2.1 Impact of Covid-19 lockdowns on SMEs
All manner of businesses has been negatively affected by Covid-19 lockdowns: restaurants, supermarkets, fitness centers, traditional food markets, cinemas, car dealerships, or any operation which requires physical space as opposed to online markets. Countries’ investment, trade, and economy have all been affected by the pandemic (Gössling et al., 2020), culminating in a decreased cash flow due to lesser consumer demand (Priyono et al., 2020).
Verma and Gustafsson (2020) analyzed 107 published papers in Scopus, then summarized the business situation during Covid-19 lockdown into four categories: overall impact on business, technology, supply chain management, and service industry. Over 5,800 small businesses were surveyed by Bartik et al. (2020b). The results highlighted huge numbers of layoffs, closures, financial loss, and funding expectations. A qualitative study using interviews, conducted by Nyanga and Zirima (2020), found that SMEs encountered disrupted operations and employees’ layoff due to Covid-19. Seetharaman (2020) agreed that decreased revenue in small businesses led to employees losing their jobs. Lu et al. (2020) assessed 4,807 SMEs in China by conducting online surveys and interviews. Their study indicates SMEs’ operational problems were due to unavailability of materials, supply chain disruptions, unavailability of workforce, reduced market demand, and cash flow. Belghitar et al. (2021) examined the performance of a further 42,401 SMEs across 28 industries during Covid-19 with research indicating that 59% of the UK’s SMEs will have negative earnings unless the government funds them. SMEs in Serbia were investigated by Beraha and Duricin (2020). The empirical analysis of online surveys showed the impact on SMEs’ daily operations having varying intensity due to lockdowns. Scottish SMEs showed loss of revenue and the need for financial assistance for enterprises with higher risk of bankruptcy and closure (Brown, 2020). Antonescu (2020) highlighted impacts on the Romanian SME sector. Pakistan’s SMEs are forecast for slow growth, higher costs of production, and a more intense impact due to the pandemic lockdowns (Javed and Ayaz, 2020).
A survey of 748 Malaysian SMEs by Ratnasingam (2020) on the Covid-19 assessment reported financial management and supply chain disruptions as the major challenges. Robinson and Kengatharan (2020) interviewed 14 SMEs in Sri Lanka, with the result indicating material shortages, a decline in the global and local demand for products and services, difficulties when repaying loans and interest, order cancellations, and a lack of savings. The 456 households and 144 small firms from both urban and rural areas in Nord Kivu underwent telephone surveys by Desbureaux et al. (2020). The analysis found a decline in economy. In short, thousands of SMEs are in the process of closure. We suggest, for a start, communication between entrepreneurs and local or central authorities, increasing the guarantee ceiling, and higher flexibility between funds, private, and public investments.
2.2 Technology as a survival strategy adopted by SMEs
While reviewing the literature that examined the strategies and role of technology in SME survival, we identified the following studies. A study into how business strategies are affected by differences in gender, age, education, and income level was undertaken by Untaru and Han (2021), concluding with the suggestion that retailers should develop dissimilar communication strategies for different customer segments, in accordance with these targeted demographic profiles. The intention would be to increase protective measures against Covid-19, endure the pandemic and avoid too many losses. Thorgren and Williams (2020) conducted a study on 456 struggling SMEs to explore the survival strategies adopted during Covid-19. The result demonstrates that SMEs deferred investments, reduced labor costs and other expenses, and negotiated contracts and terms. Survival strategies adopted by Malaysian SMEs because of Movement Control Order (MCO) were examined by Omar et al. (2020). The qualitative analysis of six telephonic interviews indicates changes in financial and marketing approaches.
Fitriasari (2020) presented a business model for SMEs to handle pandemics. This model consists of product excellence, public behavior, and process reliability. It highlights factors necessary for digital transformation as digital skills, infrastructure testing, and tools adoption. Hussain, Shahzad et al. (2021) assessed the impact of technological (relative advantage and technology readiness), organizational (cost of adoption and top management support), and environmental (government support and competitive pressure) factors on B2B e-commerce for manufacturing SMEs in Pakistan. The multi-group analysis of the collected data predicted significant impact of technological factors on B2B e-commerce. In the Indonesian SMEs’ business model, Priyono et al. (2020) investigated changes and digital transformations with the help of a multiple case study involving seven manufacturing enterprises. Observations, interviews, and field visits were used as techniques. The result demonstrated dissimilar degrees of digital transformation in SMEs with a high level of digital maturity, those experiencing liquidity issues with a low level of digital maturity, and the SMEs that have a very limited level of digital literacy.
Big data analytics is the technology designed to economically extract value from massive volumes of a wide variety of data by enabling high-velocity capture, discovery, and analysis (Khan and Al-Badi, 2020a). This technology facilitates innovative and customer-centric post-sale services and offers feedback for better product design and marketing (Akpan et al., 2020). Big data and predictive and visual analytics enable complex business decisions, while Artificial Intelligence (AI) involves learning, reasoning, and self-correction. Computer Vision is an essential enabling technology that sensibly enhances the outcomes, acting as a unifying element in many applications and a facilitator and integrator of other techniques (Khan and Al-Habsi, 2020). As recently as this year, Luo (2021) conducted a study using Deep Recurrent Neural Network (DRNN) on clickstream information for exploring the effect of social networks and online shopping behavior on E-Business performance during the pandemic. Results showed that this deep learning technique is effective in modelling consumer behavior, and the model was able to improve the profitability ratio by 98.5%, the performance ratio by 97.5%, the accuracy ratio by 96.7%, the prediction ratio by 97.9%, and give less error rate than the other approaches by 11.3%.
Although Papadopoulos et al. (2020) presented an opinion paper and discussed the research on the role of digital technologies in improving productivity and performance in SMEs during Covid-19, they argued limited research on the use and adoption of these technologies to deal with the challenges of the crisis. Their paper further highlights issues of infrastructure, finance, skilled workforce, and security constraints. After proposing a digital transformation and sustainability framework for SMEs to handle pandemics. Winarsih et al. (2021) reported lack of knowledge amongst the enterprises on the benefits of digital skills. The leaders from 15 Indian hi-tech start-ups from various industries were interviewed on understanding the role of technology in business survival, in a case study by Jha (2020). The result indicates acceptance of new technologies and major transformation in the business model. Marin Bustamante (2020) reviewed the literature on the role of new technologies (big data and analytics, artificial intelligence, mobile payments, internet of things, and block chain) in business during the lockdowns. The review revealed that 65 papers published from 2011 to 2020 show no study on the influence of new technologies in firms' internationalization in the context of the Covid-19 pandemic. Dwivedi et al. (2020) examined twelve subject experts’ views on Covid-19 and information management research and practice. These specialists presented different perspectives regarding digital strategy, artificial intelligence, information management, social interactions, cyber security, big data, block chain, privacy, mobile technology, and strategy. IoT refers to the connections of machines, computers, and people enabling intelligent industrial operations for transformational business outcomes, with benefits closed-loop design, increased consumer value, predictive maintenance, new service lines, and reduced labor cost (Khan and Al-Badi, 2020b; McKnight, 2017). The paradigm of cloud computing enables the leasing of computing resources in real-time, with minimal interaction with the provider for cost-saving, seamless implementation, and simplification (Attaran and Woods, 2019; Thames and Schaefer, 2016).
During the Covid-19 crisis, FinTech companies helped workers, entrepreneurs, and entire economies. Smeets and Zeisberger (2020) argued the benefits and use of FinTech in Latin America during this period. Simultaneously, in Saudi Arabia, Salem and Nor (2020) investigated consumer intention to adopt e-commerce. The research empirically identified factors of perceived lack of alternatives, perceived behavioral control, and government support, which significantly influence the embracing of online spending. In Bangladesh, 665 consumers were surveyed on the attitude of digital marketing of branded cosmetics, and Akter and Sultana (2020) discovered a positive attitude towards digital platforms during the lockdown. Commerce and business involve a transaction of goods and services between buyers and sellers, as defined by Alharbi and de Doncker (2019) and Taleby Ahvanooey et al. (2020), while E-business is described as an Internet based transaction (Galindo-Martín et al., 2019). Social media and E-commerce shops have seen growth during the pandemic and consumers regularly searched for essential products online. Companies are using social media and online techniques to distribute product information for sales and to predict revenue trend (Lv et al., 2020). The effectiveness of a social network-based E-business strategy is measured by how well consumers use retreats, likes, and shares to engage with the company’s advertisements. Social networking is used in advertising and promotional activities (Sathishkumar et al., 2020) and online marketing (Kumari et al., 2020).
Through necessity, the shopping habits of various regions have changed (Bartik et al., 2020a; Bartik et al., 2020b) and digital transformation requires moving from offline stores to online, for consumer health, safety, and convenience. Fletcher and Griffiths (2020) suggested technology as the best solution for business sustainability during the pandemic. It is important for companies not to look at Covid-19 as an obstacle, since adoption of online digital channels can increase their promotion and sales (Doyle and Conboy, 2020). Each business, whether large or small, is crucial for the economy and therefore their sustainability, by adopting technologies, is essential in the current and future environment (Ameen et al., 2021).