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The COVID-19 pandemic has had a significant impact on small and medium enterprises (SMEs). The purpose of this study is to assess the impact of the COVID-19 pandemic on SMEs in Georgia, identify the challenges of SMEs in pandemic conditions, and analyze government economic policy measures. For this purpose, 102 small and medium entrepreneurs from different regions of Georgia were interviewed. The survey was conducted by sending a questionnaire through digital channels. The results were processed using data analysis, quantitative and qualitative research methods, and presented graphically. As a result, key challenges and development directions that are typical for SMEs operations in Georgia during the pandemic were identified. For 60.8% of surveyed SME owners, lockdown is the main challenge. Sales volume of 45.1% of SMEs decreased. In addition, 39.3% of the surveyed SME owners increased the innovative capabilities of a company and 37.2% increased the sales volume of a company through digital channels. The main challenge of the pandemic, lockdown, gave impetus to a change in entrepreneurial behavior. In a pandemic, entrepreneurial activity has become more favorable through digital channels. During the pandemic, there is a need to continue the government’s program of tax incentives and subsidies for SMEs. In addition, the government should promote education in the fields of entrepreneurship, innovation, and technology.
The COVID-19 pandemic has had a significant impact on small and medium enterprises (SMEs). The purpose of this study is to assess the impact of the COVID-19 pandemic on SMEs in Georgia, identify the challenges of SMEs in pandemic conditions, and analyze government economic policy measures. For this purpose, 102 small and medium entrepreneurs from different regions of Georgia were interviewed. The survey was conducted by sending a questionnaire through digital channels. The results were processed using data analysis, quantitative and qualitative research methods, and presented graphically. As a result, key challenges and development directions that are typical for SMEs operations in Georgia during the pandemic were identified. For 60.8% of surveyed SME owners, lockdown is the main challenge. Sales volume of 45.1% of SMEs decreased. In addition, 39.3% of the surveyed SME owners increased the innovative capabilities of a company and 37.2% increased the sales volume of a company through digital channels. The main challenge of the pandemic, lockdown, gave impetus to a change in entrepreneurial behavior. In a pandemic, entrepreneurial activity has become more favorable through digital channels. During the pandemic, there is a need to continue the government’s program of tax incentives and subsidies for SMEs. In addition, the government should promote education in the fields of entrepreneurship, innovation, and technology.
Given the modern global conjuncture, technological innovation and creative thinking play a major role in the process of implementing entrepreneurial activities. The rapid development of digital technologies and the emergence of diverse digital platforms have given impetus to the transformation of entrepreneurial behavior and the conduct of entrepreneurial activities from the real - to the virtual environment. In the modern digital world, there is no alternative to technological entrepreneurship. 5G network, blockchain, 3D printing and other technological innovations make business processes faster, more reliable and flexible. The generation and implementation of continuous innovative ideas in technology has led to the emergence and development of information technology, digital technology, digital platforms, on which the modern form of entrepreneurship - digital entrepreneurship is based. One of the obstacles to the development of digital entrepreneurship in Georgia is the lack of proper access to digital technologies. At the same time, the population of Georgia has not yet developed the digital culture and skills that ensure the implementation of commercial activities in the virtual space. According to the National Statistics Office of Georgia in July 2019 in the country: 70.6% of households actively used the Internet, only 20.8% of them purchased goods and/or services through digital channels. In 2018, only 3.2% of enterprises received an order through the website. These data indicate the low level of Internet use by the public and, consequently, enterprises for commercial purposes. This untapped segment, at the same time, creates a solid potential for further development of digital entrepreneurship. Especially today, when physical mobility is restricted due to the worldwide pandemic COVID-19. Innovations and technologies are the main driving forces of modern entrepreneurship. Therefore, the emphasis of the Government of Georgia in this direction and the launch of appropriate economic policy instruments should positively support the transformation of the entrepreneurial environment and entrepreneurial behavior in the country. Given the current situation in Georgia, in order to identify and develop digital entrepreneurial opportunities, it would be appropriate to take the following measures: First, the state must ensure that more people have access to the Internet and digital technologies; Second, increase the scale of financial support programs for innovative and digital entrepreneurial initiatives, also, to help startups attract funding sources, to consult on opportunities to attract venture investments, to make it possible to implement a more technologically innovative idea; Third, primacy should be given to Georgian universities in the fields of entrepreneurship, innovation and technology, computer science; Fourth, the network of innovation centers should be expanded and similar educational spaces should be created to ensure the development of technical and entrepreneurial skills of the population (especially the rural population) in the field of innovation and technology.
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