Small businesses continue to suffer significant losses during the COVID-19 crisis when compared to larger firms. Should the pandemic last longer than six months, 56% of smaller firms fear for their survival, while larger businesses predict to be at lower risk of bankruptcy (CBS, 2020). Although the Netherlands has one of the most competitive economies in the world, small-sized companies in the Netherlands find it challenging to compete with large-sized companies. In a period of a pandemic, small businesses continue to conduct their business activities online to avoid social contact. Therefore, in the era of COVID-19, possible solutions for the survival of smaller businesses are related to data sharing, resources delegation and local support, which could result in a growing economy for the Netherlands.
Data Sharing Economy in a Transparent Manner
Data sharing economy (DSE) between Business to Business (B2B) is becoming increasingly relevant, for smaller businesses considering the innovation potential of the use of data. Data sharing enables access to large, exceptional data sets, which provide opportunities for enhancing business processes & developing new business models and services (European Commission, 2020). Furthermore, policymakers have discussed possible regulatory options for prompting the DSE in a transparent manner (CBS, 2020). The regulation could prevent larger technology companies from dominating the market. Data transparency (DT) is the ability for businesses to offer access to data and work with data conveniently regardless of the location, application or company size (Ruth, 2017). Additionally, data transparency guarantees that the information reported is factual and derived from reliable sources (Mayernik, 2017). Policymakers find it challenging to offer incentives which will promote high-quality and access to data for the stakeholders in need. Therefore, transparency is not always possible (Deloitte, 2014). First and foremost, there is no incentive to promote data sharing between B2B via the three methods of DT, which are cross-industry, DT platforms or different suppliers (European Commission, 2017). Moreover, the current regulations are mainly about the intellectual property or consumer protection in Europe, such as the FRAND (Fair, Reasonable and Non-discriminatory) (Ferro, 2018) or the GDPR (General Data Protection Regulations) (Harris, Samuel & Probert, 2018). Finally, it is challenging to create a policy which benefits all parties due to the ever-changing technological landscape for sharing data (European Commission and Everis, 2018). Hence, it is beneficial to support smaller companies and stimulate the economy. The government could implement solutions such as high sanctions for larger technology companies that are too dominant or refuse to share relevant data with smaller companies.
Delegation of Financial Resources to Smaller Companies
Secondly, amid COVID-19, the Netherlands could delegate more financial aid to small-sized businesses companies because of aspects related to the entrepreneurial spirit, council aid and financial support of the country. The Netherlands has the most competitive economies in Europe and has excellent institutions, especially surrounding the protection of intellectual property (Schwab, 2019). Nevertheless, government aid could support a robust entrepreneurial culture and the highly flexible labour market. In 2017, the Netherlands ranked last in the EU in relations of the share of small businesses that took part in public tenders (European Commission, 2019). Since 2018, the Netherlands has developed different measures to improve access to finance for small-sized businesses, especially access to risk capital. However, governmental aid and public procurement decreased in 2019 from previous years. In the Netherlands, 56% of the businesses with two to 249 employees who fall under the medium and small-sized businesses, expect their livelihood to be at risk should the crisis last longer than six months. Larger businesses with more than 249 employees assume less risk of their livelihood (CBS, 2020). Considering that the Dutch government offers extra support to small-sized firms (CBS, 2020), they could effectuate new measures for a valid delegation of financial resources. These new measures could ensure that larger-sized companies uphold their partnerships agreements with small companies, especially when using public financial aid.
Supporting Local Businesses
Thirdly, locals should support regional domestic businesses, to generate business visibility of those firms and increase online interaction with small businesses. Customer behaviour has changed from bulk-buying to online shopping due to the COVID-19 pandemic (Murphy, Naert, & and Strong, 2020). Although shoppers are concerned about whether online shopping is safe or not, according to experts the virus could live on surfaces from three hours to three days, depending on the materials (World Health Organization, 2020). To avoid the unnecessary danger of spreading the virus, locals should shop online through local shops, in which the safety and hygiene procedures are apparent and verified by the Dutch Ministry of Health. Larger companies have a more significant brand presence and value, which is one of the main factors why consumers purchase more from them. That is why larger sized companies have seen an increase in sales during the crisis, whereas not the same for smaller businesses. Series of civic organisations are generating initiatives to support local businesses that are negatively affected during the pandemic, which are mainly restaurants (Ruijter, 2020). Although digital delivery platforms such as Uber help local restaurants, some traditional businesses may struggle to navigate their ways in the digital world (Fitzpatrick, Gill, Libarikian, Smaje, & and Zemmel, 2020). Larger businesses such as Amazon active in the Netherlands should be obligated to sell to only a certain number of products online and showcase small local businesses in their digital platforms. France ordered Amazon to limit trade to essential products (Handavas, 2020), which could be an effective strategy to adopt in the Netherlands. The change in the behaviour of society has affected small businesses the most during the pandemic. Therefore, locals should shop via domestic small-sized businesses to reduce the virus from spreading and ultimately stimulate the entire economy of the country.
Conclusion
The Dutch policymakers and society may help in fostering entrepreneurship and economic growth. Important practical implications are that policymakers could promote data transparency and delegate more financial resources to smaller businesses rather than larger businesses. At the same time, locals should support regional domestic businesses. The implementation of high sanctions on large-sized technology businesses can promote data transparency because there is a lack of incentive to share data. As described, larger businesses should uphold their partnerships agreements with smaller firms due to a lack of financial and council aid, for small businesses, including the entrepreneurial spirit of the nations. Consumer shopping via local and online stores are excellent ways to support small businesses. A key policy priority should, therefore, be to enact long-term solutions for small businesses which will benefit the economic development of the Netherlands in the long run. Finally, when performing a retrospective of these times, it might well be the case that COVID-19, not the CEOs of companies, will have led to the digital transformation.
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