Despite reports of labor shortages and business closures, the pandemic’s wide-reaching effects on the economy have not been 100% negative. One of the positive results to emerge over the last two years is a growing interest in entrepreneurship. Reports from the U.S. Census Bureau show that the Great Resignation may represent a shift toward entrepreneurial activity.
The number of new business applications jumped over 500,000 in July 2020, and the most recent figure remains over 400,000. Startups have traditionally formed because someone spots an opportunity, and the pandemic has only heightened this phenomenon. New business ventures are largely being driven by demand for services and products associated with health and well-being. Industries such as logistics have more gaps than existing businesses can fill.
People aren’t starting companies because they lack traditional opportunities. Instead, self-employment is becoming a more favorable prospect than conventional choices in the current economic climate. This shift and others represent ways aspiring and startup business owners are reshaping the face of entrepreneurship.
Business Owners Are Being Driven by Adaptation
The ever-fluctuating environment created by the pandemic highlights the need for adaptability. And this isn’t the type of flexibility that allows for changes at a slow pace or incremental progress. Entrepreneurs might be making up a new concept, zeroing in on a market prospect or running an established business. Within a few days, that concept could take off with surging demand, or supply chain snags could turn markets volatile.
Companies that are already up and running may need to make overnight adjustments to new regulations or shifts in consumer sentiment. Following a five- or even three-year business plan is no longer the name of the game; adjusting to the present environment is. For instance, surging outbreaks of new coronavirus variants may prompt consumers to hold back on in-person gatherings and shopping, with obvious ramifications for restaurants and brick-and-mortar stores.
Meanwhile, businesses that aren’t dependent on foot traffic for sales will continue to meet the demand that’s still there. While consumers may be hesitant about going into a retail location, the desire for products and services isn’t diminished. Companies prepared to rearrange staffing, job duties and store environments can respond to volatility more efficiently. Owners might even discover some changes built around tech can remain permanent and expand their market reach.
Technology Is Increasing Accessibility
The internet and technology in general have made it possible for nearly anyone with an idea to start and market a business. Conventional storefronts and offices aren’t necessary to do business, which increases the potential for home-based entrepreneurship. The internet and its resources have also opened up the door for self-employment through third-party services.
Vendor platforms for services such as personal shopping, ride-booking and pet sitting allow entrepreneurs to get their feet wet. Maybe they don’t have the risk tolerance for a startup or would rather not invest in marketing a separate business. National and regional third-party platforms that hire independent contractors for a common service lower the entry barriers for self-employment. You can pursue entrepreneurship with less risk and still keep your day job.
While some individuals go all in or eventually leave their employers, others become freelancers for non-competing platforms to pursue diverse interests. A person may enjoy being a finance specialist but want to pursue a lifelong interest in working with animals. Caring for other people’s pets allows them to fulfill that goal and diversify their income sources. Entrepreneurs who start web-based service platforms can also use tech to meet the needs of underserved communities.
Social Responsibility Concerns Are Motivating Business Models
Concerns about climate change and socioeconomic inequities are motivating the innovations and ideas behind startups. However, it’s not just the private sector that’s benefitting from entrepreneurs’ desires to make a difference. The nonprofit sector is also witnessing the creation of new ventures that focus on helping under-represented populations succeed.
Analysis done by McKinsey shows that a transition to net-zero carbon emissions by 2050 will shift consumer demand for a variety of products and services. Somewhat predictably, oil production volume will decrease by 55%, and gas production will go down by 70%. Entrepreneurs are already stepping up to fill the demand for green energy sources and solutions that help mitigate climate change.
Examples include designing construction processes and filtration products that isolate or remove carbon dioxide from the environment. Other startups are using AI and robotics to develop pesticide-free farming solutions. Still others are focused on delivering renewable energy solutions to homeowners who don’t have access to conventional electricity. These developments reflect desires to start a business for more than profit or income-based needs.
New Wrinkles in an Old Fabric
Entrepreneurship has been the fabric of society for centuries. However, technology and pandemic-fueled uncertainty have made business ownership and self-employment more attractive career options today. As established structures and systems become less viable, entrepreneurs are realizing value in adapting to constant change.
As a result, business models and structures are being designed to be increasingly flexible, often at a moment’s notice. The road to self-employment is also becoming more diversified as people take advantage of technology’s reach. No longer motivated by a paycheck alone, workers are seeking purpose and meaning in their careers. And it’s entrepreneurial opportunities that are fulfilling that need.