Key findings, as presented in the brief:
Impacts
- The COVID-19 pandemic has had negative impacts on enterprises of all sizes, and across all sectors. However, it has been particularly harmful to micro and small businesses.
- Four out of ten enterprises confirmed that they had laid off employees since the outbreak of the pandemic.
- The greatest economic burden on enterprises during the pandemic was rent (reported by 61 per cent), wages and social security payments (51 per cent) and payment of invoices (30 per cent).
- One in five enterprises confirmed that their debt grew. One-quarter of enterprises had bank loans; more than one-third had either supplier credit or informal credit from family or friends.
- Informal workers have faced the greatest burden, exacerbating vulnerabilities. Informal daily wage workers — comprising a large proportion of the workforce in the construction, agriculture, and tourism sector — were not able to benefit from social security payments.
Coping
- Most enterprises surveyed reported to be ‘just coping’ rather than proactively introducing new strategies or transforming business models.
- Overall, one-half of the surveyed enterprises did not introduce measures to sustain production and business continuity during the pandemic.
- 10 per cent of enterprises introduced e-commerce and online platforms.
Support
- The number of enterprises accessing and benefiting from government support mechanisms seems to have declined through the year.
- Most enterprises (90 per cent) did not benefit from government support.
Outlook
- Only four in ten enterprises (41 per cent) trust their economic resilience and feel confident that they will come through the pandemic as profitable and resilient businesses.
- The top three risk concerns expressed by enterprises in 2021 are reduced sales/demand, cash/liquidity problems, and loss of revenue.
Fafo’s researchers:
Tewodros Aragie Kebede,
Svein Erik Stave and
Åge A. Tiltnes.