The Impact of COVID-19 on Small Businesses’ Performance and Innovation

Abstract

This study looked at the impact of the Coronavirus Disease 2019 (COVID-19) pandemic on the revenues of small businesses operating in industrial sectors and at the extent to which these businesses changed or adjusted their business activity, or changed the extent to which they utilized open innovation tools and implement innovation promotion processes. The findings show that, despite COVID-19’s far-reaching impact in all areas of life, the revenues of most small businesses in industrial sector were not adversely affected by the pandemic, and most of them did not change or adjust their business activities or the extent to which they employed open innovation tools and engage in innovation promotion processes. The findings also indicate that small businesses, most of whose revenues derive from subcontracting work to other businesses business to business (B2B) and from long-term agreements, are likely to cope better during periods of economic difficulty and under conditions of economic uncertainty. The findings also show that businesses that are active in the international markets have succeeded in adapting that activity to the changing demands and various trade restrictions. This study’s theoretical contribution lies in its focus on small businesses in the industrial sector and its examination of how the subcontracting strategy and international operations help such businesses contend with problems and conditions of economic uncertainty. On the practical plane, the findings suggest that policymakers should foster programmes that assist small businesses with these work strategies, which can help them survive, enhance their stability and thereby also promote the economy’s ability to withstand crisis situations