Crisis forces Scottish smaller firms to adapt

The coronavirus crisis has spurred many Scottish smaller firms to sell more online; to introduce new products and services; and to use digital technologies to better manage their operations, according to research from the Federation of Small Businesses (FSB).

A survey of almost 800 Scottish businesses revealed that a fifth (20%) of Scottish businesses say that the coronavirus outbreak led to them adopting new digital technologies.

In their new report entitled ‘Finding our Feet: Small Businesses and the Coronavirus Outbreak’, FSB says that policymakers in Scotland should prioritise building on this ingenuity. But as Ministers in Edinburgh look to ease lockdown restrictions next week, the report warns that private nurseries might require extra support to re-open their doors.

About one in seven (15%) Scottish small businesses say they either started selling online for the first time or have expanded their online offering. And one in twenty businesses (5%) say the pandemic period has led to them introducing new services. Eight per cent say they’ve introduced new products.

To build on this trend, the small business campaign group argues that the Scottish Government should launch new initiatives to build vocational digital skills amongst Scottish entrepreneurs and workers. In addition, the research makes the case for a new drive to improve Scotland’s broadband and mobile coverage.

Andrew McRae, FSB’s Scotland policy chair, said: “Half of Scotland’s smaller firms had to close during this crisis, either because of the government restrictions imposed to tackle the virus or because their customer base completely dried up.

“But of the remainder, we see an impressive level of innovation and drive to keep sales and operations going. We’ve seen everyone from micro-breweries to local shops switch to home deliveries. We’ve seen yoga instructors offering remote classes and office-based firms embrace technology to stay in business.

“With silver linings in short supply during this difficult period, we must help firms build on this digital momentum.”

The document also argues that getting childcare re-opened is key to getting the wider economy back on its feet. However the organisation warns that private day nurseries may need financial support to help them comply as quickly as possible with new public health guidance.

Andrew McRae said: “As we look toward lockdown measures easing, many parents will be having sleepless nights about how they’re going to balance looking after their children with their other responsibilities.

“While Scottish small employers will offer flexibility wherever possible, the wider solution is to get schools and childcare providers up and running as soon as it safe to do so.

“Private nurseries play a key role in the provision of childcare. And their services are going to be important not only as we re-open the economy, but as the country looks to increase the availability of early years’ provision. But these locally important organisations now face tough restrictions about how they can operate.

“Local government and Ministers in Edinburgh need to help these smaller businesses – who play such a key role in their community – re-open safely as soon as possible, providing financial support if necessary.”

Small and medium sized firms sustain about half of Scotland’s private sector employment.