The COVID-19 pandemic has dealt a heavy blow to the global economy. Not only have hundreds of millions of people lost jobs, but major companies including Avianca, Latin America’s second largest airline, and Neiman Marcus, the 112-year old luxury retailer, have filed for bankruptcy. Many others are projected to follow as global growth is expected to fall by as much as 2% per month.
As a result many entrepreneurs in low- and middle-income economies, where governments provide little economic and social relief, are struggling to get by. But even in the midst of the pandemic, some emerging market organizations are taking the saying, “necessity is the mother of invention,” to heart. At a time when it feels like innovation is dead, some organizations are recognizing that the current crisis has not only presented an opportunity for them to survive, but also grow.
Victory Farms in Kenya is the fastest growing fish farm in sub-Saharan Africa. With many hotels, restaurants, and open-market stalls as customers, the company struggled to fill orders when Kenya’s government enacted a shelter-in-place order. Innovation, however, came from an unexpected source: its customers, many of whom are market traders.
Instead of waiting for Victory Farms to figure out a way to get fish to them, they leveraged the country’s motorcycle riders, mobile phone technology, and mobile payment platforms to create a new distribution system. Working from home, the market traders would take orders for fish from their customers via mobile phone, collect payment via mobile money, and then contract the pickup and delivery of the fish to motorcycle riders. This seemingly low-tech innovation has kept Victory Farms going and the company is even considering expanding to other regions where it might take advantage of this new model.
How does a Tunisian taxi startup stay afloat when there are shelter-in-place bans ordering people not to move around? By moving other things. For approximately four dollars an hour (20km max), IntiGo users can now get their groceries delivered. Whether or not the company continues to deliver groceries after life gets back to normal is not clear, but for now, InitGo is providing a much-needed service by leveraging its existing infrastructure.
Although COVID-19 has affected everyone globally, it’s impacting people in poor countries the most. Many countries in Africa, for instance, don’t have the resources to educate the public on the negative impact of the virus, much less the resources to treat it if millions of people get sick.
Wellvis, a startup that took part in Venture Platform Foundation’s COVID-19 Innovation Challenge, developed a cost-effective solution that addresses this problem. By leveraging the proliferation of mobile phones, the company created a COVID-19 triage tool that helps people identify their risk level of contracting the virus, and educates them on what to do next. This simple solution can be applied to many other illnesses that are prevalent in low- and middle-income countries.
By the end of April, investors pulled out more than $100 billion from emerging markets. Equalife saw a huge opportunity to solve some of this dearth of funding, and began providing specific COVID-19 related venture debt to African-focused startups. By providing debt relief to firms that are struggling through no fault of their own, Equalife Capital is helping them stay afloat and make healthy returns for their investors. The company launched an Equalife Capital Africa Venture Debt COVID-19 Relief Fund specifically for this purpose.
Innovation alone won’t resolve the social and economic devastation caused by this global pandemic. However, for the world to move forward, new and innovative ways of doing things must be a core component of the strategy. Economic crises have always led to new innovations; the SARS pandemic gave rise to Alibaba, and sharing economy giants Uber and Airbnb emerged after the 2008 financial crisis. By keeping the economy moving and finding new ways to create value for customers, we at least know that some innovations born out of this crisis will make the world a better place.
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With development pushed back 30 years, these innovations are critical for recovery