Positive Approaches and Practices for Sustainable SME Development in the COVID-19 Context

Positive Approaches and Practices for Sustainable SME Development in the COVID-19 Context

Elena Viktorovna Burdenko (Plekhanov Russian University of Economics, Russia) and Elena Vyacheslavovna Bykasova (The Moscow University of Finance and Law, Russia)
DOI: 10.4018/978-1-7998-7436-2.ch020
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Abstract

The chapter is dedicated to the research and analysis of positive practices implemented by small and medium-sized enterprises (SMEs) in Russia amid the COVID-19 pandemic. From 2016 to 2019, small and medium-sized business has most developed in such spheres as services, trade, construction, industrial production, and agriculture. The introduction of strict quarantine measures had a negative impact on the financial condition of all economic sectors; therefore, the most affected industries of the Russian economy have been identified. The chapter considers the positive practices used by SMEs operating in the affected industries such as tourism and hotel business, food service industry, and fitness industry. When the borders were closed and after the lifting of severe restrictions, domestic tourism saw the fastest development. The research that was carried out showed that amid strict isolation, only food service establishments that managed to adopt a new mode of services—connection to aggregators, organization of meals delivery to clients, take-away orders—were able to continue operating.
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Background

The COVID-19 pandemic had a serious impact on all the aspects of our life in all the countries across the world and became the primary reason for the development of the economic crisis. Small and medium-sized enterprises across the globe have suffered from the COVID-19 pandemic most. In April 2020, the United Nations (UN), the World Health Organization (WHO) developed and published a framework program of humanitarian response to save lives, protect people and rebuild better. The socio-economic response system proposed by the UN includes 5 areas of activity. One of the main areas is to support small and medium-sized enterprises as well as the employees of the informal sector (“A UN Framework for the Immediate Socio-Economic Response to COVID-19”, 2020). The global framework program includes a strategy and a plan of urgent socio-economic measures to respond to the crisis caused by the COVID-19 pandemic. Almost 18 billion dollars were allocated for the program implementation. The program is to be implemented within the next 12-18 months. The UN program calls on all the countries to consolidate efforts to overcome the crisis and enter the sustainable development trajectory.

China became the first country to suffer from the pandemic. Therefore, the research carried out by Jiang et al. (2020, p.7) on the financing of SMEs in China amid the COVID-19 pandemic is relevant. In their research, they analyze the direct and indirect support of SMEs through financial institutions. It was demonstrated that state support of SMEs turned out to be effective and helped avoid a sharp production decline and bankruptcy of companies.

The article by Ashifa (2020, p. 996) is dedicated to the development and economic situation of SMEs in India. It was shown that Indian SMEs contribute to the sustainable economic development of the country and employment creation, especially in agriculture. The analysis of SMEs in machinery manufacturing showed sustainability and competitiveness of enterprises in India.

Abdullah (2020, p. 1) carried out a research on the development of family entrepreneurship and SMEs in Kuwait. One of the factors of SME sustainable development is access to financing. Enterprises can secure funding both in common and Islamic banks. Despite the fact that Kuwait is an Islamic state, the majority of SMEs cooperate with common banks rather than Islamic ones.

Amid the COVID-19 pandemic, SMEs organized by female entrepreneurs in emerging countries may face the toughest consequences. Zeb & Ihsan (2020, p. 102342) studied the impact of innovations on entrepreneurship and productivity in SMEs owned by female entrepreneurs in Pakistan. The research included 261 SMEs from 15 Pakistani women chambers of commerce and industry. The research revealed characteristic features of female entrepreneurs who have impact on business activities and innovation. They make a conclusion that for sustainable SME development, the state needs to encourage and support female entrepreneurs.

Key Terms in this Chapter

Aggregator Platform: An electronic trading platform for the purchase and sale of goods and services. To organize its work, a technological platform is developed, featuring software, databases, a website, a domain name, etc. It prepares, sends, receives, stores, exchanges, or otherwise processes data (including provision of security) and ensures functioning of the network of sellers and customers involved in the sale of goods and services.

Fitness Industry: An area of activity that includes various enterprises providing sports and health services to people. Fitness industry enterprises are a sports and health club, a fitness club, a fitness center, a sport and fitness complex, etc.

Combo Sets: A set of several similar dishes. For example, from pizza, sushi, etc. Therefore, you can try several dishes at once. This promotion attracts customers and increases sales.

Franchise: It is the right to conduct business under the brand of another company, use its business model with a set of effective and approved operational standards, developments, and fine-tuned business processes.

Franchising: This is a mixed form of large and small business, where one party (the franchisor) transfers to the other party (the franchisee) for a fee in the form of a lump-sum payment the rights to a certain type of business, using the developed business model.

Set Menu: A set of several dishes (3 - 4 dishes), which are offered by a food service establishment for a fixed price. The purpose of the offered service is to give an opportunity to try gastronomic delicacies at an affordable price.

Food Service Industry: An area of activity which involves the production, sale of culinary products, food products, semi-finished products, as well as the organization of consumption of ready-made meals.

City With a Million-Plus Population: The category of cities where the population within the city limits is 1 million or more.

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