The Coronavirus’ Impact on Small Businesses, Independent Performers, and Entrepreneurs

The pandemic due to the spread of the new coronavirus brings challenges at all levels, from the responsiveness of health systems and the social involvement to accompany the provisions, to the scope of strategies to protect the most vulnerable and mitigate the effects on the economy. The governments around the world are taking increasingly radical measures to slow the progress of the epidemic, the results we will see in the coming weeks, and even months.

Along with healthcare personnel's efforts on the containment front, scientists from universities and laboratories worldwide are in a race to develop a vaccine and antiviral medications. Likewise, various proactive citizens organize to provide solutions to the most urgent problems in the current context. While it is a time of uncertainty and solidarity, it is also a time of ingenuity and creativity. Thus, we seek to respond in an innovative way to the challenges that the pandemic brings us.

Small and medium-sized enterprises (SMEs) and innovative ventures, while hard hit by the impacts of this crisis, can also be part of the life-saving solution. What are we doing, and what can we do in the face of this emergency from the sector promoting innovation and SMEs?

SMEs, the most affected

Without a doubt, SMEs are among the business segments most affected by the pandemic. In turn, these companies have a key role in providing essential products and services for the population during the crisis.

The main impacts on SMEs have to do with a reduction in demand (national and international) and, therefore in their income, difficulty in accessing imported inputs, reduction or lack of labor, difficult access to financing and production processes that they are not adjusted to be operated remotely or automated.

These impacts differ by sector. For example, declining demand is a central problem for tourism and restaurants. Other sectors, such as textiles, Metalworking, and construction, may be more affected by less access to imported inputs or a lack of labor. The possibility of operating via telework is more accessible for some service companies (for example, technology companies), while for the more traditional sectors, this may be extremely difficult or impossible.

In the most affected regions, the response of governments to support SMEs in this emergency was immediate. In Europe and Asia, several countries have adopted a series of economic provisions that have to do mainly with the postponement of the payment of taxes and credits, the increase of guarantees for loans, and the granting of soft credits and subsidies.

Japan has set aside funds of US $ 15 billion, and France will allocate 2 billion euros to a solidarity fund for affected SMEs in the framework of a broader plan. The United States announced funds of at least US $ 250 billion for SMEs, as part of an economic stimulus package. In several LAC countries, similar measures were also announced and focused on establishing tax moratoriums, temporary reductions in contributions to pension systems, soft credit lines for SMEs, and renegotiations or deferrals of debt terms.

In the same way, the promotion and regulation of telework, job flexibility, licenses, and unemployment insurance are other policies that have been implemented and will become more and more frequent. All these first-rate economic measures aim to improve SMEs' financial situation and startups in the short and medium-term so that the shock can be softened and negative consequences such as loss of jobs or exit from the market can be reduced.

But we also know that there is a set of innovative enterprises and SMEs that can provide solutions and technologies for the health, social and productive challenges that we will continue to face in the short, medium and long term.

Technological solutions can resort in this need of the hour. Innovative technologies have surged during the pandemic which has drastically shaped our response to the crisis. More work is being carried out to control and neutralize the economic impact of the pandemic. We can quote an example of a media technology entrepreneur, Josef Kirk Myers II, who recently developed and released a mobile application targeting DJs.

Since social distancing means an end to public groups joining or gathering in one place, these performers are massively hit with a crisis. Tickets were returned, shows were canceled and revenues depleted. The app, called UJay rather aims to mitigate the crisis by allowing performers to sign up, relocate their fanbase on the app and hold virtual shows by taking requests and shout-outs via the app. DJs will receive fan requests which they can perform however they please.

UJay app is set to help DJs and more developments can help them grow in the virtual area of performances and music business.