Since the year 2019, the covid-19 pandemic has left the country’s economy devastated. Based on an article shared by CNBC Indonesia, Indonesia’s economic growth was halted by 2.97% (YoY) in 2020. On the other hand, the government has been working recklessly on giving its citizens their vaccine jabs so that the situation will soon recover. Based on the health ministry data, by September 2021, it is estimated that the total number of doses administered is at 100.7 million doses snd it is still growing.
Startups have emerged as key drivers of economic growth and job creation and are often catalysts for radical innovation. Based on an article in voxeu.org, in the US alone, Young firms like startups account for about 20% of employment. They also create almost half of new jobs on average across OECD countries (OECD 2016). Additionally, innovation by young firms contributes significantly to aggregate productivity growth, accounting for half of it in the US (Klenow and Li 2020).
Startups accelerators and incubators see startups as one thing that keeps the economy in a country moving. Apart from that, HUB.ID, as a startup program in Indonesia from Kominfo, sees the challenges that are faced by them as well. From the information that HUB.ID gathered, here are some challenges and opportunities that are expected in the pandemic:
- Government Relaxation that is prone to corruption and fraud
In the era of a slowed-down economy, the government frequently gives relaxation or even incentives to the citizens. In Indonesia, it was implemented by programs like Kartu Pekerja and credit relaxations. UNDP sees the government effort forced them to move fast to keep up with the pandemic. This, in turn, might cause compliance, oversight, and accountability measures to be weakened, making them more vulnerable to fraud.
Startups, like mentioned above, account for 20% of job creations. Take a look at the numbers for Indonesia’s unemployment rate. Quoted by Kompas with Data from Badan Pusat Statistik (BPS) Indonesia, unemployed people reached 8.75 million people. The numbers haven’t gotten better enough.
Startup accelerators, incubators, and business matchmaking like HUB.ID is aware that the youth have to keep bringing innovative ideas, thus creating startups that can be birthed through HUB.ID or other acceleration programs so that these startups can create more job in the future.
3. Support existing and the creation of new firms
Pivoting and being flexible is one the things that make a business win or lose. The existing businesses have to see this pandemic as an opportunity to change how things have been done before. According to VoxEU, “startups can help the constraints created by difficult health or economic conditions, and respond to changing preferences and needs.”
As for new firms, numerous successful innovative startups have emerged from periods of crisis. The likes of Dropbox, Airbnb, Whatsapp, and Pinterest are the best examples.
4. Business Sustainability
Young business owners often pursue sustainability. They care about the future and the environment, and that’s a fact. So investing in them through this period is critical because it means more future employment and can help the government address environmental problems. HUB.ID already thought this through and has a tailored mentoring system for Government solutions to tackle issues that may arise in the future.
So those are the challenges and opportunities we are facing in the pandemic. Remember, it’s all about perspective. Even in the worst of times, you can always find a silver lining. HUB.ID, with its business matchmaking programs, is ready to assist your post-seed startups!