The negative effects of Coronavirus on the labor market are evident. The unemployment rate is expected to increase, with devastating effects also in the next 2 years. Hence the importance of finding alternative solutions to deal with the crisis.
What will happen to SMEs? Our economic fabric is based on 4 million small and medium-sized enterprises which are currently at risk. In fact, only the more financially solid ones, which have more liquidity of their own or deriving from banks or investors, will resist. The other companies do not have a rosy fate: many will fail, others will go into crisis and will be forced to face a more or less long transition period, after which they will decide for their survival.
The most troubled market is, and will be, the tourism market. A big problem for our country, which bases a large part of its economy on this sector: we think of all the wealth deriving from the cities of art, naturalistic locations, events and fairs. Not to mention all tourism-related activities, such as restaurants, bars, shops selling products from the Made in Italy supply chain and so on.
In the other sectors a sort of “natural selection” will take place, only those agile companies that are capable of converting easily and quickly to digital will survive.
However, even when the virus is eradicated, there will remain many problems. Consumers will inevitably change habits: it is a matter of instinct, all human beings after a shock tend not to do what they did before. The same will happen after the Coronavirus: for example, if before the spread of the infection shopping could be an opportunity for recreation and relaxation, now it will feel much safer to shop online. So if a company is unable to adapt to new consumer habits, it is doomed to fail.
Faced with this situation, what can entrepreneurs do?
Our advice is not to try to stop an unstoppable avalanche. Change is already underway, so to survive it is important to know how to welcome the transformation. It is better to change the business model. Think of the restaurants used to filling a certain number of place settings; even after reopening they will have to increase delivery, making deliveries to offices or people who prefer to stay at home.
And if in some sectors it will be enough to change the business model, in others it will even have to change the market, competence, job and professionalism, and it will be necessary to do it in the shortest possible time. The possible ways are
- Bring everything you can online
- Sell online
- Digitize all possible processes
- Diversify your business to balance risks
- Defending liquidity
Companies and entrepreneurs will have to get used to thinking outside the box, constantly looking for alternative solutions. Our advice is to focus on the acquisition of new skills, new skills and new abilities, so as to create new jobs and new earning possibilities