Almost 60% of entrepreneurs in India predict a long-term positive impact of COVID-19 on their businesses, a report has found.
The report by researchers from the University of Strathclyde and King’s College London found that, despite nearly a third of SMEs being forced to lay-off staff, more than half were able to capture new business opportunities during lockdown.
The researchers surveyed 107 entrepreneurs to discover the short and long-term consequences of COVID-19 on small business in India as part of a larger global study carried out across 23 countries.
SMEs contribute one-third of India’s GDP and employ 110 million people but were put under significant stress as a result of nationwide COVID-19 lockdown restrictions in 2020 lasting more than two months, followed by gradual easing of measures.
The researchers found that while almost half (49.5%) of entrepreneurs said the very existence of their business was under threat – with delays in customer payments and difficulties meeting running costs cited – less than a third had applied for government support.
However, 72% of entrepreneurs had adapted their plans for their business – half of them doing so by the end of March 2020 – and almost 60% believe their business will survive, with 85% expecting to hire employees over the next five years.
Entrepreneurs cited benefits to their business due to digitisation, consumer behaviour change, new business opportunities and efficiency and resilience gains.
The report also found that Indian entrepreneurs’ life satisfaction and perceived stress were comparable to before the pandemic, as many had made lifestyle changes, including daily exercise of at least 30 minutes (69%), getting sufficient sleep (58%) and practising yoga or meditation (45%).
And despite the survival of their businesses being at stake, 61% gave personal money, 52% volunteered their personal time and nearly 66% volunteered their business services or products for good causes.
Dr Sreevas Sahasranamam, Chancellor’s Fellow at the Hunter Centre for Entrepreneurship at Strathclyde Business School and lead author of the report, said: “Our survey paints a picture of short and long-term opportunities but also vulnerability of Indian SMEs and entrepreneurs in the COVID-19 pandemic.
“Many face real challenges to sustain their business going forward but we find four trends for the post-COVID economy that can help Indian SMEs to thrive: digitalisation; multi-sectoral collaboration; localisation; and prominence of inclusive businesses and support structures.
Indian entrepreneurs and SMEs hold significant promise for a sustainable and inclusive post-COVID recovery, and India’s march towards a $5 trillion economy by 2025.”
Compared to other Asian countries 49.5% of Indian entrepreneurs perceived a lower existential threat posed by the pandemic than those in China (95.3%), Bangladesh (91.6%) and Pakistan (71.7%).
Nearly half of the Indian entrepreneurs saw new business opportunities despite of the pandemic, while less than 20% of entrepreneurs in Bangladesh, Pakistan and China noted new business opportunities.
Social commitment of entrepreneurs is another common attribute among Asian countries, with Bangladesh and India taking the top two spots globally for volunteering their business services during the pandemic.
The global study was funded from the European Union’s Horizon 2020 research and innovation programme and was led by King’s College London’s Professor Ute Stephan and Dr Przemyslaw Zbierowski in collaboration with Dr Sahasranamam.
Professor Ute Stephan, Professor of Entrepreneurship at King’s Business School, commented: “Entrepreneurs are known for their agility and this was also true during the Covid-19 pandemic. Globally we saw over two thirds of entrepreneurs adapting the plans for the business and 40% seeking out new opportunities. While the stresses of the pandemic are clearly visible for the entrepreneurs and their businesses, there is also much resilience and thus hope for a thriving post-covid economy.”
Dr Zbierowski added: “We saw that engaging in self-care behaviours and giving back to the community were two of the ways in which entrepreneurship globally coped with the stresses of the pandemic.”