Silicon Valley and other centers of tech startups may seem largely undeterred by the COVID-19 pandemic. After all, many in the tech world are already accustomed to working digitally. For most tech workers, it was relatively easy to transition to tele-commuting as lockdowns went into effect around much of the world 6 weeks ago.
Yet over the coming months, as the capital dries up, even the tech sector won’t be completely immune to the economic downturn. Genome, a U.S.-based global policy advisory company (specializing in tech startups, and governments seeking to support tech startups) surveyed 1,070 startups across 50 countries in March 2020, and found some reason for concern. Interestingly, tech startups that were focused on larger enterprises (as opposed to those focused on small businesses and medium enterprises) are struggling the most to get revenue.
Meanwhile, large enterprises are slashing expenses, while locked-down consumers are shifting their consumption patterns toward digital products and services. This transition is, of course, benefiting tech companies more than other businesses. The key is for capital to keep flowing…so as to keep up with demands for innovation.