It was not long ago when a professor of entrepreneurship at Massachusetts Institute of Technology, speaking to an international English daily said that the 2008 global financial crisis was all about eliminating the weak and survival of the strongest.
Fast forward 2020—the world is grappling with a brand-new challenge that has shaken the root of human survival and livelihood. The novel coronavirus or COVID-19 has wreaked havoc, transcending the boundaries cast, creed, color and of course geopolitical barriers.
This invisible enemy has brought global economies to a screeching halt and put the world under lockdown. India is no exception. In an effort to fight COVID-19, a country with 130 billion population has been put under lockdown for a second term. Needless to say, with daily economic activity coming to a standstill, pay cuts, layoffs, and even smaller organizations, especially startups completely shutting down.
As a developing economy, India had endured several hardships – from the 1991 economic crisis owing to swelling imports to the Global Financial Crisis (GFC) of 2008. However, if we compare them with the current situation, nothing seems to match up to the magnitude of the impact of the novel coronavirus or COVID-19.
While the country’s robust startup ecosystem had shown some real signs of growth and promising future, the sudden wave of the deadly virus has jolted the very base of India’s startup scene.
According to Traxcn, (a Bangalore-based data-driven research platform) it might come as a surprise, but till February this year, Indian startup raised funding, which was three times more than 2019. In fact, before the pandemic tightened its grip over the economy, things were looking brighter for Indian startups.
A report released by KPMG in February last year stated that the number of startups in the country increased to 50,000 in 2018 from 7000 in 2008, which is a 7.14× jump. Sadly, the smooth-running startup street was forced to cut short its journey owing to the COVID-19 pandemic and of course the multitude of challenges it threw up. And the pertinent question looming large is—will the crisis lead to multiple boom and bust story of many startups or like the 2008 financial crisis it will act as a filtering mechanism pushing innovation in entrepreneurship at its best.
However, we must understand that the pandemic has given rise to a typical situation. Unlike previous economic crises, the virus has transcended all political and economic boundaries leaving no Big Brother for developing economies (also badly hit) to turn to. A deep-rooted sense of uncertainty across global economies is indeed evident.
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