Extreme Events, Entrepreneurial Start-Ups, and Innovation: Theoretical Conjectures

Area of Science:

• Economics
• Business Studies
• Innovation Management

Background:

• The COVID-19 pandemic presents an unprecedented "extreme event" with profound economic consequences.
• Existing literature explores the dual role of entrepreneurship in causing/resolving extreme events and its impact on innovation.
• Understanding these dynamics is crucial for effective post-pandemic economic recovery strategies.

Purpose of the Study:

• To synthesize existing literature on entrepreneurship's relationship with extreme events.
• To analyze the specific impacts of the COVID-19 pandemic on entrepreneurship.
• To propose evidence-based policy recommendations for fostering entrepreneurial recovery.

Main Methods:

• Literature review on entrepreneurship and extreme events.
• Development of a partial equilibrium model to simulate COVID-19's economic effects.
• Analysis of policy interventions for economic resilience and innovation.

Main Results:

• Entrepreneurship's role in extreme events is complex, acting as both a cause and a solution.
• COVID-19's impact on entrepreneurship necessitates targeted support for startups and firms.
• Recovery requires a multi-faceted approach including demand-side support and innovation facilitation.

Conclusions:

• Direct financial aid (subsidies, loss compensation) is vital for entrepreneurship recovery.
• Aggregate demand stimulation and income redistribution are essential complementary policies.
• Facilitating innovation through improved logistics and online access is key to overcoming supply shocks.