- 21 April 2020
- Posted by: Canberra Innovation Network
- Categories: COVID-19, General News
At the Canberra Innovation Network we are keen to listen to entrepreneurs and members of our community about how they are responding to the COVID-19 situation. We reached out to companies in our network and 59 shared their thoughts about the opportunities and challenges they face. We did this through a short survey and had follow-up conversations with many of the respondents.
Unsurprisingly over 90% of businesses have had to change their operations and facilitate a move into a new virtual capacity.
“Everyone is working from home. We had to cut hours significantly for employees and I’ve cut my own salary by 50%.” – Respondent in Software Development Sector
Although an unfortunate 7% of respondents had to cease trading, the vast majority are adapting to challenges and fewer than 30% reported substantial postponement of growth opportunities.
The most common reported challenge is cash flow, but perhaps surprisingly the next most common was developing new sales and marketing strategies, indicating that people are actively engaging in finding new customers and opportunities.
“[We now have] the ability to attend seminars of interest which are online, rather than in a room on the other side of the world…” – Respondent in the Software as a Service Sector
Some entrepreneurs commented about the move online leveling the field globally:
“A Canberra-based startup can now talk to the VC in Silicon Valley in the same way as if they were operating from downtown San Francisco.” – Respondent in Software Sector
Entrepreneurs reported many opportunities in product development, enhanced digital delivery, online sales and enhancing communications. Few saw no new opportunities and when we spoke to people in depth, we heard people actively engaging in finding ways to positively respond.
“Our customers are starting to re-emerge and as we talk to them, we’re discovering new problems we can help them with” – Respondent in Consulting Sector
It is important that innovative businesses get support to position for future growth. Their growth, the new industries and the jobs they will create can help restructure our economy into the post COVID-19 era.
The Canberra Innovation Network has aggregated the call from the community into recommendations for our own operations as well as for the government and key ecosystem stakeholders. We presented and discussed the results of the survey with 35 innovation community leaders in a virtual collaborative innovation lab on April 9.
Grants, such as the Innovation Connect Grant, were suggested as the key mechanism for government to intervene in the innovation sector. Relaxing selection criteria, more funding rounds, more recipients, program support coupled with the grant funds, repayable grants and more focus on accelerating digital transformation; These are just some of the ideas that were suggested as potential adjustments, or expansions, of the current system.
Digital infrastructure is another critical component to the success of innovation companies. Initiatives between government and telecommunication companies to fortify and enhance the digital infrastructure and services are also considered essential by the innovation sector.
Companies seek information, coaching and support to make it through the tough times and explore their new opportunities. Although people are their most precious resource, 38% of respondents had to make employee cuts or salary cuts to prolong their runways and increase their chance of survival.
Companies are also worried that the federal government support may miss the mark with the innovation sector. For an early stage or knowledge-intensive company it may be difficult to demonstrate a 30% dip in revenue to qualify for Jobkeeper. The recently introduced restrictions on levels of foreign capital that can freely flow to support the companies make it difficult to raise overseas investment, despite the reduced ‘tyranny of distance’.
We have also identified several startups that have special offers or are engaging with the crisis in very creative ways. Entrepreneurs are born to find a way. This is an evolving situation and innovation is so critical for our country’s future. The jobs of the future are undoubtedly coming from this sector, so how we support this sector will define how we as a community and an economy, succeed as a whole.
The survey will be remaining open – we are keen to hear more from you so please let us know what you are doing, what are your challenges, opportunities and how we can help.