Covid-19 has had major effects on SMEs within Canada and across the globe – both positive and negative. It is no secret that most businesses are struggling, with mandates forcing doors to close and consumers to stay home. Yet, research has shown that some businesses are adapting and creating innovative solutions to our current situation. Covid-19 has sparked a transformation of work, workers, and the workplace. What effects have the Covid-19 pandemic had on SMEs?
Many businesses have indefinitely closed or were forced to change their place of business. Companies such as 24 Hour Fitness, ALDO, Brooks Brothers, Davids Tea, and many more have closed a number of their stores as a result of the coronavirus. Since the beginning of the pandemic, 70% of small businesses have reported a decrease in revenue. This has been a result of necessary reduced hours, operational alterations, layoffs and not to mention the current state of the economy. In fact, across the country 41% of businesses had to lay off employees – some forced to lay off more than 80% of their staff. Consumer spending behavior has changed drastically as well. Prioritizing essential goods to ensure there are necessary goods for lockdown. This meaning, industries such as food, retail, home entertainment, and e-commerce have grown exponentially. While others, such as travel and hospitality, have evidently decreased.
Although Covid-19 has had many negative effects, some businesses have taken it as an opportunity. 43% of small businesses have altered their business since March of 2020. Alterations include organizations pivoting their product or services to be offered online or simply having employees work remotely. The pandemic has evidently sparked innovation within many businesses to stay afloat. ‘Squadded’ was invented to provide the experience of shopping in the mall with family and friends as the pandemic did not permit so. This social e-commerce solution aims to supply a sense of connection to normality in a time of confusion. This is just one example of businesses that perceive Covid-19 as an opportunity for innovation. For example, Canadian distilleries have been using their resources to meet the demand and use their resources to produce hand sanitizer instead.
In the technology industry specifically, many advances being made. Since the beginning of the pandemic, artificial intelligence (AI) has increased by 30%. This is especially prominent in the healthcare industry. Jessica Watts from the automation company X-STK, says “Output increases, which means higher demand so those people that typically would have been doing the very repetitive, potentially dangerous jobs – you know with RSI [repetitive strain industry] and other things like that – actually, those people go on and be up-skilled, and they’ve got more rewarding jobs, and they’re doing things that have got more value.” With new regulations of workers having to do their jobs from home and a reduced number of staff members – there is an elevated demand for technology and AI. Read more about the opportunities and threats in tech advances here.
There is a new demand as technology is needed now more than ever. Forms of communication have been redefined to virtual meetings and emails. Productivity levels have been altered due to working conditions. Consumers’ wants have changed and in this time, businesses need to react and adapt to the social changes.
What does the future of small business in Canada look like? Fortunately, Canada has implemented the Economic Response Plan to help the small businesses which have been particularly affected by the crisis. This has the potential to help alleviate long-term negative effects within Canadian SMEs. With innovation and adaptations, there is a possibility that SMEs can have a promising future and expect growth. In this time of uncertainty, it is important to look at successful business leaders and what we can learn from them – in and outside of your industry. Post-pandemic we can expect work, workers, and the workplace to be altered indefinitely.