The toll of pandemic on entrepreneurs revealed in new global study, but there is also reason for hope

A global study by King’s Business School and collaborators from 23 countries on COVID -19 and entrepreneurship has documented the profound negative impact of the COVID-19 pandemic on entrepreneurs and small business globally. Yet the study also finds signs of optimism and resilience.

Many entrepreneurs have seen their livelihoods threatened over the past year, and have been particularly impacted by the pandemic because they have fewer resources than large businesses. Whilst entrepreneurs are known for their agility, the significant challenges they have faced range from late paying customers to lack of access to government support.

This was combined with the uncertainty and health-related worries, restricted social contact and support, all of which enhanced stress for entrepreneurs and diminished their mental well-being. But the research shows that, through entrepreneurs’ capacity to be resilient, over half of respondents can bounce back from adversity and cope with the setbacks, uncertainty, and stress that the pandemic entail.

The researchers surveyed over 5,000 entrepreneurs in 23 countries that represent 3/4 of the world’s economic output and over half of the world’s population.

The findings in relation into how entrepreneurs’ businesses were affected by the pandemic include:

• A staggering 61% of entrepreneurs saw the very existence of their business under threat due to a significant decrease in trading activities, although so far lay-offs only took place in 28% of SMEs. This means, nevertheless, that in the study sample alone, the jobs of 3,162 entrepreneurs and their 41,578 employees are at risk.
• About two fifths of entrepreneurs (42%) increased remote working or newly started to work from home. A third (33%) continued to work at their business’ premises, and a fifth (20%) were already working from home before the pandemic. Over a fifth of entrepreneurs (23%) had to start caring for their children at home because schools and nurseries closed, which created challenges for their business
• Entrepreneurs are known for their agility and this was also true during the Covid-19 pandemic: 68% of entrepreneurs surveyed adapted their plans for the business and almost 40% of the entrepreneurs saw new business opportunities during the pandemic. These opportunities were diverse and related to digitalisation, health & well-being, local vs. global business focus, sustainability and new business models.

The key findings in relation to entrepreneurs’ stress and mental well-being include:

• Stress worsened during the crisis and entrepreneurs’ life satisfaction was on average 12% lower than before the pandemic.
• Two fifths of entrepreneurs (40%) report high levels of uncertainty and unpredictability for their businesses.
• Most entrepreneurs worry about their own and their family health (58%), fewer are worried about insufficient medical care (34% with substantial variation across countries).
• Nearly half of entrepreneurs (49%) were frustrated by the restricted social contact due to the pandemic. On a more positive note, and despite high levels of remote working, only 15% of entrepreneurs reported loneliness at work as problematic.

Professor Ute Stephan, Professor of Entrepreneurship at King’s College London, who led the study and report said: “While entrepreneurs were optimistic and many showed agility in the pandemic, it was also clear that many were in survival mode. In our sample alone, the jobs of 3,162 entrepreneurs and their 41,578 employees are directly at risk. The short- and long-term opportunities entrepreneurs explored in the pandemic suggest a long-term change to the economy around five trends (accelerated digitalisation, renewed focus on the local economy, demand for inclusive and sustainable business models as well as cross-cutting trends of enabling personal and business resilience). Smart governments support entrepreneurs around these trends to help recover and re-imagine a thriving post-covid economy.”

There report outlines insights and policy recommendations for how a thriving post-Covid economy can be supported by governments and entrepreneur support organizations.

Drawing from the science of well-being and latest research on entrepreneurs’ stress, well-being, and resilience. The researchers summarize five easy steps that entrepreneurs can take to deal with stress productively and to support their mental well-being and build resilience which include acknowledging and seeking help and making time for recovery from stress.

Professor Stephan commented further: “Entrepreneurs are the backbone of the global economy, but it is only recently that we are starting to take their mental health and resilience seriously. Given the scale of the Covid-19 pandemic, understanding the experience of entrepreneurs in these difficult times as well as the outlook they have for what lies ahead are critical to sustain small businesses. Crises aside, entrepreneurs’ work is highly demanding in general yet ‘being one’s own boss’ is also intensely rewarding which means that the stresses of entrepreneurs’ work sometimes go unnoticed and that’s when burn-out can happen.”

The report can be downloaded here and information about the global team behind the study is available here.