How sector fluidity (knowledge-intensiveness and innovation) shapes startups’ resilience during crises

Abstract

In the context of the crises, this study sheds light on the varying impact of crises on startups in different sectors and outlines the specific resilience practices utilized in response, recovery, and growth phases. The research team conducted qualitative analysis on 18 public discussion interviews featuring key stakeholders in the Indian startup ecosystem, which included 51 chief executive officers, founders, cofounders, and venture capitalists who reflected on COVID-19. The study found that high-fluidity sectors (highly knowledge-intensive and innovative) leverage their agility through resourcefulness and customer value creation. In contrast, low-fluidity sectors (low in knowledge intensiveness) primarily focus on operational adjustments. As the transition goes from response to recovery, high-fluidity sectors prioritize digital transformation and strategic shifts, while low-fluidity sectors continue to cope. In the growth phase, high-fluidity startups exhibit growth aspirations, while low-fluidity ones emphasize business model innovation. This research provides valuable sector-specific insights into resilience and highlights the evolution of these strategies throughout a crisis, thereby enhancing our understanding of startup resilience in the context of the crisis.