Abstract
The COVID-19 crisis has changed how firms and industries do business – at least for now. What is uncertain, however, is the duration of that change. Will the industry change induced by the COVID-19 crisis persist and, if so, for how long? Can a crisis, and particularly the COVID-19 crisis, act as a more permanent change agent and create an environment that mimics the entrepreneurial opportunity that industry forcing functions create? If yes, then there is cause to consider the entrepreneurial opportunity that the COVID-19 crisis provides. In this paper, we review the changes that the pandemic has brought to business practices. Furthermore, we discuss the differences between crisis-based opportunity and entrepreneurial opportunity created by industry forcing functions in order to illuminate the ability of a COVID-19 crisis–induced Low Touch Economy to sustainably create entrepreneurial opportunities. We show examples and list the attributes of industry forcing functions that have already provided sustainable entrepreneurial opportunity. Then, we match these attributes with the factors pertaining to the COVID-19-related Low Touch Economy. We find that the COVID-19 crisis has similarities and differences to the traditional industry forcing functions started by disruptive technologies. However, unlike traditional industry forcing functions, the COVID-19 crisis acts in a pan-industrial manner, making the impact of the pandemic more profound. Furthermore, the timing of the pandemic is important too: the COVID-19 crisis struck during the emergence of a Schumpeterian wave of Industry 4.0 and accelerated the adoption of its most important harbingers. We provide researchers and practitioners a lens through which to review not only the COVID-19 crisis’s possibility of lasting effects, but also how it will affect entrepreneurs.
Highlights
Even in 2021, COVID-19 still continues to affect the everyday lives of people, organizations, and countries
We find that the COVID-19 crisis has similarities and differences to traditional industry forcing functions started by disruptive technologies
We show how the COVID-19 crisis induced the Low Touch Economy, which is a great match to industry forcing functions
Summary
Even in 2021, COVID-19 still continues to affect the everyday lives of people, organizations, and countries. The Low Touch Economy induced by COVID-19 has, changed how firms operate (shifting the managerial focus from eliminating slacks in search of efficiency toward building resilience to counteract uncertainty), how they compete (changing the praised hero from an achiever to someone who supports the community and cares for others), where they compete (moving transactions to the digital marketplace basically overnight), and the tools they use to do so (as we can witness in the ever-increasing technology adoption rates). Since the COVID-19 pandemic is still upon us and we observe that despite the vaccination efforts, new variants emerge and countries exit and enter lockdowns in an a-synchronized manner, we conclude that the world will carry on with a certain form of social distancing, making the move back to the old normal unlikely We argue that this aspect of the COVID-19 pandemic creates entrepreneurial opportunity and acts like an industry forcing function. There is, evidence that the COVID-19 pandemic has accelerated the use of Industry 4.0’s underpinning technologies and affected and accelerated the Schumpeterian wave [Cros et al, 2021]
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