Babies are not the only lockdown boom.
By: Elizabeth Sobowale
Tags: Covid 19, Baby, Startup, Lockdown, New Business

Self-care, DIY, online shopping, home food businesses and many more.

Picture from istockphoto.com

It’s fair to say that it has been a very tough year for a lot of us.

As we crossover the 1 year lockdown mark, many of us are beginning to reflect on what a year it has been, trends are beginning to become very apparent and with spring looming we’re all beginning to have a growing feeling of hope and excitement for the end of all this. And for summer of course!

Whilst some of us have spent a lot of time in isolation, others have kept themselves very busy and active. It’s evident in the amount of babies being born and expected in 2021.

But babies are not the only by-products of the COVID-19 lockdown. Video and music streaming services are enjoying immense growth and subscriptions, online fashion retail retailers that have adapted their collections to include trendy WFH and loungewear pieces are cashing out (some have even expanded into beauty, skincare and homeware). Software and hardware devices needed for home learning and work have become essentials. Interior decorating, DIY, and gardening are now peoples favourite hobbies. The wellness and well-being industry are also enjoying a very healthy growth with the rise in self-care culture.

The most important boom of lockdown however is a growth in startups, there has been a colossal amount of new business registrations around the world despite the economic crisis many countries are facing. The US, Germany, Japan and UK are amongst the countries observing this phenomenon.

During a five month period alone (March to July 2020) 315,000 companies were incorporated in the UK, that’s a 7% increase compared to the same period in 2019. 176,000 start-ups were recorded between April to June, the highest ever exceeding the previous 2016 record. There are2.5 million more businesses in the UK in 2020 compared to 2000, that’s a 75% increase.

Many of these businesses are being born as a result of record unemployment due to thousands being laid off work. It is no shock that around 3/4 of these new businesses have no employees; mirroring the rise in self-employment. Although it is not clear yet whether these new businesses will compensate for the rate of employment it is still a progressive and positive trend.

In 1943 Economist Joseph Schumpeter in his book ‘Capitalism Socialism and Democracy’ describes this phenomenon as ‘creative destruction’ a process of

“industrial mutation… that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”

Essentially this is a fall of traditional employment as we know it and the rise of self-employment and startups. A good example is the fall of the UK High Street and the rise of e-commerce (acquisition of Topshop by Asos).

E-commerce has seen the highest rate of new business creation, followed by the service sector especially consultancy and accountancy (self employed people need accountants). The fashion industry has also seen a rise in new and independent brands with a lot of interest in sustainable and ethical fashion.

Another very positive trend is female entrepreneurship, the gender gap is decreasing and there are more women than ever starting and running their own businesses. 46% of private businesses in Ghana are owned by women, in the US 47% of women started a business compare to 44% of women in 2020. Women of colour were responsible for 89% of new businesses created in the US in 2019 although it is still increasingly difficult for women to receive funding for their businesses compared to their male counterparts.

It is evident that the pandemic has caused a huge economic shift and new trends are starting to emerge. The big question however is which new business trends and startups will survive post-pandemic.