"Despite the coronavirus pandemic wreaking havoc across a range of sectors in the European single market, the bloc’s economic recovery can be aided by making the most of new markets that will emerge in the startup ecosystem, says European lawmaker Eva Kaili.
Eva Kaili is a Greek MEP with the S&D Group. She has recently been appointed as an advisory board member for the lobby organisation Allied For Startups.
You’ve just joined an advisory board for startups as a part of the lobby ‘Allied for Startups’. How much of a critical time is it for Europe’s startup ecosystem at the current time?
Like all businesses, startups face challenges in the current pandemic, from disrupted supply chains to crashes in demand. More so than other businesses, however, startups are at a very vulnerable stage of their development. A Startup Genome survey found more than 40% of startups have less than three months of cash runway, meaning their resilience going into the crisis was low.
What’s more, startups have been excluded from many state aid schemes in Europe, which have focused more on protecting large companies and national champions through the crisis. This is particularly worrying when we consider that startups are the main drivers of jobs and growth in the European economy. We risk smothering today the companies who we will be looking to drive an economic recovery tomorrow.
This is why it is so important to pay attention and support startups now, and it is why Allied For Startups has chosen this moment to launch this Advisory Board. This crisis won’t last forever, and investing in protecting startups now will pay dividends to society as they drive the economic recovery in the coming months and years.
Has the coronavirus crisis resulted in new and innovative markets being opened up? What broader lessons can be learned in terms of our use of technology for fast and effective responses to public crises?
Absolutely. Survey data shows that 19% of startups have already pivoted to a new area since the beginning of the pandemic. Italian biotech startup Takis Biotech, for example, pivoted from cancer treatments to joining the search for a COVID-19 vaccine. Velmio, a startup developing a pregnancy health app in Estonia, pivoted to use its technology to develop a COVID-19 tracing solution.
More broadly, startups by nature are dynamic and adaptable. They are new businesses often operating in new industries. This allows them to pivot quickly in response to changes in circumstance, which makes them some of the most valuable assets society has in responding to crises that require innovation to escape.
They can only do so, however, if given the support they need to survive the initial economic shock, giving them the breathing room needed to reassess and refocus in a crisis."