How is the Coronavirus affecting the European Innovation Community
We can definitely agree that the past few months have been difficult. The uncertainty and unpredictability of the situation has been tough for everyone on many levels. The COVID-19 outbreak has impacted everything from Spotify listening trends (streams of “Don’t Stand So Close to Me” by The Police up more than 135% in recent weeks) to the way we celebrate birthdays, weddings, and anniversaries while respecting social distancing laws. And during this ‘State of Emergency’ that has been activated in many European countries, companies of all shapes and sizes have been affected within only a 24hour time frame and have had to adapt everything from working styles, team structures, products and service offerings to completely transforming business models. In some cases, businesses can’t keep up with the demand as consumer behaviour has completely shifted to new but extremely clear needs.
Our community of 4,500 digital and tech innovators has also suffered sudden changes due to this new reality. But as much as they may find themselves in difficulty, they still strive to be the bringers of innovation. Startups have an ability like no other to adapt and transform at a fast pace, and they can often see solutions to problems that may seem impossible to fix.
Extraordinary times call for extraordinary projects
We have members across Europe who are creating new projects and initiatives every day with the aim of making an impact on the lives of the people and ecosystems that surround them. For example, our member Massimo Temporelli in Italy who 3D printed valves for resuscitation devices after a broken supply chain for a hospital located in Brescia, near one of the hardest-hit regions for the virus. The startup Akara Robotics from our Irish community developed a robot emitting ultraviolet light (UVC) with the ability to disinfect hospitals and kill the COVID-19 virus that hides on surfaces. And in our Vienna campus in Austria, Daniel Horak Co-Founder of CONDA started a project CONDA HILFT to help the affected companies to raise capital from supporters in the form of subordinated loans providing the technical and legal framework to obtain financial support with less bureaucracy and in a timely manner. Many other stories are coming from all over Europe also in Spain and Denmark and even small initiatives like making donations to the cause, providing discounts and free services and the opportunities being shared. It has been truly amazing to see how our Talent Garden community are adapting to this situation to the best of their ability. However, the following data collected from our surveys allows us to take a deeper look into the challenges that continue to arise for our members during the crisis.
It is important to understand how the Coronavirus is affecting the European Innovation Community. We need to be aware of the challenges they are facing, how they are tackling this emergency, and what they believe the future holds. To this purpose, we created and distributed a survey for the startups within our European ecosystem, which today consists of 23 campuses in 8 countries. The questions revolve around issues related to smart working and managing change, as well as forecasts of work and innovation on the other side of COVID-19.
The research was conducted based on our community of innovators to give insights into the commitments, concerns and post-COVID future of an industry that has proven to be strategic in tackling the ongoing emergency.
What’s on the minds of European entrepreneurs
When looking at the main concerns for European entrepreneurs facing the COVID-19 emergency, two concerns for our community stand out. The first is strongly related to the revenue loss that businesses are suffering during this global economic slowdown. In fact, 40% of the respondents, when asked about the prediction of business losses, expected at least a 50% loss of revenues and for half of these respondents, the number went as high as 75%. On the other hand, 10% stated that they do not expect to suffer losses at all, meaning these entrepreneurs are in a better position due to the types of products and services they provide or to their ingenuity in reimagining their businesses and transforming their offer to fit the new market needs.
The second major concern for over 50% of the respondents is their impending fundraising activities, which were scheduled for the upcoming months. Investors had previously acted as though the economic impacts of COVID-19 would be limited. But the fast spread of the disease sent massive shockwaves across the global economy with the stock markets crashing and sending investors towards assets that are perceived to be safer options, leaving a large group of startups in difficulty.
Another suspicion that lies heavy on the mind of many people is when things will go back to normal, even if it is a new type of normal. When asking our community when they believe they will be fully back in business, 35% of the respondents stated in September 2020. While 26% are more optimistic predicting a return as early as June, while the most pessimistic 4% of the respondents believe it will take as long as December.
European startups have made a commitment
Part of our survey was aimed at finding out what our startups and the community at large are actively doing to keep moving forward during this crisis and how they are making sure they will still be standing when the economy stabilises. According to the majority of our respondents, the primary activities are focused on improving existing processes (60%), developing new products and services (48%) as well as redefining organisational team structures and improving skill sets.
Our respondents also believe that during this time some of the most fundamental technologies that will support consumers and in result businesses is eCommerce, for almost one respondent out of 2 (48%), followed by entertainment 38%, food delivery 32% and online training 30%. These are all vital aspects of the new daily life for people who are confined to their homes.
Also, 50% of the respondents stated that they have already implemented or participated in initiatives that support those most affected by this emergency, specifically by developing products to solve tangible problems or through offering promotional prices for their products and donations.
Being flexible meant being better prepared
While many companies over the years have understood the benefits of smart/remote working, it still came as a shock when it was to be implemented as a daily activity. This rapid change caused many businesses to lose time and money as they had to play catch up to understand the tools, structures and processes needed for productive and effective work agendas when they are no longer working from the same office. Unfortunately, it was also found that leaders are unprepared to manage their teams remotely, resulting in further difficulty in managing change. This phenomenon was very apparent in Italy the first European country to face the enormous repercussions of the fast and widespread of the virus that sent the country into a national quarantine on the 9th of March 2020. In support of this turning point in Italy also the home base for Talent Garden we responded swiftly in support of all our partners, community, industry players and the general public by launching Antea Platform, a digital laboratory for companies and professionals dedicated to the topics of Smart Working and Agile methodologies full of resources, video content and insights to learn while interacting with industry experts.
We did see however that for most of the startups in our community they did not struggle with adapting to remote working like many corporates, and this ultimately, gave them a great advantage, both in the short term with the smooth, uninterrupted workflow and in the long term as it’s uncertain how long we will be working from home. In fact, as much as 80% of our interviewees stated that they were practising smart working before the COVID-19 emergency, and 80% feel that this has helped them manage and continue working during this crisis.
Among the most used tools for creating a productive environment and keeping connected while working from home was video conferencing software like Google Hangouts, Zoom, Cisco Webex, etc. named by 83% of the respondents. Other fundamental technologies for WFH are instant messaging, such as Slack (47%), work ecosystems like Google or Office 365 ( 23%) and task management tools like Asana and Trello.
Another aspect of lockdown that is highly important for leaders is to ensure their teams keep their spirits high during this stressful and often scary time. Mental and physical health is vital for staying motivated during such a confusing time. 70% of the respondents say the activity regarded as having a positive effect on reducing stress levels and influencing mood are online training opportunities (e.g. webinars, free courses etc.), followed by wellness tutorials, such as yoga and fitness courses (23%).
Our findings: worries, but clear signs of resilience
Uncertainty is beyond question one of the major aspects of the current crisis. Not knowing when it will end or its long-term consequences make the startup journey tougher. Having said that, startups also have qualities that can make them particularly resilient in a crisis like this. They are used to managing uncertainty, they know how to pivot – fast, they have agile, cross-functional teams that are quick to reorganise and they are tech-savvy and comfortable with remote work.
When we listen to our startup communities, we hear worries; about their businesses suffering and about their survival. But we also hear resilience and optimism. In the midst of uncertainty and chaos, they are finding ways to restructure and re-focus activities; they are keeping their team spirits high by combining tech tools; they are being fervently productive and they are taking the opportunity to learn new things and sharpen their skills.
But what is very clear is that this is a fragile ecosystem that needs urgent and extraordinary measures to be taken to safeguard the European Innovation Ecosystems and the startups that are fighting to stay afloat. We can’t afford to lose the know-how developed over the year. We need to avoid the loss of jobs that will jeopardise the fast advancements that are taking place and endanger the important investments that have been made and need to continue to happen. Here you can see a list of government initiatives happening around Europe to support startups.
It’s a challenging time for everyone but as always we know we are stronger together. Stay tuned to our social media and website to hear about our community initiatives, upcoming virtual events, online meetups, and more. We hope that everyone in our community and you as well is staying safe and positive.