The importance of government Corona support and business robustness

A comparative study within the food and tourism industry in Norway and Sweden

  • Cecilia Dalborg Mid Sweden University
  • Yvonne von Friedrichs
  • Kristin Sabel
  • Jorunn Grande
  • Tina Løvsletten Troset
  • Lill-Beathe Håpnes
Keywords: Entrepreneurship, COVID-19, policy, robustness

Abstract

The still ongoing Corona pandemic is a societal crisis that has resulted in radically changed conditions for everyone - people as well as for organisations (Ratten, 2020). Since viable companies constitutes a basic precondition for a society's economy and development (Singer, 2018), it is important that the local companies, which constitute an important employer, are robust against the negative changes that a crisis often can bring about (Beninger and Francis, 2021). Around the world, a number of support packages have been initiated in order to underpin companies in surviving the pandemic (Oikawa et al., 2021). Besides various forms of public financial support, conversion initiatives may be necessary for companies to implement, such as revision of existing business- and marketing models (Ritter & Pedersen, 2020). The agendas and actions to prevent COVID-19 to spread has nationally been very different. What is common to the Nordic countries is that none of them has had extensive shutdowns, like many other countries in Europe (Ekholm et al., 2020). However, there are many measures that differentiate the Nordic countries. In this study, Sweden and Norway are compared and Table 1 below shows some significant differences between the countries.

Table 1. Initial Corona restrictions in Norway and Sweden 2020

Corona restrictions 2020

Norway

Sweden

Closed schools

Completely

Partly

Closed borders

Completely

Partly

Prohibition of visiting elderly housing

Completely

Completely

Prohibition to visit holiday homes

Completely

Not at all

Closed restaurants, shops etc.

Partly

Not at all

Recommendation for telework

Completely

Partly

Maximum allowable crowds

10

50

Early in the pandemic, Norway introduced a low limit on crowd gatherings and strictly border surveillance. In Sweden, the restrictions primarily were based on personal responsibility, voluntariness and trust in the authorities. In 2021, the restrictions became stricter in Sweden as well (ibid.). The aim of the study is to explore how different Corona policies and support systems in Sweden and Norway have affected the countries' companies in terms of creativity and robustness. The paper explores if conversion work has been easier to do in the Swedish companies due to lower restrictions, or if the creativity rather is thrived in countries that faced greater restrictions, such as in Norway. A survey was distributed electronically, in the fall of 2021, to 805 SMEs within the food and tourism industry, located in two neighbouring regions in Norway and Sweden. The digital survey included both open-ended and closed questions in order to identify encountered challenges, actions taken and received support measures to the pandemic. The survey data was processed in SPSS where descriptive frequency analysis, correlations and regression analyses were used to analyse the data. The preliminary results show similarities between the Swedish and Norwegian companies. For example, about half of the companies have been running their businesses for more than 10 years. The average age of the owners is just over 50 years. In these industries, the gender distribution is equal and the majority of business owners have a university degree. A slightly larger proportion of Norwegian companies have had a turnover of one million or more. In Sweden there are more companies that only employ the owner. In both countries, about half of the entrepreneurs have received financial support (47%) and the size of amounts also seems to be the same (the majority has received support less than Euro 25 000). However, the view of the future, and the long-term effect of Covid-19 differ between the countries. The Norwegian companies are more positive, and three out of four companies expect sales in 2021 to be higher compared to 2019. It also seems that the strategies for dealing with the pandemic differ between the countries. In Norway, common actions to counteract the pandemic is said to be: “need to find new customer groups”, “change in business model”; “change in marketing” and “change in distribution”. In Sweden the most common action is “reduced cost”. It also seems that the management of public funds has worked differently in the countries. In Norway the municipalities, in a larger extant, have been used as intermediaries, and this is noticeable in the answers. More than a third (37%) of the Norwegian companies state that their municipality has been important or very important during the pandemic. The corresponding figure in Sweden is 11 percent. “We who run small companies fell outside the usual compensation scheme due to low fixed costs. However, we received support from the municipality” (Norwegian entrepreneur). A lot of money has been paid out to companies during the pandemic. At the same time, criticism is growing in society that the subsidies have been cumbersome to apply for, and often unfair as they are not considered to have gone to the "right" companies. For example, start-ups or growing companies have had difficulties to obtain support since comparisons have been made with previous year. The preliminary results of the study indicate that the policy in the countries has affected the companies and their abilities to be robust in different ways. In the continued work with the data, in-depth comparative analyses will be made.

 

References

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Published
2022-08-09
Section
2.2 Entrepreneurship in turbulent-times - new opportunities?