New business ventures coping with COVID-19: the case of the MENA region

1. Management challenges in the post Covid-19 era

New business ventures coping with COVID-19: the case of the MENA region

Jamal Alostaz, Gian Luca Gregori, Andrea Sabatini, Alessandro Cinti, Andrea Perna, Faris Alostaz

This ongoing research deals with the current COVID-19 crisis considered as the current scenario in which new business ventures – such as startups – should grow and operate. Let’s start with the sharing of some information regarding Covid-19 as reported by several Authors:

(1) “COVID-19 is spreading human suffering worldwide; that is what we should all be focused on. But we are not doctors. We are economists – and COVID-19 is most definitely spreading economic suffering worldwide. The virus may in fact be as contagious economically as it is medically”, (Baldwin and Di Mauro, 2020; p. 1);

(2) “The virus is bringing considerable human suffering. It is also resulting in significant economic disruption from quarantines, restrictions on travel, factory closures and a sharp decline in many service sector activities. These disruptions are the direct channels through which the virus is affecting economies”, (Boone, 2020; p. 37);

(3) “Covid-19 has severely tested our public health systems. Recovering from Covid-19 will soon test our economic systems. Innovation will have an important role to play in recovering from the aftermath of the coronavirus. […] Covid-19’s assault has prompted a number of encouraging developments. […] In fighting a pandemic, speed is crucial, and the sooner we know more and are able to take action, the better for all of us”, (Chesbrough, 2020; p.1);

(4) “The discovery of the coronavirus (SARS-CoV-2) and the spread of COVID-19 have led many governments to take drastic measures. The lockdown of large parts of society and economic life has come as an exogenous shock to many economic actors, not least innovative startups”, (Kuckertz et al., 2020; p. 1).

Clearly, Covid-19 has affected already and will continue transforming the relation between the whole society and the business as such. As pointed by Kuckertz et al. 2020, the emergent startups will probably take new paths in order to react to this massive crisis and it would be interesting to analyze the effects of Covid-19 on them as they are often recognized as being small, new and blurry typology of business. They are entities without any formal relationships as well as track records (Ostgaard and Birley, 1996) and one complex issue for them is how to develop and cope with their “counterparts”. Part of the literature has clearly shown that business relationships are central elements which affect the growth of these emerging companies. Particularly, the importance of the first business relationships developed by the start-ups is well recognized (Aaboen et al., 2017a; Baraldi et al., 2019) as ‘starting up’ is primarily a relational act (Aaboen et al., 2017b; p. 4). First customer and supplier relationships, as well as relationships with specific actors such as incubators, affect the consequent development of the new firm (Baraldi et al., 2019; La Rocca et al., 2019): the new company has to connect pre-existing resources and activities with those of other counterparts in order to be able to develop and evolve over time (La Rocca et al., 2013).

How does COVID-19 would affect the startup development appears a critical research area. A recent study conducted in Germany (Kuckertz et al., 2020) has focused on how German ‘innovative’ startups may respond to the crisis through the analysis of the major policy measures taken by the German government. The Authors have highlighted seven potential measures that both startups and policy should look at in order to cope with the Covid-19 crisis. In our work, we would like also to stimulate a debate on this important point by looking at an ongoing discussion which is taking place in the MENA (Middle-East and North Africa) region about how startups operating in different business sectors were behaving, currently behaving and would behave in the future after the pandemic disappears. Accordingly, this research project will mostly focus on how Covid-19 has been influencing the business relationship formation and development in the case of start-ups.

#Covid-19 #entrepreneurship #MENA region #new business ventures #pandemic crisis #start-ups