5 out of 10 SMEs Say "COVID-19 Risk Management Needed"

Survey on Management Status of Small and Medium Enterprises and 2021 Management Plans
Less than 1 in 10 Companies (7.8%) Expect Positive Business Environment Next Year

Working scene at a mask manufacturing factory. Photo by Asia Economy DB

[Asia Economy Reporter Kim Heeyoon] It has been found that fewer than one in ten small and medium-sized enterprises (SMEs) have a positive outlook on the business environment for next year. More than half of SMEs identified risk management to mitigate the worsening business conditions caused by COVID-19 as their core strategy for next year.

The Korea Federation of SMEs announced the results of the "SME Business Conditions and 2021 Business Plan Survey" conducted on 500 SMEs on the 8th.

According to the survey, 66% of the responding companies answered that the spread of the novel coronavirus infection (COVID-19) this year had a negative impact on their business conditions.

Given the significant impact of COVID-19, the top priority in the 2021 core business strategies was strengthening risk management to prepare for the deteriorating business environment caused by COVID-19 (53.2%). Other responses included securing stable operating funds (42.4%) and discovering new clients and sales channels (38.0%).

Graph of 2021 Management Strategy Responses of Small and Medium Enterprises. Table = Korea Federation of SMEs

Regarding the 2021 business environment, 22.0% of SMEs surveyed expected it to worsen compared to this year, while fewer than one in ten (7.8%) expected it to improve.

The most useful policies related to COVID-19 response were emergency disaster relief funds (45.4%), followed by tax and four major social insurance reductions and payment deferrals (35.2%), expansion and maturity extension of SME loans (32.0%), and employment retention subsidies (30.4%).

Choomun Gap, Head of the Economic Policy Division at the Korea Federation of SMEs, said, “As the prolonged COVID-19 pandemic makes economic recovery prospects uncertain, efforts are required to support the economic recovery of SMEs and small business owners next year. It is necessary to implement various support policies in areas such as resolving labor issues and regulatory difficulties including the uniform 52-hour workweek system, revitalizing domestic demand, and providing financial, tax, and SME sales channel support.”

This content was produced with the assistance of AI translation services.