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SME involvement in healthcare innovation should be a top EU policy objective, since it can have a big impact on the economy, society, and people, as well as those who are patients. It is a part of the EU’s stated goals, as outlined in the European Commission’s Communications “Small Business Act” for Europe and “Small Business, Big World,” to promote the growth and expansion of Europe’s small businesses. Healthcare is worth more than EUR 250 billion, however innovative healthcare SMEs have struggled to get momentum despite this fact.
Impact on SMEs
In terms of both supply and demand, the coronavirus pandemic has a significant impact on the economy, particularly small and medium-sized enterprises (SMEs). Workers are unable to work because they are ill or must care for children or other dependents since schools are closed and individuals are unable to travel freely. Lockdowns and quarantines to contain the disease result in further and more severe capacity utilisation declines. There are also disruptions in supply chains that cause shortages of parts and intermediate products.
When demand and income for small and medium-sized enterprises (SMEs) dramatically and suddenly decline, it has a significant impact on their ability to operate and/or produces serious cash constraints. As a result, consumers’ expenditure and consumption are reduced due to the loss of income, fear of infection, and increased uncertainty that they feel due to these factors. Workers lose their jobs and businesses are unable to pay their employees’ salaries, which has a snowball effect. There is a decrease in business and consumer confidence due to a decrease in tourism and transportation. In general, small and medium-sized businesses (SMEs) are more vulnerable than larger corporations to “social distance.”
The virus’s influence on financial markets could lead to a further decrease in trust and a decrease in loans.
Safety and health responses in MSMEs
Despite their critical role in economic growth, small and medium-sized businesses (SMEs) frequently encounter significant difficulties in providing good labour. Poor and hazardous working conditions, as well as low-quality and low-skilled occupations, are all too common in these businesses. As a result of the financial crisis and the increasing number of MSMEs in global supply chains, investment in OSH has been put under further strain. Several empirical studies demonstrate that MSMEs are more likely to have greater rates of occupational injury and death than any other type of business, even though there is no single reputable source of information on this.
Small and medium-sized businesses (MSMEs) are prevalent in a variety of industries, but they are particularly prevalent in agriculture, construction, wholesale, hospitality, and cleaning. In some industries, such as construction, falls are more common, whereas in others, like cleaning and food processing, repetitive job exposure is more prevalent. Undeclared work affects these and other sectors the most in Europe, and there’s reason to suppose it’s the same in developing countries as well. A recent study has found that MSMEs may have the same degree of psychological health risk exposure as larger organisations. This is due to the combination of limited autonomy, repetitive work, high pressure, and inadequate assistance that characterises MSMEs.
Strong evidence demonstrates that working in MSMEs outside of the formal sector has a significantly higher risk of negative health outcomes than in their formal counterparts (Lund and Naidoo, 2016). In the informal economy, there is a higher incidence of occupational safety and health (OSH) risks since businesses are unregulated and unregistered, which means they are not subject to any legislative restrictions safeguarding workers in terms of working conditions, wages, and OSH. Informal economies, particularly in developing countries, lack social security coverage and are characterised by low levels of expertise, organisation and productivity, as well as low or irregular revenue.
Economic responses
Globally, the coronavirus pandemic has resulted in large-scale death and extreme human suffering. As a result of the worst public health catastrophe in recent memory, as well as a severe economic downturn brought on by the shutdown of manufacturing in the countries affected, falling demand and low investor confidence, the stock market has reacted severely. 3 The number of COVID-19 cases worldwide continues to rise at the time of this publication; however, lockdown and containment measures are gradually being eased in a number of OECD nations.
According to estimates made in April-June 2020, the worldwide economic recession precipitated by the pandemic is expected to be more severe than previously thought. There will be an estimated 6.6% drop in global GDP in 2020, with double-digit losses in some of the most affected nations, and a 2.8% recovery in 2021 if there is a second pandemic wave before the end of 2020. An earlier projection predicted that output may fall by as much as one-fifth to one-quarter in several economies, and consumer spending could fall by as much as a third as a result of the shutdowns.
The economic impact of the coronavirus pandemic has been anticipated by several additional international organisations in recent weeks. As of this writing, the International Monetary Fund’s (IMF) June 2020 Economic Outlook Update forecasts that global GDP will fall by 4.9 percent in 2020 (1.9 percentage points lower than the April prediction), before rebounding slightly, with growth of 5.4% in 2021. According to the June 2020 World Investment Report, worldwide foreign direct investment will fall by up to 40% in 2020 and by another 5%-10% in 2021. A spike in global unemployment of between 5.3 million (“low”) and 24.7 million (“high”) is predicted by the ILO as a result of COVID-19, indicating that “supporting business operations will be particularly difficult for Small and Medium Enterprises (SMEs).”. A 3% year-on-year reduction in world trade in goods was recorded by the WTO for the first quarter of 2020, and a further 18.5% decline is expected in the second quarter, resulting in a potential decline of 32% in 2020.
Conclusion
Everyone agrees that high rates of economic growth are good for economic and social growth and for reducing poverty. At the same time, it is becoming clearer that growth that reduces poverty depends on the quality of growth: how it is made up, how it is distributed, and how long it lasts. Recent scholarly assessments of growth agree that “the rate at which countries grow is largely determined by:
1) integration into the global economy via trade and investment;
2) their ability to maintain sustainable government finances and sound money; and
3) their ability to set up an institutional environment in which contracts can be enforced and property rights can be set up.
As globalisation moves forward, countries in transition and developing countries, as well as the businesses in those places, face big problems when they try to improve their human and institutional capabilities so they can take advantage of trade and investment opportunities. This is now one of the most important things on the global development agenda, and it has been a big part of the final statements of the most important international meetings in the past few years.
