Challenges of small and medium enterprises during the COVID-19 pandemic: Case of Georgia

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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.

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    • 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 (%)?
    • Conceptualization
      Amiran Maglakelidze, Gulnaz Erkomaishvili
    • Data curation
      Amiran Maglakelidze
    • Formal Analysis
      Amiran Maglakelidze
    • Funding acquisition
      Amiran Maglakelidze, Gulnaz Erkomaishvili
    • Investigation
      Amiran Maglakelidze
    • Methodology
      Amiran Maglakelidze, Gulnaz Erkomaishvili
    • Resources
      Amiran Maglakelidze
    • Supervision
      Amiran Maglakelidze, Gulnaz Erkomaishvili
    • Validation
      Amiran Maglakelidze
    • Visualization
      Amiran Maglakelidze
    • Writing – original draft
      Amiran Maglakelidze
    • Writing – review & editing
      Amiran Maglakelidze, Gulnaz Erkomaishvili