Impact of COVID-19 on Digital Entrepreneurs of the Middle East

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COVID-19 has put the world into disarray. It has had severe impacts on people’s health and strained healthcare systems around the world. Apart from the human tragedy, it has significantly impacted the economy at large. Existing businesses are struggling to maintain continuity; with many companies forced to operate with the work from home model. While it has worked to an extent for a few companies not everyone can work from home owing to the nature of their businesses.

 The Middle East was only recently waking up to wonder of digital entrepreneurship with more investors bringing in their technology and expertise to assist start-ups in the digital space across the Middle East.  From music to art and from auctions to e-commerce, the space was filling up with creative entrepreneurs who were starting business to harness the economic potential of the region that was largely dependent on its oil profits. But with the corona virus putting this in a flux, entrepreneurs now have to find a new normal to ensure business continuity. Business growth is not the current issue but continuity to ensure that businesses stay afloat without suffering too much of a liquidity crunch is essential.

In the digital entrepreneurial space, the MENA (Middle East and North Africa) region has seen success in the areas of Artificial Intelligence, Arts and Entertainment, Education and Training, Travel and Social Networking owing to the fact that over 60% of their population is connected online. The burgeoning eco-system had attracted developers and investors from across the globe to put their resources into the next big region for digital development. Millions of regional home-based businesses are on Facebook and Instagram to connect with their customers and this has propelled many skilled artisans and local entrepreneurs to take the leap into the world of online business.

The current lockdown situation has now set into flow a new normal for many in the MENA region. Travel companies have taken the biggest hit with no flights and all tours being cancelled indefinitely across the world. Their recovery would take the longest in comparison to other businesses as they have literally been driven to zero sales. Small businesses that are dependent on small production facilities that are affected by lockdown status would also need to wait until normalcy returns to restart their production. E-commerce also has taken a hit with reduced purchases online thus impact the supporting logistics industry as well. Although this might seem short term, there may be newer stricter rules based on hygiene in order to open up the business to its full extent in the future.

The structural damage that the coronavirus has done to economy would be a year-long repair process. If business want to continue even if it means reduced revenues and profits, then they would do well to follow four rules:

• Protect your employees as they are the ones who will ensure that your business is up and running once the whole crisis blows over. Place importance on their health instead of just profits else you might end up shutting down for a longer period of time
• Monitor the crisis and see how you can tide over the situation by economically using your current resources. There may be a new normal to the way you do business so start preparing yourself and your company for it.
• Chart a path beyond the current crisis. Think of how you will reach that new goal
• Work out all the possible scenarios because we do not yet know how we are going to go.
• Involve your employees in the harder decision making as they need to know how their future will be impacted.

The next normal for business will be clear soon but bracing ourselves and preparing our teams to handle the implications is more important than expecting to go back to the old ways.