The impact of Covid-19 on Scottish small and medium-sized enterprises (SMEs) : prognosis and policy prescription

Brown, Ross (2020) The impact of Covid-19 on Scottish small and medium-sized enterprises (SMEs) : prognosis and policy prescription. Fraser of Allander Economic Commentary, 44 (2). ISSN 2046-5378

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    Abstract

    This paper highlights the impact of the Covid-19 pandemic crisis on Scottish small and medium-sized enterprises (SMEs). Covid-19 has created an enormous systemic economic shock, potentially surpassing the one created by the global financial crisis (GFC) in 2007/08 (Baker et al, 2020; Brown and Rocha, 2020). Such is the uniqueness of the current crisis some label it a metaphorical “black swan event” for entrepreneurship, as it encompasses virtually every sector, every type of business and every country spanning the global economy (Kuckertz et al, 2020). Indeed, empirical work from around the world shows that as many as half of all small firms have temporarily ceased trading since the lockdown and as many as 60% of SMEs are at risk of running out of their cash reserves (Bartik et al, 2020; Cowling et al, 2020; Giupponi and Landais, 2020).