Resilient innovation and entrepreneurial responses to systemic shocks: Economic insights into sustainable business ecosystems

Abstract

The COVID-19 pandemic exposed systemic vulnerabilities in financial markets and raised pressing questions regarding the resilience of technology and entrepreneurship under shock. This study investigates whether two innovation-intensive sectors, technology and pharmaceuticals, exhibited synchronization with the S&P 500 across eleven epidemiologically defined phases (March 2019–December 2022). Using a robust methodological framework, a crisis-aware synchronization model was developed to detect real-time versus delayed investor alignment. A key novelty of the approach is the incorporation of time lags as a relevant factor influencing responses to systemic shocks. Results show that the technology sector exhibited statistically significant contemporaneous co-movement, consistent with its role as continuity-enabling digital infrastructure, whereas pharmaceutical sector demonstrated episodic, event-driven co-movement concentrated around vaccine and policy milestones. Notably, correlations during pandemic waves were not stronger than during inter-wave periods for either sector. These findings extend the Adaptive Markets Hypothesis by introducing a sector-contingent perspective: structural integrators (technology) stabilize expectations in real time, while event-contingent innovators (pharmaceuticals) generate punctuated alignment. For sustainable finance and entrepreneurship, the results suggest actionable levers: technology should be treated as a portfolio anchor and a policy priority for resilient digital infrastructure (measured in terms of uptime, scalability, energy efficiency), while pharmaceuticals should be considered a tactical complement, with innovation surges converted into durable capacity.