Small and medium-size enterprises have been the lifeblood of the European economy. But more than half of those surveyed worry they might not be in business in 12 months.
Small and medium-size enterprises(SMEs) have been the lifeblood of the European economy, accounting for more than two-thirds of the workforce and more than half of the economic value added.1 Yet the results of a recent McKinsey survey, conducted in August, 2020, of more than 2,200 SMEs in five European countries—France, Germany, Italy, Spain and the United Kingdom—indicate just how hard their prosperity has been hit by the COVID-19 crisis.
Some 70 percent said their revenues had declined as a result of the pandemic, with severe knock-on effects. One in five was concerned they might default on loans and have to lay off employees, while 28 percent feared they would have to cancel growth projects. In aggregate, more than half felt their businesses may not survive longer than 12 months—despite the fact that 20 percent of those surveyed had already taken advantage of the various forms of government assistance aimed at easing their financial distress, such as tax breaks or payments to furlough staff.