COVID-19 AND CHALLENGES Hubs were asked how the pandemic had a ff ected their revenues and premises. 78% of the hubs were forced to shut down their premises at one point during the pandemic, but we now seem to be grad- ually going back to business. Only 16% of the hubs remained open and operational throughout the entire period. A further 3% had to close their prem- ises and permanently shut down. In terms of revenue, half of the hubs had a drop of up to 50%. 17% of the hubs were very negatively impacted with revenue drops of more than 50%. Only 6% of the hubs saw an increase in their revenues. Lockdown measures, social distancing require- ments and a majority of employees working from home are some of the likely reasons why many co-working spaces were forced to halt operations and why there was perceived hesitation in launch- ing new hubs as a result of decreased demand for o ffi ce spaces following COVID-19. Still, with the
majority of Africa’s cities a ff ected by poor electricity supply and internet connectivity, remote workers rely on co-working spaces to carry out their work. Also, many businesses, acknowledging that they can save costs frommaking long-term commitments for o ffi ce spaces, now make physical attendance less strict and adopt flexible packages such as hot-desking instead of renting out entire o ffi ces. Over the past eighteen months, there have been other obstacles that have threatened or reduced the respondents’ sustainability, aside from COV- ID-19. 71% of the obstacles were directly related to the hubs’ cash reserves. Lack of external funding was the challenge most frequently mentioned by the hubs, irrespective of the pandemic, whereas the reduction of revenues from programmes and rent, which was mentioned as second and third largest factors, can be considered as direct results of COVID-19.
FIGURE 20 AND 21: CHANGES TO PREMISES DURING THE PANDEMIC AND OPERATIONAL CHALLENGES
Temporarily closed, but back to business as usual
Switched to virtual
Remained open and operational Forced to close and permanently shut down
Other
Lack of talent to mentor startups Cuts to pre-approved funding Competition among hubs
Lack of external funding Reduction of programme revenues (also due to COVID-19) Reduction of rent revenues (also due to COVID-19) Shortage of startups to support
Other
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