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Writer's pictureSachh Foundation
Jul 8, 20202 min read



The Effects of Covid-19 on Innovation and Start-ups

By Nikita Kheni


Covid-19 has disrupted the world for the past few months. The economic devastation is likely to have numerous long-term impacts on several start-ups and on innovation as well.


Startups have either lost funds to stay afloat through the pandemic, or they will run out of funds soon. According to Forbes, two-thirds of startups around the world will run out of money by October. Without money, startups are not able to pay most of their full-time employees, and these employees face the impacts of either being laid off or being terminated.


Startup Genome conducted a Global Startup Survey that provided comprehensive statistics on how startups have been impacted. One of these statistics is that 84% of startups in North America, 67% in Europe, and 59% in Asia said they had laid off employees in response to Covid-19’s economic impacts. These numbers are large and display how many people have suffered financially.


According to Harvard Business School, firms will be able to look at investing in innovation and technology that is “particularly effective in mitigating risk and improving safety—even when they are initially inferior in terms of costs, user-friendliness, or other quality dimensions.” (Harvard Business School).


Innovation is facing some good impacts as firms turn their attention to risk-mitigating technology. Innovation regarding biosafety will be crucial for the post-Covid world. Various companies are looking at whether some positions could remain remote in the long-term. There is also a potential of the normal 9-5 desk jobs not being so prevalent as work continues to be completed from anywhere. There are positives and negatives associated with remote work, but people are hopeful that this will force workplaces to be more flexible and accommodating to their employee’s needs.


Some startups have also been able to shift their businesses to address needs that have arisen from the pandemic, varying from producing face masks and ventilators, and delivering groceries. According to the World Economic Forum, “the nature of innovation is often incremental but, at the same time, essential for survival and adapting to our “new normal.’”


There is a lot of focus on innovation in the health industry as well, as healthcare workers and scientists work to find a vaccine and prevent the spread of the virus. Apps for contact-tracing are also under development. There are certain privacy issues with this in several countries, but it shows how technology can be incorporated into healthcare as well. Business models may also change to become virtualized for at least the next few months, if not longer.


Innovation will hopefully be a catalyst for positive long-term impacts on improving consumer experiences and workplace satisfaction.





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