Entrepreneurship and SMEs under COVID-19 crisis: A literature review

Abstract

The article aims to summarize the impact of the COVID-19 crisis on SMEs, considering both its positive and negative effects. Also, the study seeks to summarize the response approaches usable for SMEs to face a crisis. Research Design & Methods:This article uses a critical literature review to summarize the international literature developed on the COVID-19 crisis topic. It considers scientific papers published from 2017 to February 2022 with a focus on specific keywords, English language, from the open access sources on (i) Emerald, (ii) JSTOR, (iii) ScienceDirect, and (iv) Springer, (v) IER, and (vi) EBER. Findings: The paper sheds light on how the uncertainty caused by the COVID-19 crisis can impact SMEs. The paper tries to summarize the literature on how SMEs can reverse the uncertainty caused by a crisis and benefit from it. Also, the paper reviews the fact that some SMEs cannot cope quickly enough with the changes in the environment and forcibly shut down their business. The most damaging impact of the COVID-19 crisis is also reviewed in this paper which is the business closure due to lack of resources or disconnection of SMEs from their partners. Implications & Recommendations:This study provides an overview of the positive and negative effects that the COVID-19 crisis had on SMEs. Three approaches were reviewed, uncertainty, resilience, and opportunity, which the decision-makers can use to plan their strategies more effectively and face impending crises more efficiently. This paper also introduces gaps such as the lack of evidence of how COVID-19 affects the entrepreneurship phenomena, which is worth being studied. Contribution & Value Added:This study summarizes the three approaches mentioned in various research papers that SMEs can take during crises and presents gaps worth researching. While many other studies study entrepreneurship at macro levels, the approach in this study is unique as it considers a particular piece of entrepreneurship area and looks at it in terms of small and medium-sized enterprises, describes why COVID-19 is a crisis to the business environment and contributes to the literature to explain how entrepreneurship and SMEs are influenced by COVID-19 situation. I summarized some of the issues SMEs face during a crisis and mentioned the approaches to be taken by business owners during such times using articles conducted in the last five years.

Optimization of Entrepreneurship in Realizing the Profile of Pancasila Students at SMA Negeri 13 Pekanbaru Riau Province

“…According to (Munawar et al, 2023) essentially entrepreneurship is someone's thinking in producing innovative, creative innovations in the real world. Meanwhile (Zadeh, 2022) explained that entrepreneurship is someone who has an entrepreneurial spirit who applies this entrepreneurship in his life. People who have innovation and creativity in their lives (Ambarwati et al, 2023) explained epistemologically, entrepreneurship is one of a person's abilities to think creatively and behave innovatively which is the basis, resources, driving force, goals, strategies and tips in facing life's challenges.…”

The role of public aid and restrictions’ circumvention in SMEs’ pandemic survival strategies

“…Literature focused on SMEs strategies during the crisis on the actions of small and medium-sized enterprises says little about the role the circumvention of state-imposed restrictions or public support measures played in survival (Zadeh, 2022). However, many studies show that during the crisis, these actors tend to employ mixed adaptation strategies involving a combination of i) activity/scope-reducing measures (retrenchment), ii) those sustaining status quo (persevering) and iii) proactive actions, including innovative ones that permanently change their business models and iv) exit strategies (see e.g.…”

“…Despite the state and supranational introduction of many forms of help a large number of enterprises -especially small and medium-sized ones -found themselves on the verge of bankruptcy. For many of these enterprises, external aid was either unavailable or insufficient to survive the lockdown period without undertaking additional actions to survive (Kryeziu et al, 2022;Zadeh, 2022). In order to survive, some enterprises, in addition to legal adjustment measures of proactive (e.g.…”

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“…Pandemic time significantly affected management and organizations, that have to look for resilience and opportunities simultaneously take into account increasing uncertainty (Zadeh, 2022). According to the researchers, human behaviors patterns in organizations have changed after COVID-19 time (Machaczka, Stopa, 2022) and one of the most significant changes is that employees are more open to work remotely and they started to change their jobs more often than they did in the past.…”