Entrepreneurial Resilience in a High-Volatility Economy: What Determines Start-Up Survival and Scaling Today

The modern entrepreneurial ecosystem is shaped by a paradox: barriers to entry have never been lower, yet survival and sustainable scaling are increasingly constrained by financial, cognitive, and institutional asymmetries. Peer-reviewed research across OECD and emerging economies reveals that the determinants of start-up success in the 2020s have shifted from purely technological innovation to resilience capacity—the ability to adapt business models, funding strategies, and supply networks under uncertainty.

A 2023 Harvard Business Review meta-analysis synthesising over 200 empirical studies found that while start-up failure rates remain structurally high (averaging 60–70% within five years), the leading predictor of survival is not sector or capital intensity, but adaptive management—firms that engage in continuous business model iteration outperform those with rigid early-stage strategies. This finding echoes empirical work by Ries et al. (2021) demonstrating that “lean experimentation” practices—rapid testing, user feedback loops, and iterative scaling—correlate with markedly higher survival rates in volatile markets.

However, new research indicates that resilience is as financial as it is strategic. Start-ups with diversified funding sources (venture capital, revenue financing, and crowdfunding hybrids) show greater survival probability when macro volatility spikes. Empirical data from the Journal of Business Venturing (Cumming et al., 2022) reveal that firms financed by a mix of equity and revenue-based funding survive downturns at nearly twice the rate of single-source financed peers, due to lower debt exposure and more flexible cash-flow structures. Furthermore, start-ups that embed ESG-aligned operations attract 15–20% more venture interest globally, reflecting a new equilibrium where sustainability and investor confidence are intertwined.

Human capital and network embeddedness remain critical. Studies using large-scale datasets (Audretsch & Belitski, 2021; Spigel & Harrison, 2023) show that entrepreneurial ecosystems with strong knowledge spillovers, institutional trust, and social capital yield significantly higher start-up density and innovation persistence. This indicates that start-up success is increasingly determined by regional and relational contexts, not isolated founder competence. In this view, ecosystems—universities, accelerators, angel networks, and public-private research clusters—act as resilience infrastructure, diffusing risk and lowering informational barriers.

Digitalisation and AI adoption also shape competitive differentiation. Firms that integrate AI-driven decision support and data analytics early experience measurable productivity gains. Recent longitudinal evidence (Brynjolfsson, Rock & Syverson, 2023) demonstrates that AI adoption enhances marginal revenue product of labour by 10–20%, primarily through optimisation of pricing, inventory, and marketing functions. Importantly, the competitive edge is path-dependent—late adopters face increasing returns disadvantages, as data network effects amplify incumbents’ learning advantages.

In sum, contemporary start-up performance is explained less by disruptive novelty than by adaptive capability—the strategic agility to learn faster than conditions change. Financial diversification, embedded networks, and digital intelligence form the triad of resilience in high-volatility economies. Policymakers and investors who design funding systems, training, and infrastructure around these principles—rather than chasing isolated innovation—will cultivate ecosystems where entrepreneurial dynamism translates into sustained economic productivity.

Audretsch, D.B. & Belitski, M., 2021. Knowledge spillover entrepreneurship, innovation and economic growth: A meta-analysis. Small Business Economics, 56(3), pp.1043–1070.

Brynjolfsson, E., Rock, D. & Syverson, C., 2023. The impact of artificial intelligence on the modern firm: Evidence from adoption and productivity. American Economic Journal: Applied Economics, 15(2), pp.1–34.

Cumming, D., Leboeuf, G. & Schwienbacher, A., 2022. Financing entrepreneurship in the digital age: Crowdfunding and resilience. Journal of Business Venturing, 37(5), 106242.

Ries, E., Fisher, M. & Spinuzzi, C., 2021. The lean start-up revisited: Empirical insights into iteration, learning, and growth. Entrepreneurship Theory and Practice, 45(6), pp.1327–1351.

Spigel, B. & Harrison, R., 2023. Entrepreneurial ecosystems and the microfoundations of regional development. Research Policy, 52(2), 104663.