Authors: Leonidas Vatikiotis, Dimitrios Giakoulas, Antonios Aggelakis

Title: Vulnerability and resiliency of Greek SMES during the COVID-19 pandemic crisis

Abstract

In our research we investigate the behavior of Greek Small and Medium Enterprises during the recent hygiene crisis. Concretely, we analyze time series of Hellenic Statistical Authority, Eurostat as well as surveys of Institute of Small Enterprises about the sales, profitability, liquidity, growth, and economic expectations of different size of SMEs. Our main finding is that their resiliency is analogous to their size (according to volume of sales and the number of personnel). Consequently, the current crisis exaggerated the polarization among the SMEs in Greece, deteriorating the situation of the self-employed and the very small enterprises, while at the same time improved the records of the bigger or the export-oriented ones.

In addition, the Covid-19 crisis led to a new, prototype kind of division: The emergence of a new kind of “survivors” originated on very special sectors of the economy, like the food sector. There was a horizontal division too among those enterprises that had a sufficient digital footprint before the eruption of the crisis, and those that hadn’t. Contrary to conventional wisdom and belief, the social distancing measures weren’t enough to push the digitalization of Greek enterprises. Obstacles like cost, the inexistence of an ambitious domination strategy, the deficit of experience and familiarity about digital transformation in family-owned enterprises, etc. resulted to the deepening of the digital gap.

The current pattern of division looks like the behavior of SMEs during the previous sovereign debt crisis. In the seat of over-debted now are sitting the enterprises that aren’t interested or choose to get digitalized. Similarities are greater if we take into consideration that the outcome of both crises has been a weaker economy, which is dependent much more than before in services and tourism and less on manufacturing or on synergies of primary with the secondary sector through clusters.

Our research extends to other European countries, highlighting the common structures among the countries of Mediterranean Sea.