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Article

Competency-Industry Relatedness (C-IR) Framework for Sustained Business Growth in Startups during and Beyond Pandemic: Myths and Lessons from Publicly Funded Innovative Startups

by 1,2,3,* and 1
1
Department of Economics and Business Administration, University of Alcala, Plaza de la Victoria 2, Alcalá de Henares (Madrid), 28802 Madrid, Spain
2
School of Business, University of Applied Sciences and Arts Northwestern Switzerland, 4600 Olten, Switzerland
3
Instytut Zarządzania, Uniwersytet Szczeciński, ul. 71-004 Szczecin, Poland
*
Author to whom correspondence should be addressed.
Academic Editor: Víctor Jesús García-Morales
Sustainability 2021, 13(9), 4632; https://doi.org/10.3390/su13094632
Received: 1 April 2021 / Revised: 14 April 2021 / Accepted: 15 April 2021 / Published: 21 April 2021
(This article belongs to the Special Issue Sustainability in Business: Change, Growth and Future Impact)
Context: The coronavirus disease 2019 (COVID-19) pandemic led to a turbulent business environment, resulting in market uncertainties, frustrations, and rumors. Wrongly held beliefs—or myths—can hinder startups from turning new market opportunities into their favor (for example, by failing at diversification decisions) or undertaking wrong business decisions, e.g., diversifying in industries that have products of no real market value). Objectives: The objective of the paper is to identify the beliefs that drive the business decisions of startups in a pandemic and to isolate those beliefs that are merely myths. Further, this paper proposes strategic guidelines in the form of a framework to help startups make sound decisions that can lead to market success. Method: The two-step research method involved multiple case studies with five startups based in India, France, Italy, and Switzerland, to identify perceptual beliefs that drove strategic business decisions, followed by a case study of 36 COVID-19-solution focused startups, funded by the European Union (EU). The findings were validated through a survey that involved 102 entrepreneurs. The comparative analysis of two multiple case studies helped identify beliefs that were merely “myths”; myths that drove irrational strategic decisions, resulting in business failures. Results: The results indicate that startups make decisions in pandemic situations that are driven by seven myths, pertaining to human, intellectual, and financial resources. The decision on whether to diversify or continue in the same business operation can be divided into four strategic options of the Competency-Industry Relatedness (C-IR) framework: ignore, delay, phase-in, and diversify. Diversification in the same (or different industry) is less risky for startups if they have the skills, as needed, to diversify in related industries. Diversification in related industries helps startups leverage their experiences and learning curves (those associated with existing product lines) to adapt their existing products in new markets, or utilize their technologies to solve new problems via new products. The desired outcome for these startups should be sustainable business growth—to meet sustainability goals by contributing to the society and the economy. Conclusion: The C-IR framework is a strategic guide for startups to make business decisions based on internal factors, rather than myths. Accurately assessing skill diversity and the nature of new industries (or markets) will help startups leverage their existing resources optimally, without the need for (pricey) external funding. This will foster sustained business growth resulting in a nation economic development. Knowledge transfer from the Innovation ecosystem will further strengthen the C-IR framework effectiveness. View Full-Text
Keywords: startups; coronavirus; COVID-19; European Union; entrepreneurship; strategic decisions; economic development; sustainable business growth; Competency-Industry Relatedness (C-IR) Framework startups; coronavirus; COVID-19; European Union; entrepreneurship; strategic decisions; economic development; sustainable business growth; Competency-Industry Relatedness (C-IR) Framework
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MDPI and ACS Style

Gupta, V.; Rubalcaba, L. Competency-Industry Relatedness (C-IR) Framework for Sustained Business Growth in Startups during and Beyond Pandemic: Myths and Lessons from Publicly Funded Innovative Startups. Sustainability 2021, 13, 4632. https://doi.org/10.3390/su13094632

AMA Style

Gupta V, Rubalcaba L. Competency-Industry Relatedness (C-IR) Framework for Sustained Business Growth in Startups during and Beyond Pandemic: Myths and Lessons from Publicly Funded Innovative Startups. Sustainability. 2021; 13(9):4632. https://doi.org/10.3390/su13094632

Chicago/Turabian Style

Gupta, Varun, and Luis Rubalcaba. 2021. "Competency-Industry Relatedness (C-IR) Framework for Sustained Business Growth in Startups during and Beyond Pandemic: Myths and Lessons from Publicly Funded Innovative Startups" Sustainability 13, no. 9: 4632. https://doi.org/10.3390/su13094632

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