The Press

Bright spots for small busi­nesses in the Covid-19 era

- Ku­nal Sawh­ney Business · Small Business · New Zealand · Auckland Region · Microsoft · Statistics New Zealand · Google · Xero · Telecom of New Zealand

It is hard to ne­glect that NZ small and medium en­ter­prises (SMEs) are hav­ing a tor­rid time nav­i­gat­ing the Covid-19 storm.

How­ever, in­stead of freak­ing out, Kiwi SMEs are pulling out all stops in turn­ing Covid-driven chal­lenges into mean­ing­ful op­por­tu­ni­ties.

From meet­ing liq­uid­ity short­fall to ad­dress­ing de­mand shocks, busi­nesses are mak­ing ev­ery pos­si­ble ef­fort to adapt to the new par­a­digm shift of the ecosys­tem. Need­less to say, gov­ern­ment-backed fi­nanc­ing schemes are play­ing an in­stru­men­tal role here.

No­tably, the re­cently pub­lished Small Busi­ness In­sights re­port by Xero demon­strated that small busi­ness rev­enue in New Zealand es­ca­lated 3.4 per cent year-on-year in Septem­ber 2020. Be­sides, the data in­di­cated that the av­er­age num­ber of jobs in the small busi­ness in­dus­try im­proved by 0.9 per cent in Septem­ber af­ter tum­bling 1.4 per cent in Au­gust.

The im­prove­ment in rev­enue and job fig­ures sur­faced at a time when NZ stepped up to ease all Covid-19 re­stric­tions out­side Auck­land in mid-Septem­ber. With en­tire coun­try op­er­at­ing at level 1 re­stric­tions since early Oc­to­ber 2020, a fur­ther uptick in small busi­ness prospects can be ex­pected in the months ahead.

Amidst this chang­ing land­scape, three promis­ing trends need closer at­ten­tion to chart out the growth curve of SMEs in the near term.

Ex­ten­sion of the Small Busi­ness Loan Scheme

In a bid to en­sure small busi­nesses’ ac­cess to the line of credit, the gov­ern­ment has de­cided to ex­tend the Small Busi­ness Loan Scheme to De­cem­ber 31, 2023. The scheme was ini­tially slated to end on De­cem­ber 31, 2020. This has now been ex­tended by three years, with the in­ter­est-free pe­riod of loans also in­creased from one year to two years.

Be­sides, the gov­ern­ment has planned to in­vest an ad­di­tional $311 mil­lion into the Flexi-Wage pro­gramme be­fore Christ­mas to help em­ploy­ers hire an ad­di­tional 40,000 un­em­ployed work­ers.

These ini­tia­tives are pro­jected to ac­cel­er­ate the na­tion’s eco­nomic re­cov­ery from its worst re­ces­sion in decades.

Tech-driven so­lu­tions

The use of tech-driven so­lu­tions has worked as a saviour for SMEs in adapt­ing to the chang­ing dy­nam­ics dur­ing the coro­n­avirus era. SMEs largely re­sorted to au­to­ma­tion and tech­nol­ogy to sus­tain their op­er­a­tional per­for­mance, es­pe­cially in the early stages of pan­demic re­sponse.

A re­cent Asia Pa­cific sur­vey by Mi­crosoft stated that about 62 per cent of NZ or­gan­i­sa­tions are ac­cel­er­at­ing dig­i­tal­i­sa­tion to ac­cord with the new re­al­ity. More­over, the sur­vey high­lighted that around onethird of NZ or­gan­i­sa­tions in­tend to fo­cus on in­no­va­tion over the next year to build re­silience and re­cov­ery.

All in all, tech-driven so­lu­tions are act­ing as a cat­a­lyst in pro­mot­ing a change in SMEs oper­a­tions dur­ing the post-lock­down pe­riod. This in­ter­ven­tion is ex­pected to de­liver mas­sive pro­duc­tiv­ity gains to small busi­nesses, thereby em­pow­er­ing growth in the NZ econ­omy over time.

Re­mote work­ing

Re­mote work­ing or flex­i­ble work­places is one of the most prominent changes brought by the pan­demic in the cor­po­rate world.

Data re­vealed by Stats NZ in Septem­ber 2020 in­di­cated that over 40 per cent of em­ployed work­ers did at least a part of their work from home in April and early May 2020. In fact, about 36 per cent of the work­ing pop­u­la­tion worked from home in June 2020 de­spite mov­ing from level 4 to 1 dur­ing the pe­riod.

To sup­port SMEs’ ef­fec­tive tran­si­tion to re­mote work­ing and fos­ter on­line pres­ence, Google and Spark New Zealand have lately un­veiled a vir­tual skills train­ing pro­gramme for SMEs. The pro­gramme is tar­geted to fo­cus on three core ar­eas, which com­prise get­ting busi­nesses on­line, reach­ing new cus­tomers via dig­i­tal chan­nels and pro­tect­ing on­line pres­ence.

While re­mote work­ing has brought sub­stan­tive ben­e­fits for both em­ploy­ees and em­ploy­ers in the pan­demic-stricken en­vi­ron­ment, ran­somware and cy­ber-crime at­tacks have also grown in tan­dem at an alarm­ing pace. The cur­rent sit­u­a­tion de­mands an ex­ten­sive and dili­gent work on the part of busi­nesses to­wards cy­ber­se­cu­rity im­prove­ment to lever­age the ben­e­fits of flex­i­ble work­places.

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