The global pandemic has brought about a boom in entrepreneurs, as the number of new companies worldwide significantly increased in 2020 from the previous year. In the UK alone, the number of registered companies increased by 30% year-on-year in November and December 2020.
The home kitchen and dining area became one of the most lucrative money-making locations in Britain. During the lockdown, one in five Brits either started or put plans in place to set up a new business, while three-quarters of people who were made redundant developed a new business.
The growth of more diverse entrepreneurs
The younger generation (18–34-year-olds) have become the most entrepreneurial, with nearly half expressing that they are starting or planning to set up a business by the beginning of 2021.
It’s not just the UK that has benefitted from this shift, for an increase in the number of entrepreneurs has had a welcome and positive impact on the global economy at large. The United States, France, and Japan witnessed notable surges in businesses being registered throughout the pandemic, and analysts predict this growth of entrepreneurship will continue post-pandemic.
With many different ideas and perspectives, the entrepreneur community has become extremely diverse. Whether you’re a Gen Z, a side hustler, mumpreneur, freelancer, or digital nomad, the entrepreneur community welcomes you. It removes obstacles such as location, gender, and race, allowing people who wouldn’t necessarily connect to communicate, trade, and work alongside one another.
The pandemic’s effect on diversity in entrepreneurialism has been generally positive. Since March 2020, more women than men have started a business – shaking up the status quo of men historically starting up twice as many businesses as women.
Similarly, COVID-19 has had a positive impact on the number of digital nomads around the world. One study shows that the digital-nomad population in the US exploded mid-2020, and we expect this to hold steady while working remotely remains an attractive option and the future of work plays out.
This explosion in entrepreneurs and digital nomads is nothing new in Estonia. Estonia has recently been ranked sixth among the world’s emerging startup ecosystems.
Moving away from a single location model to access diverse talent
Estonia is home to 413 start-ups, which might not seem much, but compared to the country’s small population of 1.3 million, it works out as 31 start-ups per 100 inhabitants. The country has created an accommodating environment for start-ups to thrive, with it taking only 15 minutes or less to start up a new enterprise. There is also no corporate income tax on undistributed profits.
The e-Residency programme is helping to support the growth of startups not just in Estonia but around the world. This service is available to anyone across the globe. Many e-Residents of Estonia work around the world but run their business out of the small Baltic nation within the EU. Every e-Resident can access Estonia’s e-services, sign documents digitally, and launch and run their business 100% online.
By moving away from a single-location model, our entrepreneurs have access to a wider talent pool. Increased diversity also brings a broad range of experience, skills, and backgrounds together, where teamwork and cooperation can thrive, driving a more productive workforce. For example, companies that are more gender-balanced are 25% more likely to outperform those that do not, according to McKinsey.
Even before the pandemic, diversity was identified as a key driver of innovation. A 2017 Boston Consulting Group (BCG) study showed that diverse companies are more in tune with customers’ changing needs and develop more relevant products. The varying backgrounds and perspectives generate an array of ideas, insights, and solutions.
With advances in technology, there is no better time to grow your business. By going cross-border, you not only have access to more customers but a diverse talent pool too.
Lauri Haav is Managing Director at e-Residency, a government-issued digital identity and status that provides access to Estonia’s transparent business environment.