SMEs proliferate globally during the pandemic

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The global health crisis has affected companies around the world in different ways, but in particular it dealt a large initial blow to small and medium-sized businesses (SMEs), which represent more than 90% of all companies worldwide. Many companies closed their doors temporarily and others permanently, while others have experienced unprecedented growth.

However, in the last 18 months and as a result of this global disruption, thousands of new companies, fundamentally digital, have emerged to satisfy new needs and new market opportunities. In addition, digitalization has allowed the expansion of remote work, which has made it easier for entrepreneurs to prosper.

Mastercard's Recovery Insights: Small Business Reset report corroborates this development, revealing the rise of small businesses. According to the report, 32% more SMEs Ecuador Mobile Number List were created in 2020 globally, as accumulated savings, a disrupted labor market and evolving consumer behaviors fueled a new entrepreneurial spirit. From the United Kingdom and Canada to Japan and Brazil, countries around the world experienced unprecedented growth in new business formation, with the top 10 seeing an increase of almost 30%.

The 10 countries that bring together the greatest growth in the creation of new companies in 2020 include:

The fuel driving this exponential growth of new small business creations around the world is the ease and accessibility of digital operations. Almost immediately, the Covid-19 pandemic led to a reliance on the digital sector and consumer spending occurred almost entirely through e-commerce. Millions of citizens around the world were forced to work, eat, exercise and entertain inside their homes. By the second half of 2020, many found entrepreneurial opportunities in this digital structure that did not exist before or might not have grown as quickly.

Additionally, the number of brick-and-mortar businesses that went digital for the first time during the pandemic tripled in 2020, a sure sign that the acceleration toward digital is not slowing down. This greater shift towards acceptance of online trading was reflected across the world, albeit to varying degrees. In Brazil, for example, the number of existing companies that went digital in 2020 compared to 2019 grew by 208%, while in Germany it was 38%.

Small businesses have had to become resilient innovators to maintain their activity during the crisis. Given the low cost of entry compared to traditional channels, online platforms and dropshipping have never been easier. This led not only to increased competition between existing SME retailers that went digital, but also competition from a wave of new companies emerging from the crisis.



The shift to digital was worth it for companies that were able to go digital. According to Mastercard, SMEs with a digital presence experienced a 5% increase in customer spending and a 4.5% increase in transactions compared to those that are not digitalized. They also attracted more revenue from new customers, with a 6.4% increase in spending.

Although it remains a challenge, starting a small digital business or converting an existing one online has never been easier, even despite the economic difficulties resulting from the pandemic. As the market continues to accelerate its shift to digital, we see technology expanding to be able to support these businesses, further driving business opportunities.