Challenges of small and medium enterprises during the COVID-19 pandemic: Case of Georgia
-
DOIhttp://dx.doi.org/10.21511/ppm.19(4).2021.02
-
Article InfoVolume 19 2021, Issue #4, pp. 20-28
- Cited by
- 3038 Views
-
1574 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The COVID-19 pandemic has had a significant impact on small and medium enterprises (SMEs). The purpose of this study is to assess the impact of the COVID-19 pandemic on SMEs in Georgia, identify the challenges of SMEs in pandemic conditions, and analyze government economic policy measures. For this purpose, 102 small and medium entrepreneurs from different regions of Georgia were interviewed. The survey was conducted by sending a questionnaire through digital channels. The results were processed using data analysis, quantitative and qualitative research methods, and presented graphically. As a result, key challenges and development directions that are typical for SMEs operations in Georgia during the pandemic were identified. For 60.8% of surveyed SME owners, lockdown is the main challenge. Sales volume of 45.1% of SMEs decreased. In addition, 39.3% of the surveyed SME owners increased the innovative capabilities of a company and 37.2% increased the sales volume of a company through digital channels. The main challenge of the pandemic, lockdown, gave impetus to a change in entrepreneurial behavior. In a pandemic, entrepreneurial activity has become more favorable through digital channels. During the pandemic, there is a need to continue the government’s program of tax incentives and subsidies for SMEs. In addition, the government should promote education in the fields of entrepreneurship, innovation, and technology.
- Keywords
-
JEL Classification (Paper profile tab)H12, L25, L26, L53
-
References32
-
Tables0
-
Figures4
-
- Figure 1. Main challenges of SMEs during the pandemic in Georgia (%)
- Figure 2. Changes in the SME sales volume of products/services since the start of the pandemic (%)
- Figure 3. Changes in the SME sales volume of products/services through digital channels since the start of the pandemic (%)
- Figure 4. Has SMEs innovation increased during the COVID-19 pandemic (%)?
-
- Adian, I., Doumbia, D., Gregory, N., Ragoussis, A., Reddy, A., & Timmis, J. (2020). Small and Medium Enterprises in the Pandemic: Impact, Responses and the Role of Development Finance (Policy Research Working Paper No. 9414). Washington, DC: World Bank.
- Bedianashvili, G. (2017). Formation of Knowledge Economy and Innovative Entrepreneurial Policy: Institutional Aspects. Globalization and Business, 3, 10-16. (In Georgian).
- Bortolini, R. F., Nogueira Cortimiglia, M., Danilevicz, A. d. M. F., & Ghezzi, A. (2021). Lean Startup: a comprehensive historical review. Management Decision, 59(8), 1765-1783.
- Dai, R., Feng, H., Hu, J., Jin Q., Li, H., Wang, R., Wang, R., Xu, L., & Zhang, X. (2021). The impact of COVID-19 on small and medium-sized enterprises (SMEs): Evidence from two-wave phone surveys in China. China Economic Review, 67, 101607.
- Dörr, J. O., Murmann, S., & Licht, G. (2021). The COVID-19 insolvency gap: First-round effects of policy responses on SMEs (ZEW Discussion Papers No. 21-018). Leibniz-Zentrum für Europäische Wirtschaftsforschung.
- Ebersberger, B., & Kuckertz, A. (2021). Hop to it! The impact of organization type on innovation response time to the COVID-19 crisis. Journal of Business Research, 124, 126-135.
- Enterprise Georgia. (2021). Annual Report 2020. (In Georgian).
- Erkomaishvili, G. (2016). Small Entrepreneurship Supporting Economic Policy in Georgia. International Conference on Economics, Business and Marketing Management. Paris, France.
- Faltin, G. (2018). Entrepreneurship: Problemlagen und Handlungsansätze. In Handbuch Entrepreneurship (pp. 3-36). Springer Gabler. (In German).
- Fritsch, M. (2019). Entrepreneurship: Theorie, Empirie, Politik. Springer-Verlag GmbH. (In German).
- Government of Georgia. (2016). Small and Medium Entrepreneurship Development Strategy of Georgia for 2016–2020. (In Georgian).
- Juergensen, J., Guimón, J., & Narula, R. (2020). European SMEs amidst the COVID-19 crisis: assessing impact and policy responses. Journal of Industrial and Business of Economics, 47, 499-510.
- Kollmann, T. (2018). E-Entrepreneurship: Unternehmensgründung in der Net Economy. In Handbuch Entrepreneurship (pp. 181-199). Springer Gabler. (In German).
- Kuckertz, A., Brändle, L., Gaudig, A., Hinderer, S., Reyes, C. A. M., Prochotta, A., Steinbrink, K. M., & Berger, E. S. C. (2020). Startups in times of crisis – A rapid response to the COVID-19 pandemic. Journal of Business Venturing Insights, 13, e00169.
- Maglakelidze, A. (2019). Development of Small and Medium Entrepreneurship and Formation of a Middle Class in Georgia. Globalization and Business, 7, 123-129. (In Georgian).
- Marona, B., & Tomal, M. (2020). The COVID-19 pandemic impact upon housing brokers’ workflow and their clients’ attitude: Real estate market in Krakow. Entrepreneurial Business and Economics Review, 8(4), 221-232.
- Miller, T., Kim, A. B., & Roberts, J. M. (2020). 2020 Index of Economic Freedom. The Heritage Foundation.
- Ministry of Finance of Georgia. (2020). Annual Report 2020. (In Georgian).
- Muller, P., Robin, N., Jessie, W., Schroder, J., Braun, H., Becker, L. S., Farrenkopf, J., Ruiz, F. A., Caboz, S., Ivanova, M., Lange, A., Lonkeu, O. K., Mühlschlegel, T. S., Pedersen, B., Privitera, M., Bormans, J., Bogen, E., & Cooney, T. (2019). Annual Report on European SMEs 2018/2019. Brussels.
- National Statistics Office of Georgia (GEOSTAT). (2021). Statistical survey of enterprises.
- OECD. (2019). Monitoring Georgia’s SME Development Strategy 2016–2020. Paris: OECD Publishing.
- OECD. (2021). One year of SME and entrepreneurship policy responses to COVID-19: Lessons learned to “build back better”.
- Office of the United States Trade Representative (USTR). (2021). Small Business.
- Papadopoulos, T., Baltas, K. N., & Balta, M. E. (2020). The use of digital technologies by small and medium enterprises during COVID-19: Implications for theory and practice. International Journal of Information Management, 55, 102192.
- Papava, V. (2020). Features of the Economic Crisis Under the COVID-19 Pandemic and the Threat of the Zombie-ing of the Economy. Bulletin of the Georgian National Academy of Sciences, 14(3), 128-134.
- Pioch, S. (2019). Digital Entrepreneurship: ein Praxisleitfaden für die Entwicklung eines digitalen Produkts von der Idee bis zur Markteinführung. Springer Gabler. (In German).
- Šebestová, J., & Sroka, W. (2020). Sustainable development goals and SMEs decisions: Czech Republic vs. Poland. Journal of Eastern European and Central Asian Research (JEECAR), 7(1), 39-50.
- Slusarczyk, B., & Pyplacz, P. (2020). Industry 4.0 in Polish SMEs in the Aspect of Innovation Possibilities. International Journal of Economics and Finance Studies, 12(2), 255-270.
- Thierry, T., Mihai, Ț., & Timber, H. (2020). Effects of COVID-19 on Business Models in Romania and the Netherlands, A Digitalization Perspective. Studies in Business and Economics, 15(3), 115-131.
- Thukral, E. (2021). COVID-19: Small and medium enterprises challenges and responses with creativity, innovation, and entrepreneurship. Strategic Change, 30(2), 153-158.
- World Bank Group. (2020). Doing Business.
- Yoshino, N., & Hendriyetty, N. (2020). The COVID-19 Crisis: Policy Recommendations for Japan. The Economists’ Voice, 17(1).