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Authors

Mert Firat
Actor, Serial Entrepreneur and UNDP Goodwill Ambassador

Mehmet Serkan Tosun
Chief International Officer and Director of Ozmen Center for Entrepreneurship, University of ÁùºÏ±¦µä Reno

Remember the expression “may you live in interesting times,” which is the English translation of what is thought to be an ancient Chinese curse. Here “interesting times” may be referring to challenging or troubling times. It feels like we are indeed living in interesting times, where we are surrounded by natural and man-made disasters, and conflicts around the world. Disasters cause death, destruction, and long-term trauma but, interestingly, they also lead to opportunities, trigger new ideas and new beginnings. In this blog, we are addressing that “interesting” relationship between disasters and entrepreneurship. What happens to entrepreneurship when disasters hit? How does entrepreneurship respond to disasters?

In an , Christopher Boudreaux, Monica Escaleras and Mark Skidmore show empirical evidence of a negative relationship between natural disasters and entrepreneurial activity measured by “the number of newly registered limited-liability firms as a percentage of the country’s working age population.” At the same time, they also find that this relationship is rather temporary. They find no evidence of a long-term relationship. In a more recent , Christopher Boudreaux, Anad Jha and Monica Escaleras find that governance in the country matters. While natural disasters impede entrepreneurship in countries with governance problems, they produce higher entrepreneurial activity in countries with better governance. There is no doubt disasters impact businesses, small and large, and entrepreneurs feel the brunt of the devastation physically and economically. But, entrepreneurs are by nature innovators and they are willing to take the risk. We expect entrepreneurs to be active during times of trouble as well.

A recent example of a devastating natural disaster with extensive physical and socio-economic impact is the series of earthquakes (and substantial aftershocks) that hit the Southeastern part of Turkey and Northern Syria on February 6, 2023. from the earthquakes surpassed 50,000 with more than 100,000 injured and more than 3 million displaced people. According to a , the direct physical damage of the earthquakes was estimated to reach about $34 billion (or about 4% of Turkish GDP). The total cost including recovery and reconstruction efforts would be substantially higher, potentially reaching about . World Bank announced to help with the reconstruction efforts.

While a variety of Turkish government agencies and international organizations have been active in post-earthquake recovery and reconstruction, private sector players, entrepreneurs and private citizens have also been very responsive to the region’s needs. Speaking of needs, a relatively new social entrepreneurship initiative called “” (Ihtiyac Haritasi in Turkish) became an important platform during the earthquake. The idea behind Needs Map is quite straight forward. It is a social cooperative platform that brings people in need together with people who are eager to provide support. Their website shows that the platform has helped more than 10 million “items of need” since 2015, which is really impressive.

After the earthquake, the Needs Map, which worked effectively in the 4 Turkish cities where the destruction was most intense, provided indirect and direct support worth more than 75 million dollars. With the "one rent, one home" project, Needs Map, together with the Izmir Municipality, mediated and carried out campaigns for 10,000 people to obtain temporary homes. It cooperated with Mastercard to support the local businesses through creative solutions such as the social marketplace. Regional development offices have now been established in the Gaziantep and Adana chambers of commerce to attract regional investment and support. Regional Reconstruction and Development Centers (RRDC), which include European Bank for Reconstruction and Development (EBRD), and the World Bank, will add significant value to the region in the long term.

We also see greater support from government ministries, agencies and private sector players towards . It is interesting that natural disasters have devastating impact on people, businesses and entrepreneurs but entrepreneurship is also seen as an important part of formula for disaster recovery. Sprinkle some government and international support and you have a success story waiting to be told.