To date, the human cost of coronavirus (COVID-19) is more than 13 000000 infections, and more than 570000 death worldwide. The economic cost so far has been staggering. Many economies almost come to a halt. The impact on supply, demand, the financial market is affecting both larger and smaller firms. However, SMEs are at a disadvantage due to limited resources, existing obstacles in securing capital, and the span of time over which they can survive this pandemic compared to the larger firms.
How SMEs and new start-ups are going to handle this pandemic? Can they survive it or a great majority of them will go out of business? Should the government step in to help?
As far as I know, this is not a high time for initiating a new startups. Even existing newly established startups are facing difficulties because of economic recession and high unemployment. This is the bizzare time where investors are reluctant to utilise their savings at any sector globally which limits the circulation of capital in a market. No one knows that what's next?
I think there will be a temporary (or somehow) complete shutdown for many SMEs if this pandemic exists more than a year.
Mahmoud, the adverse impacts and challenges faced by SMEs in the wake of the Coronavirus pandemic have been receiving a lot of attention from a range of scholars across multiple scientific disciplines. Highlighting what these challenges are and the various survival strategies that SMEs in developed and developing economies have been adopting to mitigate against potential demise is worth a topic of investigative research. It would also be beneficial to identify various coping mechanisms and resilience measures that have been adopted as small businesses adapt in the context of adversity and crisis. Good luck.
Dear Mahmoud, thank you very much for the question, I agree John is a great challenge. Far from being able to answer your relevant questions, I apologize for providing only descriptive aspects.
There is some consensus in sectors that will be harmed more than others by the current crisis. It could be considered among the first among SMEs - mainly tourism workers, restaurants, cultural activities, certain construction sectors, shops not linked to virtual sales, among others, exposed to a prolonged and indefinite time of wear and economic uncertainty, without being able to react in a positive adaptive way, or by underestimating the disease through solidarity based on the perception of risk sharing. In the conditions of an environment, which would cause consequences for their psychological and physical health, in one case or another.
As Mahmoud points out, small and medium-sized enterprises have no room for readapting themselves in this transition to pandemic-related products - such as Tesla, making artificial respirators; Louis Vuitton, Dior, Givenchy and Guerlain producing alcohol in gel, among others - and despite their social and economic importance in ensuring the production of food and other essential goods and services - as well as access to them - have historically had great difficulties accessing credit.
The Regional Inclusive Social Development Agenda adopted in 2019 includes proposals to advance the universal guarantee of a basic income level of citizenship. With the aim of providing food security and health coverage to avoid a serious deterioration in living conditions that deepens discomfort and distrust, and the risk of loss of social cohesion. The international financial crisis of 2008 showed the importance of counter-cyclical social public spending and social policies aimed at moderating the impact of the crisis on real economies and curbing the rise in unemployment and poverty.
In line with the above, many governments are reacting to the economic damage that SMEs are suffering from the pandemic. The United Nations Development System also reconfigured its global SCORE programme using a broad global network to provide relevant information and services to microenterprises and SMEs. The same one includes support programs to the PYMES, specific formation of the COVID-19 on the subject of safety and health in the work.
Here are some links that contain information about programs and financial support for SMEs, hoping that it can be of use to them:
-http://www.sela.org/media/3219723/covid-19-resumen-de-las-principales-medidas-estados-miembros-sela.pdf
-https://www.alide.org.pe/wp-content/uploads/2020/05/Programas-de-emergencia-de-gobiernos-crisis-XI.pdf
-http://sice.oas.org/SME_CH/Newsletters/SICE_SME_CH_NL_COVID_19_s.asp
I apologize, Mahmoud, for not providing knowledge regarding your main questions. Being central that science can anticipate if the measures being taken are the right ones? And what are the appropriate mechanisms to manage the survival of SMEs to COVID 19?
Greetings and thanks.
Estimado Mahmoud, muchas gracias por la pregunta, coincido con John es un gran desafío. Lejos de poder responder sus relevantes interrogantes, le pido disculpas por solo brindar aspectos descriptivos.
Existe cierto consenso en sectores que se verán más perjudicados que otros por la actual crisis. Podría considerarse entre los primeros a las PYMES –principalmente los trabajadores del turismo, restaurantes, actividades culturales, ciertos sectores de la construcción, comercios no vinculados a la venta virtual, entre otros–, expuestos a un tiempo prolongado e indefinido de desgaste e incertidumbre económica, sin poder reaccionar de una manera adaptativa positiva, o subestimando la enfermedad mediante una solidaridad basada en la percepción del riesgo compartido. En las condiciones de un ambiente, que les provocara consecuencias sobre su salud psicológica y física, en uno u otro caso.
Como usted señala Mahmoud, las empresas pequeñas y medianas no tienen margen de readaptarse en esta transición a productos vinculados a la pandemia –como por ejemplo, la empresa Tesla, confeccionando respiradores artificiales; Louis Vuitton, Dior, Givenchy y Guerlain produciendo alcohol en gel, entre otros casos–, y a pesar de su importancia social y económica para asegurar la producción de alimentos y otros bienes y servicios esenciales – así como el acceso a ellos–, han tenido históricamente grandes dificultades para acceder al crédito.
La Agenda Regional de Desarrollo Social Inclusivo aprobada en 2019 incluye propuestas para avanzar en la garantía universal de un nivel de ingresos básico de ciudadanía. Con el objetivo de brindar seguridad alimentaria y cobertura de salud para evitar un grave deterioro en las condiciones de vida que profundice el malestar y desconfianza, y el riesgo de pérdida de cohesión social. La crisis financiera internacional de 2008 mostró la importancia del gasto público social contracíclico y de las políticas sociales orientadas a moderar los efectos de la crisis en las economías reales y frenar el aumento del desempleo y la pobreza.
En línea con lo mencionado, muchos gobiernos están reaccionando ante el daño económico que están padeciendo las PYMES debido a la pandemia. Asimismo el Sistema de Naciones Unidas para el Desarrollo reconfiguro su programa mundial SCORE utilizando una amplia red global para suministrar información y servicios pertinentes a las microempresas y PYMES. El mismo incluye programas de apoyo a las PYMES, formación específica del COVID-19 en materia de seguridad y salud en el trabajo.
Le comparto a continuación algunos link que contiene información respecto a programas y ayudas financiera a PYMES , esperando que pueda ser de su utilidad:
-http://www.sela.org/media/3219723/covid-19-resumen-de-las-principales-medidas-estados-miembros-sela.pdf
-https://www.alide.org.pe/wp-content/uploads/2020/05/Programas-de-emergencia-de-gobiernos-crisis-XI.pdf
-http://sice.oas.org/SME_CH/Newsletters/SICE_SME_CH_NL_COVID_19_s.asp
Le pido disculpas Mahmoud, por no brindar conocimientos respecto a sus interrogantes principales. Siendo central que la ciencia pueda anticipar si las medidas que se están tomando son las correctas? Y cuales son los mecanismos adecuados para gestionar la supervivencia de las PYMES ante el COVID 19?
Saludos y gracias.
As far as I know, this is not a high time for initiating a new startups. Even existing newly established startups are facing difficulties because of economic recession and high unemployment. This is the bizzare time where investors are reluctant to utilise their savings at any sector globally which limits the circulation of capital in a market. No one knows that what's next?
I think there will be a temporary (or somehow) complete shutdown for many SMEs if this pandemic exists more than a year.
Muhammad on surface your contention may look convincing .However l foresee a situation where many SMEs surviving and changing their lines of businesses that may not be affected with covid19 restrictions. For example those in hospitality industry moving into health care or nursing homes.
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