Sustaining Small Enterprises Through Digital Technologies in the Post-COVID-19 Era

Introduction

The outbreak of the Covid-19 pandemic has affected the well-being and health of individuals, businesses and economies across the globe. Due to the devastating nature of the pandemic, governments around the world implemented stringent policies like lockdowns, closures of physical operations of businesses, and reductions in working hours in order to contain or slow the spread of the virus (Bai et al., 2021; Coffie & Hinson, 2021; Papadopoulos et al., 2020). These measures have negatively affected economies and businesses worldwide to the extent that their long-term viability and survival are in question. For instance, according to Eurostat (2021)'s, the Eurozone has recorded the sharpest fall in GDP since 1995 to 3.8% due to the pandemic. The US economy also contracted by 19.2% as of the second quarter of 2020, the lowest decline since 1946. Economies in less developed countries were also not spared. Ghana's economy, for instance, grew by 1.7%, the lowest since 1992 (World Bank, 2021). Despite several economic recovery programmes, many economies are yet to recover from the devastating effects of the pandemic.

A critical analysis of events by scholars also shows that, though the outbreak of the pandemic has severely impacted several MSEs, those in developing economies are the major victims of the pandemic and its containment measures (Bai et al., 2021; Kimuli et al., 2021; Tweneboah-Koduah & Coffie, 2022). In other words, the containment measures had a more severe negative impact on MSEs compared to larger and global businesses. This has been attributed to the limited attention these enterprises give to digital technologies (Kimuli et al., 2021; Papadopoulos et al., 2020). Thus, businesses that primarily operate on a face-to-face contact basis with customers, usually in dilapidated structures with little or no attention to digital technologies, are the businesses that were mostly affected by the Covid-19 pandemic. The World Bank (2021) report on the devastating impact of Covid-19, for instance, shows that about 85% of MSEs (mainly in the informal sectors) in most emerging economies have either closed down or are struggling to survive in the post-Covid-19 world. For instance, the findings of Oduntan and Isere (2022) provide evidence to show that businesses operating online were less affected by the pandemic and its containment measures. These findings suggest that digitisation is a significant way businesses, particularly MSEs in developing economies, could be sustained or protected against natural disasters like Covid-19. As stated by past scholars (e.g., Bai et al., 2021), the challenges presented by the Covid-19 pandemic have taught an important lesson that adopting technological tools, particularly by micro and small enterprises, is critical for their survival and growth. Papadopoulos et al. (2020), for instance, argue that digitisation is simply a matter of survival in today's competitive marketplace and the post-Covid-19 world. Moreover, businesses that are hesitant to embrace digitisation may struggle for survival. This is because, with digitisation, firms can conduct most of their business transactions with customers, suppliers or intermediaries online with little or no physical contact.

In addition to contributing to the survival of businesses, digitisation also brings many significant benefits to firms, such as reducing transaction costs by providing better and quicker access to information and communication between staff, suppliers and networks (Kimuli et al., 2021). It also makes it easier for businesses to access resources like government services, which are rapidly being provided online, as well as finance (like peer-to-peer lending), training, and recruitment channels. Additionally, it encourages innovation and allows businesses to produce data and analyse their operations in novel ways to boost performance (OECD, 2021). The other benefits of digitisation include the potential of expanding beyond geographical reach and acquiring new customers, better engagement with customers, and efficient customer credit management.