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OECD SME and Entrepreneurship Outlook 2021

image of OECD SME and Entrepreneurship Outlook 2021

Small and medium-sized enterprises (SMEs) and entrepreneurs have been hit hard during the COVID-19 crisis. Policy responses were quick and unprecedented, helping cushion the blow and maintain most SMEs and entrepreneurs afloat. Despite the magnitude of the shock, available data so far point to sustained start-ups creation, no wave of bankruptcies, and an impulse to innovation in most OECD countries. However, government support has been less effective at reaching the self-employed, smaller and younger firms, women, and entrepreneurs from minorities. Countries were not all even in their capacity to support SMEs either. As vaccine campaigns roll out and economic prospects brighten, governments have to take the turn of a crisis exit and create the conditions to build back better. The OECD SME and Entrepreneurship Outlook 2021 brings new evidence on the impact of the crisis and policy responses on SMEs and entrepreneurs. It reflects on longer-term issues, such as SME indebtedness or SME role in more resilient supply chains or innovation diffusion. The report contains country profiles that benchmark impact, factors of vulnerability, and sources of resilience in OECD countries, and give a policy spotlight on liquidity support and recovery plans for SMEs.

English Also available in: French

SME and entrepreneurship performance in times of COVID-19

The restrictions imposed to contain the COVID-19 pandemic triggered the most severe global recession in the post-war period. The majority of small and medium-sized enterprises (SMEs) either had to close operations or faced significant falls in revenue. Even though the adoption of digital technologies is more difficult for smaller firms, online sales helped to contain reductions in revenue for a number of SMEs. In addition, policy responses were quick and strong overall and they largely contributed to avoid a wave of bankruptcies so far. SMEs in the sectors most impacted by lockdown measures and those with significant reductions in sales disproportionately benefitted from government support within countries. Nevertheless, there have been difficulties in reaching the self-employed, smaller and younger firms, and women and minority entrepreneurs. There are also significant cross-country differences in the proportion of SMEs receiving government support, in part reflecting institutional settings, effectiveness of delivery mechanisms and fiscal capacity. At the end of 2020, a large proportion of SMEs continued to express the need for additional support in the future, especially in countries with strict containment measures in place. Looking ahead, as the economic situation progressively normalises and support measures are unwound, governments will need to ensure that debt does not endanger viable firms, and that resources are reallocated from non-viable businesses.

English Also available in: French

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