Digital Entrepreneurship in Times of Crises: Building Entrepreneurial Resilience Through Dynamic Capabilities

Abstract As major exogenous shocks and polycrises become the new normal, digital start-ups face heightened vulnerability due to scarce resources, yet they also benefit from inherent flexibility. While entrepreneurial resilience is increasingly recognised as crucial for survival, the intersection of digital entrepreneurship, resilience, and dynamic capabilities remains underexplored. To address this gap, we conduct a case study of Israel – a country exposed to multiple overlapping and subsequent shocks in recent years. Drawing on interviews with 10 digital start-up leaders and extensive secondary data, we find that digital start-ups, during crises, shift from routine-based digital capabilities to heuristic-based dynamic capabilities that enable swift adaptation. In post-crisis phases, they bounce forward by institutionalising some of these heuristics, thereby strengthening preparedness for future shocks. Our study defines and empirically substantiates digital entrepreneurial resilience as an emerging construct, demonstrating how dynamic capabilities drive resilient digital entrepreneurship in polycrisis environments.