Results of survey on impact of COVID-19 on companies
Business Call to Action (BCtA) in collaboration with SDG Accelerator, ImpactAim and Connecting Business Initiative (CBi) organized an online survey for enterprises in the first two weeks of April on how the COVID-19 crisis had impacted their business. A total 90 companies participated in the survey, responding to 17 questions about the impact on enterprises and their response to the crisis.
In terms of regional market distribution, 48 companies had operations in Asia and the Pacific, 29 in Africa, 20 in Latin America and the Caribbean, 20 in Western Europe and North America, 16 in Eastern Europe and Central Asia, and 9 were operating in the Arab States.
Of the 90 companies, 48 percent were small and medium-sized enterprises and almost 40 percent had been operating for less than 10 years. Agriculture and health were the most common sectors of activity by respondents at 20 companies each.
By and large, the pandemic has had a substantially negative impact on companies with more than half reporting negative or highly negative impact, in contrast, only 2 percent said the crisis had no impact on them.
Africa and Asia and the Pacific were the regions most affected by COVID-19. Although just 20 percent of the total participants had operations in Africa, 34 percent of them were negatively impacted by the pandemic. While 51 percent of companies in the Asia and Pacific region reported a negative impact while making up 34 percent of the survey participants.
The top hurdles faced by companies were disruptions in supply chain distribution at 20 percent, followed by disruptions in distribution channels at 18 percent and reduced customer demand due to lockdowns and restrictions of social gatherings at 18 percent as well.
However, all was not bleak for respondent companies. Companies working in the health sector reported some benefits. Of the respondent companies in the health sector, 55 percent said there were higher demands for their products or services.
Overall, when companies did report a positive impact, the highest response was due to an increase in demand for products and services at 36 percent, closer contact with regional or local governments at 30 percent and establishing new partnerships for 19 percent of the respondents.
In terms of adjusting to and responding to the crisis, the two most common actions undertaken by companies were asking staff to telecommute with 67 companies doing so, while 37 companies indicated some sort of postponement in investment in business. Of the 90 companies, only 3 saw a complete halt of business due to the outbreak.
When it came to assistance or help, more than two-thirds of companies were not aware of any government subsidies or tax benefits. Although, more than half of the companies did connect with other companies and networks for support during this time.
Impact on Inclusive Business Models
Of the respondents to the survey, 71 had an inclusive business model as part of their broader business and 13 were fully inclusive businesses. Of those with inclusive business models, 62 percent reported a negative impact on their business.
However, while the majority reported a negative impact, most advocated for inclusive business models in current times. Through comments in the survey, companies spoke of the need to invest in and increase awareness of inclusive business models as a strategy to reach low-income populations more vulnerable to the current health and economic crisis.
“It is obvious the weak are the hardest affected by the COVID-19 crisis…[as such] the timing for inclusive business models could not be more right,” wrote one company. “The time is now for a larger collective awareness for other ways of doing things, we hope the next normal after COVID-19 will be a more humane, inclusive system based on a more genuine form of solidarity and empathy where real value is created for everyone along value chains in the world.”
Similarly, another company spoke of hardships in business but the need to continue their inclusive business operations. While another wrote they were supporting clients through deferred payments. Yet another inclusive business was striving hard to “continue running supply chains and motivating employees and workers through preventive measures and remuneration,” during the crisis.
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