Global Pandemic Creates New Opportunities, Challenges for International Entrepreneurs
Tuesday, November 17, 2020
The COVID-19 pandemic is forcing entrepreneurs to innovate amid much uncertainty and challenge.
In a new paper, published in Journal of World Business, Professor Shaker Zahra, Robert E. Buuck Chair of Entrepreneurship, explores what the world will look like post-COVID-19 for international entrepreneurship. In short, he sees “a great transformation of the global business environment, providing the impetus for a new breed of international entrepreneurs that find opportunities in the upheaval that COVID-19 has caused.”
Before the pandemic, international entrepreneurs were already facing strong headwinds from various anti-government, nationalist movements around the world, and trade wars. Zahra posits that the arrival of COVID-19 has only made things worse.
“The growing politicization of international institutions is likely to make it hard for these businesses to function effectively in tomorrow’s turbulent environment,” says Zahra. “What this pandemic has really highlighted are the many issues that can arise when you depend on a global supply chain.”
For example, Zahra points out that many Chinese factories that manufacture items such as medical supplies and drugs were closed because of COVID-19, leading to supply shortages and stunted response efforts. Where these critical supplies were made became important, with some countries prioritizing taking care of their own citizens before supplying foreign customers.
“Given these ideological shifts and ongoing trade wars, the global supply chain is likely to continue to undergo major changes, with a greater focus on relocating activities outside of China,” Zahra says. “Should these changes materialize, they are likely to change the pattern of where entrepreneurs locate their businesses, with whom they collaborate, how they define their own supply and value chains, and how they source needed capabilities.”
These disruptions can have serious negative consequences for international ventures, according to Zahra. It could slow down the flow of knowledge across national borders due to limited mobility, interrupted interactions, and growing concerns over trade secrets.
“If this continues, new business creation may decline in certain parts of the world, especially in emerging and lesser developed economies,” he says. “That would have any number of global impacts.”
Some industries have seen significant growth, including enterprise technology services, home entertainment, hospitals, medical equipment suppliers, e-commerce retailers, courier pick-up and delivery services, cybersecurity, and sanitary product manufacturing, among many others. Nearly all of those sectors provide international opportunities for entrepreneurs.
Additionally, the pandemic has pushed commerce to online platforms. For many international ventures, the growing use of digital technology means cheaper and greater access, better coordination, higher productivity, and lower costs. Cross-border communication is now easier than ever, allowing entrepreneurs an opportunity to exploit these technologies and market needs.
Another potential positive Zahra sees is that many companies had to shift their focus—and sometimes their entire business—during COVID-19. This has the potential to lead to previously unseen innovations or ideas.
Finally, Zahra calls on academic colleagues to “ask new questions” and “employ a wider range of [research] approaches” to ensure research continues to provide actionable insights for international entrepreneurs.
This article appeared in the Fall 2020 Discovery magazine
When the COVID-19 pandemic hit, Carlson School faculty experts researched a myriad of aspects of the pandemic in real time. In this edition, you'll see how state and local governments dealt with the economic downturn, how that economic anxiety was worse for some individuals and groups than others, and how the Supply Chain and Operations Department shifted its research agendas and curriculum to help educate policymakers, media, and the public on how to address these issues.