On the Back of the Gray Rhino: Financial Market Vulnerabilities & Innovation-Driven Entrepreneurship

Introduction

Academics and financial analysts have always been fond of extracting metaphors for financial markets from the animal kingdom: “bulls“ for rising markets, “bears“ for falling markets, and “black swans.”[i] In the current COVID-19 financial market crisis, “grey rhinos,“ a term coined by Michelle Wucker, has gained popularity. A grey rhino serves as a metaphor for missing “the big, obvious thing that‘s coming at you [which] gives you a choice: you get trampled, move out of the way, or hop on the back of the rhino and use the crisis as an opportunity.”[ii] It is still early to gauge the “size“ and full-fledged impact of the “rhino“ or a financial crisis that is likely to come on the back of the pandemic, but few would argue that this pandemic will result in untold economic hardship for a while.

These countries do not have access to the same resources as developed market economies (DMEs), rendering them less resilient to pandemic-level shocks. Without adequate resources, economies worldwide have struggled to provide short-term livelihood support and the public health protection needed to respond to the virus‘s adverse effects.

The challenges faced by EMEs require urgent, scalable solutions beyond the current capacity of governments. The opportunity facing EMEs lies in their ability to embrace a type of entrepreneurship that solves the fundamental challenges confronting beleaguered economies, including healthcare, education, commerce, and financial services. “Innovation-driven entrepreneurship” meets this challenge by offering novel, scalable solutions that can bring value to local users as well as those around the world. Innovation-driven enterprises are resilient to external shocks and offer a promise of financial sustainability that will, in turn, deliver value to economies in need.

This working paper will identify the significant challenges facing financial markets and determine how innovation-driven enterprises can help address them. The churn of financial markets creates opportunities for entrepreneurs seeking to repair the underlying enablers of economies weakened by the pandemic. By harnessing the power of the gray rhino and using the crisis as an opportunity, entrepreneurs are uniquely positioned to mitigate the myriad effects of the financial crisis.

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