Study on the impact of the COVID-19 crisis on SME digitalization efforts

Kosovo SMEs have been severely hit by the COVID-19 crisis and they do not expect a speedy recovery. Meanwhile, companies seem to be somewhat hesitant with further digitalizing their businesses, mainly due to lack of funds.

These are some of the main findings of a recent study about the impact of the COVID-19 crisis on micro, small and medium-sized businesses (SMEs) in Kosovo and, in particular, their digitalization activities. The study was conducted in the framework of the ACCESS project.

Almost all of the SMEs experienced a decline in sales/turnover and have decided to shorten working hours to try and keep their staff. SMEs’ reactions and strategies are mainly of a defensive nature. Besides reducing staff and working hours, many companies have also stopped investments and purchasing of inputs. A small number of SMEs have (temporarily) closed their business.

In the current COVID-19 context, about half of SMEs in Kosovo say their main goal is simply “to survive” without any particular strategy and a third say their main goal is to reduce costs. In terms of institutional support, compensation of employee salary has proved to be the most important government support measure. In general, support schemes facilitating access to finance are most popular and regarded as most useful among SMEs in Kosovo.

Kosovo SMEs seem to be somewhat hesitant with further digitalizing their businesses. Supporting digitalization efforts is most needed and most effective in areas where SMEs see immediate applicability. While obstacles identified to digitalization are costs, lacking skills and expert services, data protection.

The survey-based study interviewed 408 SMEs and was conducted in July 2020. It was intended to inform the design of the interventions of the ACCESS project with a view to the new and challenging economic conditions of 2020.

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