Crowdfunding and Innovation in Times of Economic Crisis

Abstract

The COVID-19 health crisis has caused a collapse in global economic activity, which is unprecedented since the Great Depression of the 1930s. In the same line of thought, the world economy will be durably marked. We wonder about the mutations it will undergo to recover rising indicators to address the challenges of the Circular Economy (CE). In this context, we note the impetus for alternative financing models for SMEs, particularly participatory financing or crowdfunding. This spurs an investigatory question in what way and how can crowdfunding drive innovation in the context of economic crisis? This study takes a mixed approach. We interviewed project leaders using an interview guide to better understand the reasons that motivated them to use crowdfunding and to gather their feelings about the democratization of start-up financing. Additionally, we collected 30 questionnaires from project leaders and collected data for the same campaigns on the participatory financing Kisskissbanbank platform. The responses were analyzed and compared with the conceptual framework and basis of prior studies. Results brought to light that crowdfunding certainly allows to finance start-ups that would not have had access to traditional financing. Also, the results of our survey postulate a role for crowdfunding in innovation. But this data remains fragile, due to the framework of the survey and the context of the crisis, which is still adjustable.