The Effect of Covid-19 on Norwegian Entrepreneurs

Abstract

Our qualitative study of 13 Norwegian startups, aim to answer how the entrepreneurial stage affects resilience in terms of opportunity recognition and exploitation, obtaining funding, and exploiting network ties. The sample is divided into three stages of business development and covers various sectors. Results confirm that startups in the early stages can more easily recognize and exploit arbitrage opportunities due to their size, hence, these firms are short-term resilient. Contrary, later stage startups with access to more resources and stronger networks can benefit from lasting market changes, consequently making them long-term resilient. Sector, governmental restrictions, and digitalization also played a significant role in the entrepreneurs’ ability to perceive and act on opportunities, thus, affecting their resilience. Further, later stage firms hold strong and formalized ties that supply these firms with valuable information and resources. Contrarily, early stage startups have weaker ties and scarce networks that provide these ventures with general information and fewer resources. Later stage startups are therefore perceived as more resilient. As a result, early stage startups turned to institutional support and digital social networks to counter weak ties and increase resilience. Moreover, the strong social ties that later stage startups hold correspond with the ability to obtain funding, while weak ties and decentralized networks caused early stage startups to rely on institutional actors. Surprisingly, it became evident that the national schemes failed to sufficiently cater to new ventures, thus, making the entrepreneurs less resilient. Despite highly interdependent variables, the strongest link in found in the network exploitation factor. The ability of a startup to utilize its network was significant in all stages and increased the resilience in the other variables. To increase resilience, early stage startups should focus on proactive network development. On the contrary, we recommend a more collaborative approach for later stage firms in terms of network and continuous development of their innovative culture. For all startups, we advise expanding and nurture potential investor ties to increase their resilience. Furthermore, institutional actors ought to tailor support schemes, frameworks, and procedures to advocate for new ventures’ resilience. Lastly, startups must digitize their operations to adapt in the event of a similar crisis rapidly.