Digitization as an Adaptation and Resilience Measure for MSMEs amid the COVID-19 Pandemic in Japan: Lessons from the Food Service Industry for Collaborative Future Engagements

Abstract

Restrictions and other stringent countermeasures due to the COVID-19 pandemic have wreaked havoc on many enterprises over the past few years. The effect on Micro, Small, and Medium Enterprises (MSMEs) is believed to be far-reaching. In most countries, the MSME sector provides the maximum number of jobs, and its resilience is core to the livelihood of that society; Japan is no exception to this. The food service industry was classified as an essential service during the pandemic, and advancements in technology and other digital innovations were seen as revolutionary to many enterprises to diversify their business models to reduce losses. This study reviews how MSMEs in the food service industry utilized technologies and innovations to adapt to the challenges and enhance their resilience. The paper reviews secondary datasets to discuss the perspectives of MSMEs and the impact of the pandemic, as well as utilizing Gotanda Eats as a case example in Japan to understand the method of digital adaption towards resilience. The Gotanda Eats platform was crucial for the survival of the five restaurants involved because it transformed their old business operations into the one that connects them to customers while observing infection prevention protocols. Despite the challenges that are visible in the delivery aspect of the platform, the operation shows that digitization and digital transformation are vital for MSMEs in times of crisis. The World Economic Forum 2021 report has focused on digital power concentration as a new risk, the current study shows that digitization in food-related MSMEs was a critical survival strategy. The study recommends that local authorities take a keen interest in supporting local businesses during hard times.