit and security of tech giants to startups was once seen as a risky move, but today’s uncertain times have given people more control over their own futures. It may feel like a long term move. .
Purpose over salary
Finally, there is a generational shift that cannot be ignored. Whether it’s the world they grew up in or the lessons learned from past entrepreneurs, today’s young leaders are more purpose-driven than ever before.
one study We found that 94% of millennials want to put their skills to good use.another found 63% of them believe that the primary purpose of business should be to “improve society” rather than “make a profit”.One third report Nearly two in five millennials have turned down a job or assignment that doesn’t align with their values.
Therefore, the desire to solve problems, improve society and make the world a better place is more ingrained in today’s young entrepreneurs than ever before. The startups being built today are likely to be even stronger than those born from previous recessions.
This is not to say that the road will be easier. You might be tempted to look back on past recessions and their innovations with romantic nostalgia. It’s much harder to see that light when you’re looking into the darkness.But having worked with future entrepreneurs every day for more than 30 years, I see firsthand their unwavering drive, passion and purpose. I am optimistic and excited about the road ahead. we need to trust them.
Jane Khedair, Executive Director, Entrepreneurship and Private Capital Institute London Business School.
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