Understanding the Effects of COVID-19 on SMES in the UK: Examples of Promising Practices

Norin Arshed, Jillian Ludwig, Sam Benson, Rebecca Rose Avill

Research output: Book/ReportCommissioned report


This report analyses the impact of the COVID-19 pandemic on small-medium-sized enterprises (SMEs) in the United Kingdom. The first case of coronavirus was confirmed in the UK in late January 2020. From that point, the virus spread throughout the country and around the world, impacting public health and the economy along the way. As the unprecedented situation sent the nation into lockdown, businesses were forced to adjust to a new way of operating. SMEs were forced to shut their doors, work from home, and adopt new strategies to survive the pandemic. While many firms were unable to withstand the challenges of COVID-19, several were able to adapt to the ongoing situation and not just only to survive, but also thrive during this time. This report analyses case studies of SMEs from a variety of sectors and regions throughout the UK to understand the challenges they faced and how they were able to overcome them despite the global pandemic.

Section one of this report explores the entrepreneurship and SME literature and the importance of SMEs to the economy. This section considers how COVID-19 has impacted the small business landscape both in the UK and around the world. Based on the literature review, several themes emerged whereby the pandemic has affected the functionality and finances of many SMEs, but highlights that some have seen a disproportionate impact. Furthermore, this section looks at the ways in which government has worked to counteract the negative effects of the pandemic and subsequent lockdowns through broad policy responses. This section concludes by addressing the ways in which SMEs have taken advantage of the pandemic and seized opportunities to strengthen and grow their markets.

In section two, we introduce and justify our methods of data collection, in which we are confident we have achieved a high degree of rigour. We sought to (a) ensure that the data collected were representative of regions and industries, (b) be transparent in how we collected the data to ensure our qualitative approach is consistent with the standards of good qualitative inquiry, and (c) ensure our methods of enquiry were based on word-for-word transcriptions of what participants thought, felt and said, and were based on rigorous standards of inductive analysis. In section three, we present our case studies and in section four, we discuss the case studies and allow for cross-case analysis. The final section discusses our recommendations which have been informed by the extensive data collected and from the literature review and, finally, we close by concluding the report by offering policy recommendations.

Based on the findings of the desk research and the case studies, the following overarching conclusions emerged:

Conclusion 1: SMEs were quick to react to the pandemic despite facing many challenges.

Conclusion 2: The challenges that SMEs faced comprised lack of incoming capital and urgency in accessing funds.

Conclusion 3: SMEs pivoted online; those that could not began seeking opportunities that they previously may have not considered.

Furthermore, given the findings, it is generally recommended that:

Policy recommendation 1: Policies should be inclusive of all viable small businesses.

Policy recommendation 2: The landscape of business support and advice requires a more holistic and less fragmented approach.

Policy recommendation 3: Quicker response times from government are required.

Policy recommendation 4: Digitalisation should be offered to all SMEs as a basic training and progression element of available support services
Original languageEnglish
Place of PublicationLondon
Publisher89 Initiative
Number of pages56
Publication statusPublished - 2021


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