Half of Europe’s small businesses are facing bankruptcy within the next year. Small and Medium Enterprises (SMEs) represent 99% of all EU businesses and employ 2/3 of the EU workforce, so high bankruptcy rates would be absolutely devastating for the European economy. During lockdown, many in the SME sector have been kept going by government financial support; they have been forced to close physical premises, furloughing staff or (if they are able) moving online, offering services via websites, or through takeaways and deliveries.
Not all businesses can move online. Particularly when it comes to microbusinesses and SMEs, business owners may depend on physical storefronts (which they will likely continue to owe rent on) to provide goods and services to their customers. Local “brick and mortar” retail stores, for example, would find themselves competing with online giants such as Amazon if they were to move their operations online. Even if their business models are viable online, business owners (and their customers) may lack the digital skills needed to make the move, or they may not have the resources needed to invest (particularly in such a short timeframe). Furthermore, particularly in rural areas, internet coverage may be unreliable or limited.
Nevertheless, could technology provide a lifeline for some businesses? What needs to happen to make SMEs as resilient as possible, and to support them through the pandemic so they can continue to operate and earn a living?
Want to learn more about some of the challenges and opportunities for businesses turning to technological solutions during the pandemic? Check out our infographic below (click for a bigger version):
What do our readers think? We had a comment come in from Oliver pointing out that a greater reliance on remote working would mean Europe needs fast, reliable internet available across the continent (including in rural areas). Can we be confident Europe’s current internet infrastructure can support all the demands the pandemic is placing on it?
To get a response, we put Oliver’s comment to Dita Charanzová, a Czech MEP and Vice-President of the European Parliament. What would she say?
For another perspective, we also spoke to Selin Song, Vice President of EMEA Google Customer Solutions at Google. How would she respond?
We also put the same comment to Eline Chivot, Senior Policy Analyst at the Center for Data Innovation, whose work focuses on European technology policy issues and on how policymakers can promote digital innovation in the EU. What would she say to Oliver’s comment?
Next up, we had a comment from Paul saying he is worried about a “skills gap” in Europe, particularly for older workers. Is that something we should be concerned about?
How would Selin Song from Google reply? In her answer, she points to some of the schemes Google has been running in this area, including promoting free training on digital skills, Google for Small Business, and their AI for business checkup tool.
What would Eline Chivot from the Center for Data Innovation say to Paul?
Finally, how would Dita Charanzová, Vice-President of the European Parliament and MEP, respond to Paul’s comment on digital skills?
Can technology make businesses “COVID-proof”? Can Europe’s Internet cope with the demands the pandemic is placing on it? Should we be worried about a ‘skills gap’ in Europe? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!
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Reduce their taxes.
Do you really think companies on the verge of bankruptcy are going to be investing in new computer systems?
Michał, you would be very surprised, but that is basically the only thing they are investing to these days.
Gabor Molnar, I’m not really surprised, but that’s just the ones who can afford to. I am a freelancer (not registered as a business) and I can barely afford a new laptop. I’m sure Bill Gates is thrilled, though:
-“at least ten years of progress in forcing people to do things in a digital way will have happened in a two year period.” [Quote from audio recording of interview (but removed from transcript): 26’40”]
https://www.wired.com/story/bill-gates-on-covid-most-us-tests-are-completely-garbage/?fbclid=IwAR1rbH0CsnMiPaxDMLFEdWmST-XHsJKvld28rix5paBNlziRxRUd38lMfKk
Introduce a minimum citizen income…..
The existence of countless small businesses was the result of a hugely overinflated economy (this is true globally, not only in EU) and super inefficient resource management. What can be done? If we don’t want to fall in to a socialist era and do harm to other businesses, then not too much, however one thing that can be done (at least that is my opinion) is going for a model like in California: if your business is not something that requires licensing (guns, drugs/medicine) then just do it. No registration, no periodic taxation, you only pay an income tax once a year that you have to declare as anyone else would do. Stop the related bureaucracy completely and people will start much more activities without the fear of failure.
No, technology isn’t going to save most of them. Either support them financially through the crisis or establish a SME investment fund to restart business after the crisis is over.
Technology can definitely provide a much needed lifeline to many businesses. Just look at the number of shops that have moved their operations online. Apps like Uber Eats and Deliveroo have enabled several restaurants to keep their heads above the surface.
No amount of tech can make businesses “Covid-proof” but imagine what would have happened had the pandemic struck in the fax era! The internet has kept a large number of companies in business.
Depends on the nature of the business, in my case the answer is yes. We’ve kept going remotely, working from home.
As much as I hate all these Zoom calls, we can still meet and keep our trade going.
Look at the stock price of all major tech companies since Covid kicked in. They’ve all shot up which means tech has played a major part in keeping the global economy ticking over.
There is no slack in the system. Today’s global supply chain chaos demonstrates how we have prioritised efficiency over resilience.