tag:theconversation.com,2011:/africa/topics/small-businesses-25225/articlessmall businesses – The Conversation2024-02-14T16:53:54Ztag:theconversation.com,2011:article/2223422024-02-14T16:53:54Z2024-02-14T16:53:54ZCanada’s entrepreneur shortage is impacting the economy — here’s one way to fix it<figure><img src="https://images.theconversation.com/files/573166/original/file-20240203-29-f3bec9.jpg?ixlib=rb-1.1.0&rect=482%2C30%2C4606%2C2820&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">To build more small- and medium-sized businesses, and create more jobs in turn, Canada needs to create more entrepreneurs. </span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>Business Development Canada made headlines in October 2023 when it revealed that almost <a href="https://www.bdc.ca/en/about/mediaroom/news-releases/nearly-half-as-many-people-are-launching-businesses-as-20-years-ago">half as many Canadians are starting businesses today</a> compared to 20 years ago. </p>
<p>This is alarming, as the vast majority of jobs in Canada — <a href="https://www.statcan.gc.ca/o1/en/plus/1253-small-and-medium-businesses-driving-large-sized-economy">98 per cent</a> — are created by small business entrepreneurs. The health of our economy is built on the backbone of these enterprises. </p>
<p>To build more small- and medium-sized businesses, and create more jobs in turn, Canada needs to create more entrepreneurs. </p>
<p>My <a href="https://doi.org/10.1016/j.jbusvent.2023.106326">recent study with my colleagues Shasha Liu and Brock Smith</a> at the University of Victoria offers a way forward. Our study reveals that instilling an entrepreneur-possible self — the belief that you can become an entrepreneur — is a critical stepping stone for becoming an entrepreneur. And, it’s one we can encourage to form.</p>
<h2>Daydreaming reality into being</h2>
<p>Each of us carries a constellation of possible selves within us. These possible selves play a crucial role in <a href="https://doi.org/10.1037/0003-066X.41.9.954">shaping the actual identities we assume</a>. </p>
<p>If we don’t develop an entrepreneur-possible self, we are unlikely to develop the mindset that fosters entrepreneurship. Historically, most Canadians never consider becoming an entrepreneur and, of those who do, <a href="https://www.gemconsortium.org/reports/latest-global-report">most never actually take the leap</a>.</p>
<p>Our study <a href="https://doi.org/10.1016/j.jbusvent.2023.106326">highlights some easy ways to foster the development of this entrepreneur-possible self</a>. What’s needed is identity play — the provisional “trying-on” of a future entrepreneur-possible self. Specifically, two types of identity play: daydream-play and substantive-play.</p>
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<img alt="A woman, sitting in front of a computer screen, rests her chin against her hands while starting off into the distance" src="https://images.theconversation.com/files/574212/original/file-20240207-26-juwr5b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/574212/original/file-20240207-26-juwr5b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/574212/original/file-20240207-26-juwr5b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/574212/original/file-20240207-26-juwr5b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/574212/original/file-20240207-26-juwr5b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/574212/original/file-20240207-26-juwr5b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/574212/original/file-20240207-26-juwr5b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Most Canadians never consider becoming an entrepreneur and, of those who do, most never actually take the leap.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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<p>Daydream-play involves envisioning an entrepreneur self through unrestricted thought exercises and imaginings. It’s about letting your mind freely wander through creative musings, wondering, considering and thinking. </p>
<p>Substantive-play involves physically acting to learn more about the possibility of being an entrepreneur. This is an active form of play focused on actions such as trying things out, looking into things and observing or learning new things related to entrepreneurship. </p>
<p>Alternating between these two types of play can ultimately lead to an aspirational stage that is critical to forming an entrepreneur identity.</p>
<h2>Creating entrepreneur-possible selves</h2>
<p>For many of us, the pandemic fuelled personal reflections on the meaning, purpose and impact of our careers and vocations, resulting in what Harvard business professor Ranjay Gulati has called the “<a href="https://fortune.com/2022/03/08/great-resignation-careers-rethink-labor-shortage-pandemic-work-ranjay-gulati/">Great Re-think</a>.”</p>
<p>This period of reflection serves as a prime opportunity for individuals to work on developing an entrepreneur-possible self.</p>
<p>One way individuals can do this is by engaging in daydream-play to imagine the entrepreneur they could become. This can involve, for example, reading <a href="https://www.goodreads.com/list/show/22754.Business_Biographies_and_Memoirs">biographies of entrepreneurs</a>, listening to <a href="https://wondery.com/shows/how-i-built-this/">podcasts with or about successful entrepreneurs</a> or watching <a href="https://www.netflix.com/ca/title/80202462">movies about entrepreneurial journeys</a>.</p>
<p>As a form of substantive-play, individuals can tap existing entrepreneur networks and <a href="https://eocanada.com">meet with or shadow entrepreneurs</a>, play tabletop or <a href="https://www.simcompanies.com/">virtual games</a> that simulate building companies, work or volunteer at a startup, or conduct industry or opportunity-specific research that leverages a personal curiosity, interest or passion.</p>
<p>Since entrepreneurial journeys are seldom solitary endeavours, aspiring entrepreneurs can also reach out to organizations that support entrepreneurship (like the <a href="https://chamber.ca/">Canadian Chamber of Commerce</a> or <a href="https://www.futurpreneur.ca/en">Futurepreneur</a> for guidance and mentorship. These organizations can provide valuable insights, networking opportunities and resources.</p>
<h2>Entrepreneurship support organizations</h2>
<p>Organizations that are part of the entrepreneur ecosystem, like <a href="https://www.innovatingcanada.ca/">Innovating Canada</a>, <a href="https://www.startupcan.ca">Startup Canada</a> and the <a href="https://www.ccsbe.org">Canadian Council for Small Business and Entrepreneurship</a>, also should ensure working-age individuals have opportunities to explore and build their entrepreneur-possible selves.</p>
<p>These organizations should start by educating Canadians about the identity play process. To encourage more focused daydream-play, these organizations can create resources for exploring entrepreneurship as a career, provide access to success stories and create an accessible database of entrepreneurs willing to have conversations with those interested in learning more. </p>
<p>They can support substantive-play by developing an active mentoring program that goes beyond passive advice-giving to provide individuals a chance to shadow successful entrepreneurs. Establishing positive and meaningful mentor-mentee connections will help to cultivate an aspirational entrepreneur possible self.</p>
<p>Lastly, these organizations can create opportunities for hands-on experience by hosting or promoting hackathons, short-sprint entrepreneurship competitions, pitch events, maker spaces and side-hustle experiences. They can also begin providing coaches to create individualized action plans.</p>
<h2>Today’s youth are tomorrow’s entrepreneurs</h2>
<p>To ensure a robust entrepreneurial ecosystem, parents, guardians and teachers play a pivotal role in providing children with opportunities to practice being an entrepreneur that establish entrepreneur-possible selves. </p>
<p>Across the country, there are many entrepreneurship classes, <a href="https://www.camps.ca/entrepreneurship-camps.php">summer camps</a> and entrepreneurship youth experiences that foster daydream and substantive-play in children, including the UVIC Gustavson School of Business’ <a href="https://www.kidovate.ca/">Kidovate program</a>.</p>
<p>By nurturing micro-entrepreneurship experiences for youth from an early age, we are sowing the seeds for a generation that will grow up thinking “I could be an entrepreneur” which is key to becoming one.</p>
<p>The takeaway is clear: building more opportunities for Canadians to create entrepreneur-possible selves will result in more Canadians who think and act based on believing they are entrepreneurs. It is an investment in the nation’s future that will contribute to Canada’s economic prosperity and its competitiveness on the global stage.</p><img src="https://counter.theconversation.com/content/222342/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Claudia Smith does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A new study reveals that instilling an entrepreneur-possible self — the belief that you can become an entrepreneur — is a critical stepping stone for becoming an entrepreneur.Claudia Smith, Assistant Professor, Gustavson School of Business, University of VictoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2192802023-12-13T13:36:15Z2023-12-13T13:36:15ZBig-box retail chains were never a solution for America’s downtowns − and now they’re fleeing back to suburbia<figure><img src="https://images.theconversation.com/files/564994/original/file-20231211-89932-pedkqb.jpg?ixlib=rb-1.1.0&rect=12%2C0%2C2032%2C1529&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Merchandise is locked in cases to guard against theft in a Target store in New York City on Sept. 23, 2023. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/target-retail-stores-in-new-york-city-have-installed-locked-news-photo/1726478336">Deb Cohn-Orbach/UCG/Universal Images Group via Getty Images</a></span></figcaption></figure><p>Holiday shopping is in full swing, but city dwellers may have fewer options for buying in person than they did a few years ago. That’s because many large chain stores are pulling out of central cities. </p>
<p>This trend has been building for several years. Target made national headlines in 2018 when it closed its store in a <a href="https://www.nytimes.com/2021/06/30/business/target-baltimore-store-closings.html">predominantly Black Baltimore neighborhood</a> after just 10 years of operation. COVID-19 sped things up by cutting foot traffic in city centers and boosting online commerce. </p>
<p>Target has <a href="https://www.cnn.com/2023/10/12/business/target-closing-us-cities-crime-dg/index.html">closed additional stores</a> in Chicago, Milwaukee, New York, San Francisco, Seattle and Portland, Oregon. <a href="https://www.businessinsider.com/walmart-store-closings-2023-full-list">Walmart</a>, <a href="https://www.thestreet.com/retailers/cvs-is-permanently-closing-hundreds-of-stores-for-a-surprising-reason">CVS</a>, <a href="https://www.usatoday.com/story/money/shopping/2023/11/29/rite-aid-store-closures-grow/71744831007/">Rite Aid</a> and Walgreens have also closed many urban stores.</p>
<p>Closures have spread to many suburbs and small towns. Retailers saddled with high debt, overexpansion, <a href="https://nrf.com/research/national-retail-security-survey-2023">shoplifting losses</a>, slumping sales and <a href="https://www.jpmorganchase.com/institute/research/cities-local-communities/post-covid-consumer-spending-in-new-york-city">online competition</a> are shedding stores fast. But this contraction lopsidedly affects city dwellers, who often lack the shopping options and price competition suburbanites enjoy. </p>
<p>Many news reports, particularly from conservative outlets, have <a href="https://www.nationalreview.com/corner/manhattan-retail-is-getting-destroyed-by-shoplifting/">blamed lawlessness</a> and <a href="https://www.wsj.com/articles/the-root-causes-of-san-franciscos-disorder-crime-homeless-911-auto-theift-public-disorder-a45b170c">weak leadership by progressive city governments</a>. In my view, however, there’s another important factor: flawed corporate strategies.</p>
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<figcaption><span class="caption">As big-box chain drugstores close in St. Louis, an independent pharmacy works to fill the gap with more personal service.</span></figcaption>
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<h2>The self-service revolution</h2>
<p>The concept of letting shoppers serve themselves dates back to 1879, when Frank W. Woolworth <a href="https://guides.loc.gov/this-month-in-business-history/february/woolsworth">opened his first store in Utica, New York</a>. Its successors grew into the F.W. Woolworth chain of “five-and-dime” discount dry goods stores, which became fixtures of hundreds of cities, suburbs and small towns in the early 20th century. </p>
<p>Food stores followed suit in the early 1900s, beginning with the <a href="https://www.supermarketnews.com/archive/early-stores-pioneer-self-service-concept">Alpha Beta chain</a> in California in 1914 and <a href="https://mypigglywiggly.com/aboutus/">Piggly Wiggly</a> in Tennessee in 1916. Instead of having clerks gather customers’ orders from store shelves, these stores let shoppers loose in the aisles, then allowed them to pay at the end of their visit.</p>
<p>This approach seeded the meteoric rise of “big box” stores like <a href="https://www.thestreet.com/markets/history-of-walmart-15092339">Walmart</a> and <a href="https://corporate.target.com/about/purpose-history/history-timeline?era=2">Target</a> in the mid-20th century. With their low manufacturing costs, streamlined logistics, minimally staffed stores, national advertising and vast inventories, big-box chains <a href="https://www.npr.org/2012/11/19/165295840/the-past-and-future-of-americas-biggest-retailers">drove many small retailers out of business</a> – and most Woolworth stores, too. </p>
<p>Self-service came to rule the suburbs, where big chains could build mega-stores with plenty of parking. But they were rare in central cities for most of the 20th century, except for a few affluent enclaves, such as West Los Angeles or Chicago’s North Side. Generally, these chains avoided poor neighborhoods and many downtowns altogether. </p>
<p>As shoppers increasingly gravitated to suburban malls, many urban neighborhoods became <a href="https://www.city-journal.org/article/the-return-of-urban-retail-deserts">retail deserts</a>, with few vendors meeting local needs. Those that endured, often run by small-scale entrepreneurs, typically were businesses that offered a single type of product, such as grocery stores, delicatessens or pharmacies. </p>
<h2>Chains discover downtowns</h2>
<p>Harvard management professor <a href="https://www.hbs.edu/faculty/Pages/profile.aspx?facId=6532">Michael Porter</a> drew attention to the lack of retail services in densely populated urban neighborhoods in a seminal 1995 article, “<a href="https://hbr.org/1995/05/the-competitive-advantage-of-the-inner-city">The Competitive Advantage of the Inner City</a>.” Economic development, Porter argued, was key to revitalizing inner cities – and these zones housed a lot of potential customers.</p>
<p>“Even though average inner city incomes are relatively low, high population density translates into an immense market with substantial purchasing power,” Porter wrote. “Ultimately, what will attract the inner city consumer more than anything else is a new breed of company that is not small and high-cost but a professionally managed major business employing the latest in technology, marketing, and management techniques.” </p>
<p>Chains of many kinds began to <a href="https://www.npr.org/2010/12/21/132231472/big-box-retailers-move-to-smaller-stores-in-cities">rediscover the central city market</a> in the early 2000s. <a href="https://nyc-business.nyc.gov/nycbusiness/article/reduce-operating-expenses">Tax breaks</a> and subsidized redevelopment projects often greased the wheels. Urban gentrifiers were reliably drawn to new urban chain stores like Target, Walmart and Whole Foods.</p>
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<p>Many small retail shops now faced a juggernaut of national chains. One example was <a href="http://dx.doi.org/10.1001/jamainternmed.2019.4588">independent pharmacies</a>: Between 2009 and 2015, 1 in 4 urban pharmacies in low-income neighborhoods closed.</p>
<p>And chain stores often failed to generate major benefits for their new neighborhoods. Employees had few chances for advancement beyond <a href="https://www.epi.org/press/new-company-wage-tracker-shows-low-wages-are-the-norm-at-large-retail-and-food-service-employers/">minimum-wage hourly work</a>. Clustering of chain stores in prosperous neighborhoods and business districts failed to address “food deserts” <a href="https://www.ers.usda.gov/amber-waves/2011/december/data-feature-mapping-food-deserts-in-the-u-s/">in impoverished areas</a>.</p>
<h2>Broken big boxes</h2>
<p>Certain qualities that made chains so successful – national sales strategies, self-service stores and brand awareness – are proving to be liabilities in today’s more complicated and divided urban context. </p>
<p>Retail executives and their <a href="https://nrf.com/advocacy/policy-issues/organized-retail-crime">trade associations</a> have cited excessive shoplifting losses and weak law enforcement as factors in urban store closures, even though they have conspicuously <a href="https://www.theatlantic.com/health/archive/2021/12/shoplifting-holiday-theft-panic/621108/">failed to provide shoplifting data</a> by location. There are signs, moreover, that <a href="https://www.nytimes.com/2023/12/08/business/organized-shoplifting-retail-crime-theft-retraction.html">shoplifting is receding</a>, except for in a few large cities like New York.</p>
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<p>In my opinion, there are three reasons why city chain stores are closing at such a high rate compared with those in suburbs.</p>
<p>First, despite job recovery in many cities since the pandemic, low-income urban households remain in crisis, with <a href="https://www.nytimes.com/2023/01/25/realestate/rent-burdened-american-households.html">high rents</a> and inflation driving up the cost of essentials. According to the nonprofit Brookings Institution, 9.6% of suburban residents lived in poverty in 2022, compared with about <a href="https://www.brookings.edu/articles/post-pandemic-poverty-is-rising-in-americas-suburbs/">16.2% in primary cities</a>. Widespread poverty in a city like Baltimore, for instance, is reflected in the <a href="https://mdfoodbank.org/hunger-in-maryland/maryland-hunger-map/">concentration of food banks</a> on the west and east sides. </p>
<p>Less disposable income, compounded by shoplifting losses, can lead to store closures – especially since national chains like Target and Walmart expect the dollar value of sales from stores that have been open for more than a year to <a href="https://www.wallstreetmojo.com/same-store-sales/">increase steadily over time</a>. </p>
<p>Second, urban chains clustered too many of their own branches close together or too near other chains – usually in high-income residential or business districts. <a href="https://www.nytimes.com/2009/07/09/business/media/09adco.html">Manhattan below 96th Street</a> is a clear example of this pattern. With affluent customers shifting to online shopping, and reduced foot traffic overall thanks to remote work, this aggressive strategy has failed. </p>
<p>Third, widely distributed <a href="https://www.cnn.com/2023/12/07/business/shoplifting-surge-hype-nightcap/index.html">media images of rampant shoplifting</a> send a message at odds with these chains’ powerful brand images of order, safety and standardization. A <a href="https://counciloncj.org/shoplifting-trends-what-you-need-to-know/">small but rising share</a> of shoplifting incidents since 2019 have involved assaults or other crimes. These events have the potential to <a href="https://www.vox.com/money/23938554/shoplifting-organized-retail-crime-walmart-target-theft-laws">scare executives</a> concerned about employee lawsuits. Chains want urban locations but not “urban” reputations. </p>
<h2>Retail flight</h2>
<p>Large retail chains have finally figured out that cities aren’t suburbs. Those that remain are adding staff, scaling back self-checkout, checking receipts at exits and <a href="https://www.kqed.org/news/11949025/why-are-retail-stores-locking-up-basic-necessities">locking down higher-priced goods</a> – essentially, abandoning the self-service model. However, these costly measures won’t bring back online-addicted shoppers or daily commuters, nor will they put more money in struggling consumers’ pockets.</p>
<p>Responding to retail association pressure, some city and state governments are imposing <a href="https://www.cnbc.com/2023/08/11/organized-retail-crime-nine-states-pass-laws-to-crack-down-on-theft.html">stricter punishments for shoplifting</a> and cracking down on <a href="https://www.youtube.com/watch?v=5RIjWTO2Yz4">black-market vending</a> on sites like Amazon and eBay. However, it isn’t clear that this get-tough approach can or should rescue the big-box model, since these stores failed to create safe, secure shopping environments in the first place.</p>
<p>As I see it, the urban chain store implosion raises questions about whether suburban-style retail really does much for cities. These stores are mediocre job creators, undercut local entrepreneurs, often <a href="https://www.strongtowns.org/journal/2022/9/13/mainstreet-vs-chain-stores-a-western-north-carolina-analysis">pay relatively low property taxes</a> and build ugly parking lots. They also don’t provide the kind of “<a href="https://medium.com/i-cities/eyes-on-the-street-ab12b39b960b">eyes on the street</a>” local security that small-scale shopkeepers do. In fact, their parking lots and open aisles seem to <a href="https://www.cbsnews.com/newyork/news/yonkers-shoplifting-big-box-stores/">attract disorder</a>.</p>
<p>Shoehorning suburban-style stores into urban neighborhoods now looks like a Band-Aid for much deeper urban problems. In my view, city leaders would do better to focus on <a href="https://www.recastyourcity.com/">building local capacity</a> and protecting smaller stores that usually have greater local wealth-building potential, more reasonable growth expectations and the kind of personal service that <a href="https://www.sfgate.com/bayarea/article/how-retail-crime-impacts-business-16720683.php">naturally deters shoplifting</a>.</p><img src="https://counter.theconversation.com/content/219280/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nicholas Dagen Bloom does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Shoplifting has been hyped as a driver of chain-store closures, but did these companies ever really understand urban environments in the first place?Nicholas Dagen Bloom, Professor of Urban Policy and Planning, Hunter CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2146782023-10-16T15:38:09Z2023-10-16T15:38:09ZHow smaller businesses can become net-zero influencers and enablers<figure><img src="https://images.theconversation.com/files/553540/original/file-20231012-29-67dqep.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C6639%2C4446&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/man-getting-haircut-hair-stylist-barber-2075358466">Rawpixel.com/Shutterstock</a></span></figcaption></figure><p>What if all of the UK’s <a href="https://www.nhbf.co.uk/about-the-nhbf/industry-statistics/">48,000 hairdressing salons and barbershops</a> started sharing water and energy-saving advice with their clients, alongside a clipper cut or a wash and blow dry? <a href="https://link.springer.com/article/10.1007/s10551-014-2398-y?sa_campaign=email/event/articleAuthor/onlineFirst">Previous studies</a> have demonstrated that hairdressers can shape customers’ environmental behaviour with guidance they can trust and that relates to their everyday lives.</p>
<p>And it’s not just hairdressers. Cafes and restaurants are also addressing food-related emissions with carbon labelling schemes and more sustainable menu choices.</p>
<p>Recruiting smaller businesses to support the drive for net zero makes a lot of sense. More than half of the UK’s business emissions are <a href="https://www.british-business-bank.co.uk/wp-content/uploads/2021/10/J0026_Net_Zero_Report_AW.pdf">estimated</a> to come from its 6 million small and medium-sized enterprises (SMEs – companies with less than 250 employees). As the authors of a <a href="https://www.oecd.org/publications/no-net-zero-without-smes-bab63915-en.htm">recent OECD report</a> argue, there’s “no net zero without SMEs”.</p>
<p>But the decarbonisation of smaller firms has only recently attracted serious attention from policymakers, through initiatives such as the <a href="https://smeclimatehub.org/uk/">UK Business Climate Hub</a>. And while criticism of Rishi Sunak’s watering-down of net-zero policies has <a href="https://www.telegraph.co.uk/business/2023/09/28/city-aviva-universities-pension-city-revolt-sunak-net-zero/">united environmental campaigners with some company bosses and investors</a>, it may not be enough to keep SMEs and their emissions in the spotlight.</p>
<p>SMEs are important as energy consumers, and there is an increasing focus on the carbon they emit directly, or that is embedded in their products and services. However, as highlighted in <a href="https://doi.org/10.1016/j.gloenvcha.2023.102707">a recent study</a> I worked on with colleagues at Oxford and Sheffield Hallam universities, smaller businesses can also help cut emissions as behavioural “influencers” and “enablers” of change.</p>
<p><strong>How SMEs can help meet net zero goals</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/551248/original/file-20230930-27-oldojm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Table explaining SME net zero roles: consumers, influencers, enablers." src="https://images.theconversation.com/files/551248/original/file-20230930-27-oldojm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/551248/original/file-20230930-27-oldojm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=292&fit=crop&dpr=1 600w, https://images.theconversation.com/files/551248/original/file-20230930-27-oldojm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=292&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/551248/original/file-20230930-27-oldojm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=292&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/551248/original/file-20230930-27-oldojm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=367&fit=crop&dpr=1 754w, https://images.theconversation.com/files/551248/original/file-20230930-27-oldojm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=367&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/551248/original/file-20230930-27-oldojm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=367&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.sciencedirect.com/science/article/pii/S0959378023000730?via%3Dihub">Crisis and opportunity: transforming SME governance for net zero. S. Hampton, R. Blundel, W. Eadson, P. Northall and K. Sugar (2023) </a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
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<p>SMEs could have a vital role as enablers by helping with the wider adoption of low-carbon technologies. The scope of this type of activity is vast. For example, leading-edge innovations like the <a href="https://belfastmaritimeconsortium.com/">Belfast Maritime Consortium’s</a> high-speed, zero-emission passenger ferry (which is launching a <a href="https://www.irishnews.com/news/northernirelandnews/2022/04/12/news/zero-emission-commuter-ferry-service-to-run-between-belfast-and-bangor-2641656/">pilot scheme</a> in 2024) could help lots of commuters to cut their daily travel emissions.</p>
<p>In addition, many thousands of plumbers and electricians are already playing essential <a href="https://journals.sagepub.com/doi/10.1177/1420326X15600775">intermediary roles</a> as advisors and installers of more established technologies, such as electric vehicle chargers and heat pumps.</p>
<h2>Persistent challenges and hopeful signs</h2>
<p>Businesses need to adopt low-carbon technologies and practices to improve productivity, remain competitive and attract staff. The scale and complexity of this challenge varies greatly between sectors. But all businesses could benefit from a <a href="https://www.theccc.org.uk/publication/how-can-policy-better-support-smes-in-the-pathway-to-net-zero-energy-saving-trust/">more joined-up</a> support framework to help them achieve their goals.</p>
<p>In fact, many smaller businesses are effectively flying in the dark. A recent study estimates that <a href="https://www.enterpriseresearch.ac.uk/publications/the-less-than-1-club-mapping-net-zero-support-for-small-businesses-across-england/">just 1% of SMEs in England are accessing net-zero business support</a>. Our <a href="https://doi.org/10.1016/j.gloenvcha.2023.102707">research</a> on support arrangements for SME decarbonisation points to large variations in provision across the four UK nations and between different industry sectors. </p>
<p>Scotland has provided consistent support to SMEs over the last decade, for example, with expert energy audits and subsidised grants available. By contrast, smaller businesses in England have not had access to a national funding programme for building energy efficiency.</p>
<p>Similarly, while SMEs in industries such as food and hospitality are relatively well represented by trade associations that can provide more tailored net-zero advice, we have identified significant issues with access to business support in other sectors. </p>
<p>SMEs operating in large industrial supply chains, for example, often have to navigate an array of regulations and measures from different government departments that do not always appear to be speaking to one another. This generates cost and confusion for many smaller businesses as they struggle to find the right support.</p>
<h2>Taking SMEs more seriously</h2>
<p>The government’s <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1128689/mission-zero-independent-review.pdf">net-zero review</a>, chaired by Chris Skidmore MP and published in January 2023, was commissioned to identify a pathway to meet the UK’s net-zero target by 2050. It provided a clear set of policy actions designed to trigger an “<a href="https://ambitionloop.org/">ambition loop</a>” in which government policy and private sector leadership reinforce each other to increase climate action even further. </p>
<p>But while Skidmore mentions SMEs, there are three key areas where more radical change is needed to help them make a real impact on the UK’s decarbonisation goals:</p>
<p><strong>1. Information and signposting</strong></p>
<p>The review proposed a “Help to Grow Green” campaign, offering information, resources and vouchers for SMEs to plan and invest in the net-zero transition. The UK government’s <a href="https://www.gov.uk/government/organisations/department-for-energy-security-and-net-zero/about">Department for Energy Security and Net Zero</a> is piloting a new digital energy advice service to help SMEs navigate the maze of competing information sources. But to be really effective, tailored advice and meaningful support is crucial – a balance that’s difficult to achieve in practice.</p>
<p><strong>2. Energy efficiency</strong></p>
<p>Skidmore also called for SMEs to be included in tax reforms to accelerate uptake of energy-efficient technologies. Initiatives of this kind could also help drive improved SME productivity – a longstanding government goal. However, there are few signs of this kind of fiscal incentive in the pipeline right now, at least at a national level.</p>
<p><strong>3. Carbon skills gap</strong></p>
<p>The review highlighted skills gaps in many specialist areas, such as carbon auditing, as well as across sectors and places. A step-change in investment in further education colleges in particular is needed to expand the number of courses, apprenticeships, and knowledge-exchange initiatives. Again, this would help business productivity while also promoting net-zero targets.</p>
<p>The UK’s SME population can make a massive difference to the delivery of the country’s carbon targets, but it will require a more concerted effort. The government must take the lead, working with sector- and place-based organisations.</p>
<p>The agenda is already mapped out in some detail, but delivery is another matter. There is a lot to learn from existing best-practice examples across the four nations, and by expanding our understanding of SMEs and their multiple roles as net-zero consumers, influencers and enablers.</p><img src="https://counter.theconversation.com/content/214678/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard K. Blundel has received funding from ESRC and UKERC. </span></em></p>SMEs could help the UK maintain its position as a climate change champion and ensure a long-term future for all businesses, large or smallRichard K. Blundel, Professor of Enterprise and Organisation and Director of the Centre for Social and Sustainable Enterprise (CSSE), The Open UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2110682023-08-21T13:47:46Z2023-08-21T13:47:46ZHow rising interest rates are affecting UK businesses<figure><img src="https://images.theconversation.com/files/543717/original/file-20230821-23-2hink2.jpg?ixlib=rb-1.1.0&rect=0%2C33%2C7326%2C4858&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worried-business-owner-working-his-shop-2199248649">Stock-Asso/Shutterstock</a></span></figcaption></figure><p>From <a href="https://www.theguardian.com/business/2023/aug/03/were-just-treading-water-uk-small-business-owner-higher-interest-rate-taking-their-toll?utm_term=64ccabd424ac776f6436d425fc8da30c&utm_campaign=BusinessToday&utm_source=esp&utm_medium=Email&CMP=bustoday_email">chip shops</a> to <a href="https://theconversation.com/silicon-valley-bank-how-interest-rates-helped-trigger-its-collapse-and-what-central-bankers-should-do-next-201697">tech start-ups</a>, and even large, <a href="https://www.standard.co.uk/news/uk/wilko-administration-high-street-retail-interest-rates-b1098476.html">well-established companies</a>, rising interest rates have had an impact right across the business world. After <a href="https://theconversation.com/how-the-bank-of-englands-interest-rate-hikes-are-filtering-through-to-your-finances-210344">14 consecutive base rate hikes by the Bank of England</a> since 2021, this is causing particular problems for companies with a lot of debt. </p>
<p>We recently saw the chaos this can cause when English utility <a href="https://www.bbc.co.uk/news/business-66051555">Thames Water</a> nearly collapsed under the weight of its debt and had to seek emergency funding from its shareholders earlier this year. </p>
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<strong>
Read more:
<a href="https://theconversation.com/how-thames-water-came-to-be-flooded-with-debt-and-what-it-means-for-taxpayers-208788">How Thames Water came to be flooded with debt – and what it means for taxpayers</a>
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<p>More recently, budget retailer Wilko’s borrowing not only affected the business and its shareholders, but also its employees when its recent collapse put <a href="https://www.wionews.com/business-economy/uk-retailer-wilko-collapses-due-to-big-debts-12500-jobs-at-risk-624323">12,500 jobs at risk</a>.</p>
<p>Similar problems could arise among many other companies and industries. Financial markets expect the bank base rate – which dictates the rates on many types of loans – will keep climbing: it’s currently <a href="https://www.thetimes.co.uk/money-mentor/article/when-will-interest-rates-go-down-uk/">forecast to peak</a> between 5.75% and 6% by the start of 2024. And the <a href="https://www.statista.com/statistics/793368/value-of-business-corporate-loans-united-kingdom/">total value of UK business loans</a> is also expected to rise to an estimated £513 billion as of 2023. This is £78 billion higher than in 2018, an increase of 18%.</p>
<p>Company insolvencies have <a href="https://www.reuters.com/world/uk/england-wales-report-40-rise-company-insolvencies-2023-06-16/">already jumped by 40%</a> over the year to May 2023 in England and Wales – the highest level since monthly records began in January 2019. And significant debt problems within an industry or even one firm can cause a domino effect across the UK economy. </p>
<p>Research shows the effects of an insolvency or bankruptcy <a href="https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis/article/spreading-the-misery-sources-of-bankruptcy-spillover-in-the-supply-chain/B87035D235D7AA2A443B5164C28EBA5B">can spread</a> to a firm’s trading partners. Wilko started to defer supplier payments and extend the timeframe in which it settles invoices <a href="https://www.retailgazette.co.uk/blog/2022/09/wilko-delays-supplier-payments/">last year</a> to try to ease pressure on its cash flow as it struggled to manage its debts.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/wilko-is-the-latest-shop-to-be-edged-out-by-competition-but-it-doesnt-have-to-mean-the-end-for-the-budget-retailer-211161">Wilko is the latest shop to be edged out by competition but it doesn't have to mean the end for the budget retailer</a>
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<p>So, with interest rates likely to continue to rise, being able to tell if another company or industry is at risk is important for customers, employees, investors and other connected businesses such as suppliers.</p>
<h2>The rising cost of business borrowing</h2>
<p>The average cost of new borrowing from banks by private non-financial companies was <a href="https://www.bankofengland.co.uk/statistics/money-and-credit/2023/june-2023">6.36% in June 2023</a>, more than 4 percentage points above the December 2021 rate of 2.03% (when the Bank of England base rate increases began). For small and medium-sized enterprise (SMEs), new loan rates increased from 6.86% in May to a record high of 7.13% in June (compared with 2.51% in December 2021). </p>
<p>Companies already holding debt that’s not on a fixed rate of interest could also see an increase in the interest owed to their lender. This could come as a shock since UK interest rates were <a href="https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp">1% or less</a> for more than 13 years from February 2009 to June 2022. During this time, the pressure of debt on borrowers was light or negligible.</p>
<p><strong>The base rate has recently climbed from low levels</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/543679/original/file-20230821-23-2cqa28.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Line chart showing the Bank of England base rate rising from less than 1% in 2020 to 5.25% by August 2023. by" src="https://images.theconversation.com/files/543679/original/file-20230821-23-2cqa28.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/543679/original/file-20230821-23-2cqa28.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=345&fit=crop&dpr=1 600w, https://images.theconversation.com/files/543679/original/file-20230821-23-2cqa28.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=345&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/543679/original/file-20230821-23-2cqa28.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=345&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/543679/original/file-20230821-23-2cqa28.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=433&fit=crop&dpr=1 754w, https://images.theconversation.com/files/543679/original/file-20230821-23-2cqa28.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=433&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/543679/original/file-20230821-23-2cqa28.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=433&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Bank of England base rate from January 2020 to August 2023.</span>
<span class="attribution"><a class="source" href="https://www.bankofengland.co.uk/explainers/what-are-interest-rates">The Bank of England</a></span>
</figcaption>
</figure>
<p>Companies that got used to being able to borrow at a low cost are now starting to feel the pinch, or even come under extreme pressure if they are heavily indebted. This is what worsened the <a href="https://news.sky.com/story/thames-water-secures-additional-750m-from-shareholders-in-race-to-avoid-nationalisation-12918285">financial position of UK utility Thames Water</a>. When the company was privatised in 1989, it had no debt. But over the years it borrowed heavily to fund new investments. </p>
<p>Generally speaking, debt is a <a href="https://www.ofwat.gov.uk/thames-debt-and-water-sector-finance/">prudent low-cost source of finance</a> with low interest rates fixed for the long term. But Thames Water borrowed too much. It had <a href="https://www.bbc.co.uk/news/business-66051555">£14 billion in debt by the end of June 2023</a>, which amounted to 80% of the value of the business and made it the most heavily indebted of England and Wales’ water companies, according to analysts. Its loan repayments were not only linked to the bank base rate, but also inflation, which has also spiked over the past year. This triggered fears about the company’s ability to continue to service its debts.</p>
<p>Thames Water was lucky, in a sense – it avoided being nationalised because it was able to secure timely funding from its shareholders. But the situation revealed the extent of the iceberg under the water in this industry. Shortly afterwards, another English utility, Southern Water, announced <a href="https://www.reuters.com/world/uk/britains-southern-water-suspends-dividend-amid-growing-debt-pile-rating-2023-07-07/">it would not pay dividends</a> until at least 2025 after its credit rating was downgraded. This shows investors, lenders and credit ratings agencies are getting more nervous about debt-related trends within industries.</p>
<p>Businesses can help to ease such concerns by being transparent.
<a href="https://onlinelibrary.wiley.com/doi/full/10.1002/bse.3055">Research</a> shows that the more firms disclose financial and non-financial information, the more likely they are to be able to secure loans and access lower rates. This also applies to companies that are <a href="https://www.sciencedirect.com/science/article/abs/pii/S0167268117302263">more open with external partners</a> by sharing resources and knowledge to enhance innovation. The more information a bank has, the more comfortable it will be about lending to a company. It also reduces the bank’s own risk rating, allowing it to lend more and offer lower rates. </p>
<figure class="align-center ">
<img alt="Man in suit with blue tie holding three blocks showing bank symbol, rating symbol and chart symbol with arrow and percentage, with " src="https://images.theconversation.com/files/543720/original/file-20230821-15-ev2p8p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/543720/original/file-20230821-15-ev2p8p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/543720/original/file-20230821-15-ev2p8p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/543720/original/file-20230821-15-ev2p8p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/543720/original/file-20230821-15-ev2p8p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/543720/original/file-20230821-15-ev2p8p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/543720/original/file-20230821-15-ev2p8p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Credit ratings influence how much and to which companies banks will lend.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/credit-rating-concept-finance-banking-investment-2248616763">Panchenko Vladimir/Shutterstock</a></span>
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</figure>
<h2>What to look out for in the current environment</h2>
<p>Business leaders that are addressing rising interest rates head-on may announce adjustments to their growth or expansion plans, especially if a plan previously relied heavily on debt. They may also consider different sources of finance. The UK water regulator, for example, has called on utilities to consider the role of equity funding (<a href="https://www.british-business-bank.co.uk/finance-hub/what-is-equity-finance/">for example, selling shares</a>) and <a href="https://www.ofwat.gov.uk/thames-debt-and-water-sector-finance/">not just debt</a> in financing new investment.</p>
<p>A company’s <a href="https://www.investopedia.com/terms/d/debtratio.asp#:%7E:text=The%20debt%20ratio%20is%20defined,that%20are%20financed%20by%20debt.">ratio of debt versus assets</a> will also tell you how much it holds in debt. A “good” debt ratio is around 1 to 1.5, but <a href="https://www.british-business-bank.co.uk/finance-hub/what-level-of-debt-is-healthy-for-business/">the ideal can vary</a> by industry. Manufacturers, for example, tend to need a lot of equipment and so may have ratios greater than 2.</p>
<p>More interest rate rises will pile pressure on companies, employees and the economy. But by anticipating the impact on their debt and being more open about their current state and future plans, businesses can help to minimise the pain.</p><img src="https://counter.theconversation.com/content/211068/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Erwei (David) Xiang does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Recent interest rate hikes are not just a problem for mortgage borrowers, many companies are suffering too.Erwei (David) Xiang, Senior Lecturer (Associate Professor) in Accounting, Newcastle UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2088772023-07-25T11:56:36Z2023-07-25T11:56:36ZWhy workers in small businesses can struggle with mental health and ‘presenteeism’<figure><img src="https://images.theconversation.com/files/538724/original/file-20230721-21-kpjy3w.jpg?ixlib=rb-1.1.0&rect=77%2C68%2C5517%2C3735&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/stressed-forgetful-old-middle-aged-business-1921610576">Ground Picture/Shutterstock</a></span></figcaption></figure><p>If you are struggling with your mental health, is it better to come to work or stay off sick? You may think your employer would prefer you try to keep working, but many employers would prefer you take time off to feel better. </p>
<p>Presenteeism – going to work but being unable to perform at full capacity due to ill health – can sometimes be much more difficult for businesses to handle than absenteeism. And for small businesses with fewer resources to support mental health and wellbeing, these problems can become even more acute. </p>
<p>Small companies can be great places to work for reasons including close and informal working relationships and a family-like ethos. But the flip side of this is that they may lack human resource management expertise, occupational health access and staff capacity. There may also be few opportunities for the redeployment of employees experiencing mental health challenges. </p>
<p>Mental health and wellbeing at work have come into much sharper focus following the COVID pandemic. But most of the knowledge on supporting mental health in the workplace is based on the experience of larger organisations that typically have a lot of staff to handle these issues. Small businesses make up a significant proportion of the global economy, however. In the UK alone, <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1106039/2022_Business_Population_Estimates_for_the_UK_and_regions_Statistical_Release.pdf">half of private sector employment</a> is in small businesses with less than 50 employees.</p>
<p>To find out how different it can be for a small business to respond to such challenges, <a href="https://www.emerald.com/insight/content/doi/10.1108/ER-09-2022-0451/full/html">we held in-depth interviews</a> with 21 small business managers with direct experience of supporting numerous employees with mental health problems. </p>
<p>We found they did not necessarily use different approaches to larger organisations. The support they offered aligned with <a href="https://www.nice.org.uk/guidance/ng212">current understanding of good practice</a>, including one-to-one support meetings, adjustments in hours and flexible approaches to work scheduling and location.</p>
<figure class="align-center ">
<img alt="Illustration of man in a suit juggling rings while walking on a tightrope." src="https://images.theconversation.com/files/538734/original/file-20230721-6770-grewc9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/538734/original/file-20230721-6770-grewc9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/538734/original/file-20230721-6770-grewc9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/538734/original/file-20230721-6770-grewc9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/538734/original/file-20230721-6770-grewc9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/538734/original/file-20230721-6770-grewc9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/538734/original/file-20230721-6770-grewc9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Small business managers can sometimes feel like they are ‘juggling on a tightrope’.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/businessman-juggling-rings-on-rope-juggler-2288525287">Yuriy2012/Shutterstock</a></span>
</figcaption>
</figure>
<p>But our research also revealed a picture of small business managers “<a href="https://doi.org/10.1177/02662426221084252">juggling on a tightrope</a>” as they attempted to respond to the needs of unwell employees alongside concerns for the wider organisation. This challenge is felt more intensely in small businesses where line managers often occupy multiple roles. </p>
<p>As one manager told us: </p>
<blockquote>
<p>I’ve got this fancy executive director role but I’m anything from the cleaner to the family support worker – I can step into any role – designer, the web editor! So you’re conscious you’re spinning a lot of plates, probably with insufficient resources and then, of course, you’re looking at your own personal reserves in terms of your own mental health.</p>
</blockquote>
<h2>The presenteeism challenge</h2>
<p>But that’s not the whole story. These managers also told us that presenteeism could create a greater management challenge than absenteeism. This surprised us, as we expected sickness absence to be the bigger issue given the resource constraints for small businesses.</p>
<p><a href="https://www.health.org.uk/infographic/how-is-work-good-for-our-health#:%7E:text=There%20have%20been%20several%20studies,those%20in%20lower%20status%20roles.">Work can be good for our health</a> because it helps with maintaining routines, purpose and social connection. As such, an employee struggling with their mental health might choose to be at work for its health benefits, despite not being able to perform at their best. </p>
<p>But work that is “<a href="https://journals.sagepub.com/doi/full/10.1177/0018726719827081">therapeutic</a>” for an employee can be difficult for small businesses to accommodate, particularly in the long term. Some of the managers described how an unwell employee’s emotional distress or concerning behaviour could create ripple effects throughout the workforce. </p>
<p>This can affect small businesses, particularly if employees are socially close and work in one location. It also creates a dilemma for managers that are committed to supporting an unwell employee, but struggling to balance this against the impact on co-workers.</p>
<p>The managers we spoke to were keen to do the right thing for employees experiencing mental ill health. Those who successfully managed presenteeism worked hard to understand the issues and initiate conversations at an early stage. They also engaged in a variety of support and adjustments that were tailored to the individual. </p>
<p>Nevertheless, effective support in this context needs to reconcile the needs of employees and employers in a manner that doesn’t cause further distress to either party.</p>
<p>Presenteeism isn’t necessarily <a href="https://www.hrmagazine.co.uk/content/comment/why-presenteeism-isnt-necessarily-a-bad-thing/">a bad thing</a>, but it can be restructured to become “<a href="https://journals.sagepub.com/doi/full/10.1177/0018726719827081">functional presenteeism</a>”. This is when work is not making an employee’s health worse and they are supported to perform well even as they experience mental health challenges.</p>
<figure class="align-center ">
<img alt="Group of people sitting in a circle, man with head down, woman with her hand on his shoulder, others looking on sympathetically." src="https://images.theconversation.com/files/538725/original/file-20230721-25-y0qtvz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/538725/original/file-20230721-25-y0qtvz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/538725/original/file-20230721-25-y0qtvz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/538725/original/file-20230721-25-y0qtvz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/538725/original/file-20230721-25-y0qtvz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/538725/original/file-20230721-25-y0qtvz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/538725/original/file-20230721-25-y0qtvz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Supporting colleagues’ mental health difficulties.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/rear-view-upset-man-feel-pain-1477336778">fizkes/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Focus on wellbeing and mental health</h2>
<p>It is positive to see workplace mental health and wellbeing moving up political and organisational agendas. This has shone a light on the importance of decent quality jobs, better line management, autonomy and flexible working.</p>
<p>However, a broad focus on workplace wellbeing must not overshadow the need to pay attention to the sharp end of mental health. Even in the most <a href="https://www.mind.org.uk/media-a/4663/resource1_mentally_healthy_workplacesfinal_pdf.pdf">mentally healthy workplaces</a>, there will inevitably be employees who experience significant difficulties in this area. And this can stem from issues entirely outside of the manager’s control.</p>
<p>There has also been a concerning rise in “training” employees to be more <a href="https://www.rte.ie/brainstorm/2020/0109/1105180-is-resilience-really-a-good-thing-for-employees/">resilient in the workplace</a>. This can put the onus on individuals to address wellbeing problems that stem from poor working conditions. It can also encourage harmful presenteeism.</p>
<p>Our research findings show that, beyond wellbeing policies, symptom recognition and workplace adjustments, mental health training needs to include a focus on managing and mediating the tricky areas of presenteeism and performance management. </p>
<p>Managers need training to help them conduct difficult conversations that explore support for the employee while recognising the needs of the wider organisation. This should include building management skills and confidence to <a href="https://irep.ntu.ac.uk/id/eprint/39164/1/1283874_Karanika-Murray.pdf">support health and performance in tandem</a>.</p>
<p>And don’t forget about manager wellbeing. Balancing everyone’s needs can take an emotional toll on managers themselves. In a small business, this can fall to one person who then finds themselves juggling on a tightrope.</p><img src="https://counter.theconversation.com/content/208877/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jane Suter receives funding from the Economic and Social Research Council and the Wellcome Trust. </span></em></p><p class="fine-print"><em><span>Annie Louise Irvine receives funding from the Economic and Social Research Council</span></em></p>Much of the knowledge firms can access about supporting employee mental health is based on the experience of large organisations with significant resources.Jane Suter, Senior Lecturer Human Resource Management, University of YorkAnnie Louise Irvine, Research Associate, King's College LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1979562023-01-19T06:11:39Z2023-01-19T06:11:39ZGlass Onion shows the pitfalls of going into business with friends – here’s how you can succeed<figure><img src="https://images.theconversation.com/files/505084/original/file-20230118-25-bgzrro.jpg?ixlib=rb-1.1.0&rect=4%2C22%2C2991%2C1832&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://media.netflix.com/en/only-on-netflix/81458416/assets/eyJpZCI6InAzdnpid3BtZCIsIm5hbWUiOiJLTzJfMjAyMTA4MjBfNDU1MDByQ0NfZi5qcGcifQ==">Netflix</a></span></figcaption></figure><p>The new Netflix murder mystery film <a href="https://www.youtube.com/watch?v=gj5ibYSz8C0">Glass Onion</a> is a cautionary tale – but not about influencers, <a href="https://www.esquire.com/uk/culture/a42304964/glass-onion-elon-musk/">tech bros</a> or <a href="https://adg.org/perspective/222-a-metaphor-for-a-mystery-glass-onion/">ironic architecture</a>, as some have suggested. But Glass Onion (along with HBO’s <a href="https://www.youtube.com/watch?v=p2v7IQVSimk">Succession</a>) is actually a warning about the potential perils of going into business with your friends or family.</p>
<p>Such businesses are a huge contributor to any economy. Globally, between 70 and 80% of firms are co-owned or co-managed by <a href="https://familybusinessunited.com/2020/10/27/globally-most-businesses-are-family-owned/">family</a> or <a href="https://www.independent.co.uk/news/business/start-ups-friends-relatives-employed-study-businesses-a8255856.html">friends</a>. Close relations can be a great source of support and <a href="https://link.springer.com/article/10.1007/s11365-020-00734-2">positive influence</a> on a new idea or business. </p>
<p>My <a href="https://www.emerald.com/insight/content/doi/10.1108/ET-03-2019-0052/full/html">research</a>, focusing on new business development within universities, shows that friends can be successful business partners. For students especially, entrepreneurial colleges and <a href="https://link.springer.com/book/10.1007/978-3-030-35191-5">universities</a> offer a range of <a href="https://wonkhe.com/blogs/how-can-universities-provide-enterprising-solutions-for-small-business/">support</a> for friends to realise business dreams.</p>
<hr>
<figure class="align-right ">
<img alt="Quarter life, a series by The Conversation" src="https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><em><strong><a href="https://theconversation.com/uk/topics/quarter-life-117947?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">This article is part of Quarter Life</a></strong>, a series about issues affecting those of us in our twenties and thirties. From the challenges of beginning a career and taking care of our mental health, to the excitement of starting a family, adopting a pet or just making friends as an adult. The articles in this series explore the questions and bring answers as we navigate this turbulent period of life.</em></p>
<p><em>You may be interested in:</em></p>
<p><em><a href="https://theconversation.com/why-youre-less-likely-to-get-rich-these-days-if-your-parents-arent-already-wealthy-194321?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">Why you’re less likely to get rich these days if your parents aren’t already wealthy</a></em></p>
<p><em><a href="https://theconversation.com/christmas-films-there-might-be-some-truth-to-stories-about-hometown-romances-according-to-research-196607?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">Christmas films: there might be some truth to stories about hometown romances, according to research</a></em></p>
<p><em><a href="https://theconversation.com/entrepreneurs-know-that-failure-is-sometimes-necessary-heres-what-we-can-learn-from-them-192438?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">Entrepreneurs know that failure is sometimes necessary – here’s what we can learn from them</a></em></p>
<hr>
<p>There are a few challenges when you start a business with someone that can be made easier when working with people you are close to. Founders should trust one another, and understand each other’s likes, dislikes and ambitions. If you and your partner have similar values and approaches to life, you will likely be able to predict how they will react in times of crisis or uncertainty. With this in mind, turning an existing relationship into a business relationship can be easily done.</p>
<h2>The pitfalls</h2>
<p>Of course, things don’t always work out. What can start as occasional bickering or disagreement about the direction of a new venture can lead to resentment, a decline in the business (and relationship) and even legal trouble.</p>
<p>A business involving family or friends can seriously disrupt work-life balance – which is <a href="https://www.emerald.com/insight/content/doi/10.1108/JFBM-12-2020-0113/full/html">critical to business success</a>. Lack of boundaries and additional time spent discussing work can interfere with your personal relationship, leading to fatigue and resentment. It is not realistic or healthy to talk about work all the time.</p>
<p>A family business spanning decades with the same people at the top may eventually stagnate, becoming overly reliant on what are now exhausted markets. This complacency, as with any type of business, can creep in and affect customer relationships, knowledge of competitors and ability to innovate.</p>
<p>Without proper care, these issues can become commonplace. As happens in <a href="https://www.youtube.com/watch?v=Ut4pgRu5gHU">Succession</a>, personality battles and power grabs can distract from productivity and threaten to derail the venture.</p>
<h2>Protecting yourself and your business</h2>
<p>Before getting started, it’s important to <a href="https://startups.co.uk/strategy/7-important-factors-to-consider-before-starting-a-business/">plan ahead</a>. This should include creating a strategy for business partners to amicably exit the firm when necessary. It also must involve a consideration of the legal implications of a disagreement, and a plan to protect ideas, business contributions and other intellectual property.</p>
<p>Research shows that in <a href="https://www.sciencedirect.com/science/article/pii/S1877858516300948?via%3Dihub">longstanding family businesses</a> the existence of known successors can influence how seriously the founders take intellectual asset protection. Even with friends and loved ones, you should still document and register ideas, designs, prototypes, products, processes and slogans. </p>
<figure class="align-center ">
<img alt="In a sunny office, four young people smile and give each other high fives around a table of laptops and charts" src="https://images.theconversation.com/files/505089/original/file-20230118-21-pokfes.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505089/original/file-20230118-21-pokfes.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505089/original/file-20230118-21-pokfes.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505089/original/file-20230118-21-pokfes.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505089/original/file-20230118-21-pokfes.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505089/original/file-20230118-21-pokfes.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505089/original/file-20230118-21-pokfes.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Before you celebrate your new business, make sure you and your friends/co-owners protect your intellectual property.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/we-did-four-cheerful-young-people-641703658">Roman Samborskyi / Shutterstock</a></span>
</figcaption>
</figure>
<p>Before you sign your ideas away (or write them on a <a href="https://www.youtube.com/watch?v=Dkcv10rLAhM">napkin</a>), here are five things to consider:</p>
<p><strong>1. Transparency – what are everyone’s plans?</strong></p>
<p>When embarking on a new business venture, it is important to be upfront about intentions and goals – in the short and long term. What brought you all to this potential startup? What do you wish to achieve? These are questions you should ask.</p>
<p><strong>2. Security – seek legal advice early</strong></p>
<p>Along with officially registering the company, the owners should contact an intellectual property lawyer to receive expert guidance on fairly protecting initial and ongoing contributions with appropriate trademarks, patents and copyrights where required.</p>
<p><strong>3. Prioritise – stick to your strengths</strong></p>
<p>This is what adds distinct value to businesses: remembering what skills you bring to the table. Even with friends, this isn’t an opportunity to simply hang out and have fun. Yes, you must enjoy your work, but time, money and livelihoods are at stake. A team comprised of many people with a variety of skills and experiences brings creativity, multiple perspectives and resilience amid inevitable change.</p>
<p><strong>4. Be kind – appreciate and consider life changes</strong></p>
<p>Like the volatility of business, our lives can change instantly. Co-owners should be mindful of changes to working patterns, lifestyles, and important events to maintain health and happiness. This can be particularly relevant when friends co-owning a business are at similar life stages, such as starting a family or getting married. Showing compassion and preparing for these factors, when they arise, can reduce tension and conflict in the day-to-day running of a business.</p><img src="https://counter.theconversation.com/content/197956/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert Crammond does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Four things you should consider before launching a startup with your university friends.Robert Crammond, Senior Lecturer in Enterprise, University of the West of ScotlandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1935902022-11-21T20:06:36Z2022-11-21T20:06:36ZSaving Main Street: Local businesses need community support to stay afloat<figure><img src="https://images.theconversation.com/files/495178/original/file-20221114-15-xnfwn1.jpg?ixlib=rb-1.1.0&rect=32%2C0%2C3670%2C2312&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The historic Main Street in Newmarket, Ont. Main Street businesses are a crucial part of Canadian culture and the economy. </span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>Main Street businesses that survived COVID-19 restrictions are now navigating a pandemic recovery where <a href="https://assets.kpmg/content/dam/kpmg/xx/pdf/2021/01/future-of-retail.pdf">predicted changes in the retail industry have been accelerated by five to 10 years</a>. </p>
<p>The ability to adapt to these changes, coupled with policies, programs and consumer behaviour supporting small business, are crucial to ensuring our Main Streets thrive. Main Streets are <a href="https://www.investopedia.com/terms/m/mainstreet.asp">central areas in towns or neighbourhoods where small, independent shops offer goods and services</a>.</p>
<p>As a social innovation designer, I study complex challenges with the aim of finding common approaches needed to solve them. My goal is to discover the principles that can help us <a href="https://www.trickleupdesign.com/podcast">design a more humane future</a>.</p>
<p>This future includes vibrant communities that support small businesses. To better understand how to get there, <a href="https://www.trickleupdesign.com/podcast/episode-5-supporting-main-street">I spoke to entrepreneurs and stakeholders championing Main Street areas in Toronto and across Canada</a>.</p>
<h2>The backbone of the economy</h2>
<p>In Canada, <a href="https://www150.statcan.gc.ca/n1/pub/45-28-0001/2021001/article/00043-eng.htm">small businesses employ 9.7 million people</a> or roughly two-thirds of the total labour force, contributing <a href="https://www.ic.gc.ca/eic/site/061.nsf/eng/h_03147.html">37.5 per cent of the GDP</a>. </p>
<p>Many small businesses pay their employees <a href="https://www.cbc.ca/news/business/living-wage-minimum-wage-cost-of-living-1.6387970">liveable wages</a>, offer paid sick leave and <a href="https://betterwayalliance.ca/what-is-ethical-employment/.">engage in fair scheduling practices</a>. They help to <a href="https://www.toronto-bia.com/whats-a-bia/">beautify streets, support community initiatives and create events</a> that enrich lives.</p>
<p>But small businesses are also struggling to stay afloat. According to the Canadian Federation of Independent Business, <a href="https://www.smallbusinesseveryday.ca/dashboard">56 per cent of businesses across Canada are reporting below normal sales compared to pre-pandemic numbers</a>. The majority are also still <a href="https://www.cfib-fcei.ca/en/media/thousands-of-small-businesses-holding-covid-emergency-loans-losing-10000-or-more-as-they-are-now-deemed-ineligible">carrying debt from the pandemic</a> and are navigating <a href="https://www.scotiabank.com/content/dam/scotiabank/corporate/news/assets/2022_ScotiaAdvice_PathtoImpact_ENG.pdf">supply chain issues, labour shortages, rising inflation</a> and a looming recession.</p>
<h2>Small businesses facing challenges</h2>
<p>While sales are still below normal, business costs continue to climb. A report from the Better Way Alliance, a Canadian business network advocating for ethical business practices, found that rent for many
Ontario businesses is commonly <a href="https://betterwayalliance.ca/wp-content/uploads/2022/02/BWA_Out-of-Control_-Why-Small-Businesses-Need-Urgent-Action-on-the-Commercial-Rent-Crisis.pdf">increasing between 10 and 50 per cent</a>.</p>
<p>Commercial insurance costs are also a <a href="https://20336445.fs1.hubspotusercontent-na1.net/hubfs/20336445/research/mbb/Business-Barometer-Canada-2022-10.pdf">top concern for business owners</a>. The third quarter of 2022 saw a <a href="https://www.marsh.com/uk/services/international-placement-services/insights/global_insurance_market_index.html">six per cent increase in global commercial insurance prices — the 20th consecutive quarter of hikes</a>. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1585313217311481859"}"></div></p>
<p>Canada’s high cost of telecom is another challenge. A <a href="https://ised-isde.canada.ca/site/strategic-policy-sector/en/telecommunications-policy/price-comparisons-wireline-wireless-and-internet-services-canada-and-foreign-jurisdictions-2021">2021 study shows that the price tag of mobile wireless and internet is higher in Canada</a> than European countries and the U.S. across most service categories.</p>
<p>While big businesses are better positioned to negotiate rising expenses, small businesses are left feeling the brunt of rising costs — all while navigating pandemic uncertainty and shifts in the market.</p>
<p>Main Street businesses are also facing demands for online and curb-side sales options. The hybridization of in-person and online sales — referred to as <a href="https://dl.acm.org/doi/10.1145/953460.953498">“bricks and clicks”</a> or <a href="https://www.forbes.com/sites/forbestechcouncil/2022/08/31/lets-get-phygital-examining-the-shift-toward-hybrid-shopping/?sh=6f28c08a3b1b">“phygital”</a> — <a href="https://www.forbes.com/sites/briansolis/2022/02/02/the-future-of-retail-is-hybrid-and-unified-around-end-to-end-connected-experiences/?sh=e02eb1d63e1e">are being forecast as the new normal for retailers</a>.</p>
<p>Transitioning to a mix of online and physical sales involves more than just launching a website. It requires a shift in how a business operates, including technology upgrades and changes to its <a href="https://www.accenture.com/_acnmedia/PDF-168/Accenture-Store-Tomorrow-POV.pdf#zoom=40">human resources and physical footprint</a>, which necessitate significant time and financial investment — things that small businesses often run short on. </p>
<h2>How to walk the talk</h2>
<p>According to a recent survey, <a href="https://static1.squarespace.com/static/5a17333eb0786935ac112523/t/62b9c720cdbbef7ef166043e/1656342304798/CFIB+Small+Biz+27+06+22.pdf">supporting small businesses is important to 86 per cent of Canadians</a>. At the same time, <a href="https://static1.squarespace.com/static/5a17333eb0786935ac112523/t/63234c22df3ebf5ea7e485fd/1663257634519/Yahoo+CDA+Shopping+Preference+15+9+22.pdf">67 per cent of Canadians are shopping less in stores</a>, compared to before the pandemic. Some have cut back on spending entirely, but most have shifted online. </p>
<p>With Amazon as the most popular e-commerce platform in Canada — <a href="https://www.statista.com/forecasts/871090/canada-top-online-stores-canada-ecommercedb">earning over US$9.8 billion (followed by Walmart, Costco and Apple)</a> — there is a concerning disconnect between support for small business and where Canadians are spending their money. This gap could mean the difference between having independent shops or vacant storefronts.</p>
<figure class="align-center ">
<img alt="View of shops along Queen St. East in Toronto" src="https://images.theconversation.com/files/493688/original/file-20221106-24-jct2ri.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/493688/original/file-20221106-24-jct2ri.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/493688/original/file-20221106-24-jct2ri.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/493688/original/file-20221106-24-jct2ri.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/493688/original/file-20221106-24-jct2ri.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/493688/original/file-20221106-24-jct2ri.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/493688/original/file-20221106-24-jct2ri.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Main Street small businesses help to beautify our streets, support community initiatives and create events that enrich our lives.</span>
<span class="attribution"><span class="source">(Sarah Tranum)</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>I encourage Canadians to visit neighbourhood businesses, <a href="https://www.shopify.com/ca/blog/why-support-small-businesses">post positive reviews, buy gift cards</a> and resist purchasing from large online retailers when buying local is an option. Increasingly, <a href="https://canadiansme.ca/how-storetodoor-is-giving-local-retailers-a-competitive-edge/">local retailers can offer quick delivery</a> on par with the big guys. When you can, buy directly to help small businesses save on <a href="https://www.vox.com/the-goods/22550608/how-big-business-exploits-small-business">fees charged by e-commerce and delivery platforms</a>.</p>
<p>Here are five additional ways Canadians can help small businesses remain an important part of our communities:</p>
<ol>
<li><p>Support the Better Way Alliance as it calls on the Ontario government to reform commercial rent in the province. It <a href="https://betterwayalliance.ca/commercial-rent-crisis/">recently launched a petition to reform commercial rent and lease agreements</a>.</p></li>
<li><p>Champion the Canadian Federation of Independent Business’s efforts to <a href="https://www.cfib-fcei.ca/en/media/news-releases/skyrocketing-insurance-costs-pose-new-challenge-small-business-recovery">encourage the insurance industry to make affordable commercial insurance accessible to small businesses</a> by discussing the issue with your local MPP. </p></li>
<li><p>Learn more about the efforts of <a href="https://observerxtra.com/2022/08/18/groups-push-for-ottawa-to-curb-the-power-of-big-telecom-oligopoly/">organizations campaigning for more competition, choice and affordability</a> for wireless and internet services in Canada. </p></li>
<li><p>Spread the word about initiatives like <a href="https://digitalmainstreet.ca/">Digital Main Street</a> that are helping small businesses transition online. It offers <a href="https://twitter.com/TechPlaceBurl/status/1574761251305046016">one-on-one support and access to services and funding to help Main Street businesses innovate digitally</a>.</p></li>
<li><p>Support your local business association’s <a href="https://www.ontario.ca/document/business-improvement-area-handbook/appendix-e-links-ontario-bia-websites">efforts to create community spaces and events</a>, and volunteer for activities that spotlight independent retailers. </p></li>
</ol>
<h2>Looking to the future</h2>
<p>These solutions all come down to one thing: valuing connection over just transaction. A common thread in the research is a clear desire for people to connect with and support small, neighbourhood businesses. </p>
<p>Judy Morgan, <a href="https://ontarioplanners.ca/oppi/conferences/conference-2021/speakers/all-speakers/judy-morgan">a retail consultant I interviewed</a>, emphasized the importance of creating valuable spaces that people will want to visit, <a href="https://mymainstreet.ca/activator-program">in a process known as placemaking</a>: “There needs to be the physical infrastructure to facilitate coming to the area and then enjoying it while you’re there, as opposed to just being purely transactional.”</p>
<p>As Aaron Binder, business owner and director of the Better Way Alliance, said: “There’s a difference between consumers and customers. Customers are people. Consumers are a group. We want to focus on people… People are looking for that personal interaction.”</p>
<p>Our Main Streets offer more than just goods and services. They are integral to the fabric of a healthy community. A future where small businesses thrive must include more support through how we spend and through policies and programs aimed to keep expenses fair and our streetscapes business- and people-friendly. This is key to ensuring our communities are designed for making connections, not just transactions.</p><img src="https://counter.theconversation.com/content/193590/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sarah Tranum does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Rising business costs and shifts in the market accelerated by the COVID-19 pandemic are posing challenges for small retailers along Main Street business areas.Sarah Tranum, Associate Professor, Social Innovation Design, Faculty of Design, OCAD UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1893942022-08-29T20:02:37Z2022-08-29T20:02:37ZWhy unions and small business want industry bargaining from the jobs summit – and big business doesn’t<p><em>This article is part of The Conversation’s series looking at Labor’s jobs summit. Read the other articles in the series <a href="https://theconversation.com/au/topics/jobssummit2022-125921">here</a>.</em></p>
<hr>
<p>The trade union movement’s push to reform Australia’s enterprise bargaining system looks set to be a major issue at this week’s Jobs and Skills Summit.</p>
<p>The Australian Council of Trade Unions’ <a href="https://www.abc.net.au/7.30/actu%E2%80%99s-sally-mcmanus:-%E2%80%9Ccollective-bargaining-has/14031720">plan</a> for sectoral or industry-level bargaining was outlined by secretary Sally McManus last week:</p>
<blockquote>
<p>The way we’d see it working is that, where it makes sense to have multi-employer bargaining, both the workers’ representatives and the employers sit down and negotiate across their sector.</p>
</blockquote>
<p>Innes Willox, chief executive of Australian Industry Group, labelled the proposal “<a href="https://www.aigroup.com.au/news/media-centre/2022/we-need-to-work-together-on-sensible-reform-not-reimpose-union-led-industry-wide-bargaining/">seriously misguided</a>” and a “<a href="https://www.theguardian.com/australia-news/2022/aug/25/what-is-multi-employer-bargaining-could-it-help-lift-wages-growth-in-australia">throwback</a>” to the 1960s. He warned it “would reduce opportunities for employers and employees to negotiate genuine improvements in productivity and work conditions that suit their workplace”. </p>
<p>But employer groups’ reactions have been far from unanimous.</p>
<p>The Council of Small Business Organisations Australia has agreed to work with the ACTU on industry bargaining reforms. The council’s chief executive, Alexi Boyd, <a href="https://www.theaustralian.com.au/nation/keep-it-simple-on-pay-bargaining-deal-for-unions-firms/news-story/1ac98a70b256c4ea26e57184747d26d9">said</a>:</p>
<blockquote>
<p>The current bargaining system was not built for us. It is not efficient and is too complicated. We welcome the opportunity to explore new flexible single- or multi-employer options that can be customised to our circumstances. The one-size-fits-all approach doesn’t work. </p>
</blockquote>
<h2>What is industry bargaining?</h2>
<p>Industry bargaining is a common approach to wage negotiations in most European countries. It involves representatives of workers and employers negotiating over the pay and conditions to apply across specific sectors of the economy.</p>
<p>New Zealand is in the midst of introducing a form of industry bargaining through its <a href="https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_121328/fair-pay-agreements-bill">Fair Pay Agreements Bill</a>, currently before the NZ parliament. </p>
<p>An industry-level approach to award wage negotiations also operated in Australia up to the early 1990s, before the Hawke-Keating government introduced enterprise bargaining (negotiating agreements by workplace). </p>
<h2>Enterprise bargaining is broken</h2>
<p>Hawke and Keating saw enterprise bargaining as the way to modernise the industrial relations system in line with their mission to make Australia globally competitive.</p>
<p>Thirty years on, though, it is not delivering for employers or workers.</p>
<p>Unions can be involved in enterprise bargaining where they are strong enough. However, in many workplaces there is no negotiation. The employer simply puts out its proposed agreement for a vote by the employees, then submits it to the industrial relations umpire (the Fair Work Commission) for approval.</p>
<p>It has become increasingly apparent over the past decade that enterprise bargaining <a href="https://theconversation.com/theres-one-big-reason-wages-are-stagnating-the-enterprise-bargaining-system-is-broken-and-in-terminal-decline-183818">is broken</a>. In 2012, 27% of employees were covered by an enterprise agreement. By 2021 it was just 15%. </p>
<hr>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/466199/original/file-20220531-14-9c8cg6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/466199/original/file-20220531-14-9c8cg6.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/466199/original/file-20220531-14-9c8cg6.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/466199/original/file-20220531-14-9c8cg6.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/466199/original/file-20220531-14-9c8cg6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/466199/original/file-20220531-14-9c8cg6.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/466199/original/file-20220531-14-9c8cg6.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Australia Institute, The Wages Crisis Revisited</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<hr>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/theres-one-big-reason-wages-are-stagnating-the-enterprise-bargaining-system-is-broken-and-in-terminal-decline-183818">There's one big reason wages are stagnating: the enterprise bargaining system is broken, and in terminal decline</a>
</strong>
</em>
</p>
<hr>
<h2>Fears of militant unions</h2>
<p>A major concern of business advocates such as the Australian Industry Group is that industry bargaining – backed by the right to take industrial action – will further empower unions such as the Construction, Forestry, Maritime, Mining and Energy Union to pursue “pattern bargaining” claims – by which a union secures gains from one employer and then demands the same from others.</p>
<p>There is indeed a risk that extending the right to bargain and strike across industries will add to the potency of some already powerful unions. </p>
<p>But this cannot be the perennial excuse for doing nothing to give greater leverage to hundreds of thousands of low-paid workers, doing the vital work that keeps our economy and society functioning.</p>
<p>The ACTU’s proposal will not be a return to the 1960s or ‘70s, when union membership was more than 50% of the workforce and there were regular strikes in support of wage demands. </p>
<p>In those days, unions were able to push for better pay and conditions through adjustments to awards, overseen by the industrial relations court, the Conciliation and Arbitration Commission. Awards no longer serve that purpose, now being a “safety net” for workers on minimum wages.</p>
<h2>Why care workers would benefit</h2>
<p>Changing the Fair Work Act to enable industry bargaining would particularly benefit workers in industries such as child care, aged care and disability support.</p>
<p>These are highly feminised sectors where enterprise bargaining has not delivered for a variety of reasons – including the role of government funding in setting wages, and workers’ reluctance to take industrial action that is detrimental to their clients. This has led to care workers being stuck on award-level wages. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/wages-and-women-top-albaneses-ir-agenda-the-big-question-is-how-labor-keeps-its-promises-183527">Wages and women top Albanese's IR agenda: the big question is how Labor keeps its promises</a>
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</em>
</p>
<hr>
<p>Industry bargaining would enable funding bodies to be brought into pay negotiations in these sectors. </p>
<p>It would also enable workers and unions to negotiate with other business entities beside direct employers that have influence over the wages ultimately paid to employees. </p>
<p>This is important given the use of franchising structures, labour hire arrangements and complex supply chains to obscure the employment relationship between the worker and the business employing their labour. </p>
<p>To take one example, a union representing cleaners and security guards working out of the same CBD building must currently make separate agreements with the different contracting firms that employ those workers.</p>
<figure class="align-center ">
<img alt="Industry-level collective bargaining could improve outcomes for workers in the care sector and where labour-hire and contracting practices are common." src="https://images.theconversation.com/files/481484/original/file-20220829-34035-yjor8x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/481484/original/file-20220829-34035-yjor8x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=340&fit=crop&dpr=1 600w, https://images.theconversation.com/files/481484/original/file-20220829-34035-yjor8x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=340&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/481484/original/file-20220829-34035-yjor8x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=340&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/481484/original/file-20220829-34035-yjor8x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=427&fit=crop&dpr=1 754w, https://images.theconversation.com/files/481484/original/file-20220829-34035-yjor8x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=427&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/481484/original/file-20220829-34035-yjor8x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=427&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Industry-level collective bargaining could improve outcomes for workers in the care sector and where labour-hire and contracting practices are common.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>In a system of multi-employer bargaining, the building owner or building services management company – which ultimately benefits from the workers’ labour and determines its price through the contracts it makes with the cleaning and security companies – would be brought into the equation. </p>
<p>In this way, industry or multi-employer bargaining would ensure a level playing field. </p>
<p>Businesses would not have to fear a competitive disadvantage from having to pay higher wages than rival businesses. Nor could they undercut each other by outsourcing to avoid higher wages and conditions in an agreement.</p><img src="https://counter.theconversation.com/content/189394/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Forsyth is affiliated with the Centre for Future Work (Australia Institute) and the Migrant Workers Centre in Victoria. He has received funding from the Australian Research Council Linkage Program (industry partners: Australian Council of Trade Unions & The Union Education Foundation).</span></em></p>The trade union movement’s proposal to allow ‘multi-employer’ collective bargaining has won crucial support from small business advocates.Anthony Forsyth, Distinguished Professor of Workplace Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1750522022-02-21T19:08:00Z2022-02-21T19:08:00ZThinking of joining a multi-level marketing scheme or MLM as your side hustle? Read this first<figure><img src="https://images.theconversation.com/files/441190/original/file-20220117-17-17z9037.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C7200%2C4785&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Multi-level marketing (MLM) is a business model that relies on direct selling and consultants recruiting friends and relatives to also become consultants, salespeople or distributors.</p>
<p>MLM salespeople sell products – such as beauty products, kitchenwares, essential oils or health supplements – directly to end-user retail consumers. These sales are made through relationship referrals, word-of-mouth marketing, and increasingly through <a href="https://www.businessinsider.com/mlms-use-social-media-facebook-portray-financial-success-2019-7?r=AU&IR=T">social media</a>. </p>
<p>Billed as entrepreneurial self-employment, many people (<a href="https://directselling.org.au/statistics-research/">mostly women</a>) join MLMs to supplement their income or make some money while caring for kids.</p>
<p>However, while MLMs promise financial independence, flexibility and work-life balance, it’s been <a href="https://centerforinquiry.org/wp-content/uploads/sites/33/quackwatch/taylor.pdf">widely</a> <a href="https://amazingprofitsonline.com/wp-content/uploads/2021/02/AARP-Foundation-MLM-Research-Study-Report-min.pdf">reported</a> by <a href="https://slate.com/business/2018/12/multilevel-marketing-podcast-review-the-dream-facebook.html">media</a> and <a href="https://brill.com/view/journals/jlso/aop/article-10.1163-24714607-bja10029/article-10.1163-24714607-bja10029.xml">researchers</a> that very few MLM sellers make any profit.</p>
<p>To find out more, we <a href="https://eprints.qut.edu.au/216593/">surveyed</a> 287 current and former MLM consultants in Australia. </p>
<p>Many <a href="https://research.qut.edu.au/centre-for-justice/wp-content/uploads/sites/304/2022/02/Briefing-Paper-Series-Feb2022-Issue20-17022022.pdf">said</a> they made less than A$5,000 a year from their MLM business. But even this figure is likely an overestimate for many; around half of those we surveyed said they didn’t include all costs in their profit calculations.</p>
<p>Around 40% of former MLM consultants told us they left for financial reasons.</p>
<figure>
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<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/multi-level-marketing-has-been-likened-to-a-legal-pyramid-scheme-the-backlash-against-it-is-growing-117931">Multi-level marketing has been likened to a legal pyramid scheme – the backlash against it is growing</a>
</strong>
</em>
</p>
<hr>
<h2>How do MLMs work?</h2>
<p>Under Australian Consumer Law, legal MLM enterprises are not classed as pyramid schemes because consultants’ income is predominantly derived from selling products or services rather than recruiting others into the scheme.</p>
<p>However, consultants are incentivised to recruit others because recruits become their “downline”. Most MLMs offer commissions based on downlines’ sales in addition to their own sales. </p>
<p>For example: Mary recruits Jane as a consultant and now Jane is in Mary’s downline. So now Mary gets to keep a portion of the money Jane makes from her sales. Jane goes on to recruit Angela to her downline; now both Mary and Jane get to keep a portion of the money Angela makes from her sales.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/441194/original/file-20220117-27-1ws6o7f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/441194/original/file-20220117-27-1ws6o7f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/441194/original/file-20220117-27-1ws6o7f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/441194/original/file-20220117-27-1ws6o7f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/441194/original/file-20220117-27-1ws6o7f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/441194/original/file-20220117-27-1ws6o7f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/441194/original/file-20220117-27-1ws6o7f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/441194/original/file-20220117-27-1ws6o7f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Most MLMs offer commissions based on downlines’ sales in addition to their own sales.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>There are close to <a href="https://directselling.org.au/statistics-research/">half a million independent MLM sellers in Australia</a> selling products ranging from health and beauty products to craft supplies, home wares and fashion.</p>
<p>Critics say the MLM business model depends on <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/soc4.12692">exploiting women’s social circles</a> as well as aspirations or obligations to generate income while managing caring responsibilities.</p>
<h2>Is it really a side hustle if you end up losing money?</h2>
<p>The most common reason for joining an MLM is to earn extra money. But a <a href="https://www.magnifymoney.com/blog/news/survey-vast-majority-multilevel-marketing-participants-earn-less-70-cents-hour/">US survey</a> of more than 1,000 MLM sellers found the majority made less than US 70c per hour in sales – before deducting expenses.</p>
<p>Fewer than half made US$500 over five years. Nearly a third acquired credit card debt to finance their MLM involvement. </p>
<p>A <a href="https://www.aarp.org/aarp-foundation/our-work/income/multilevel-marketing/">2020 study by AARP</a> (formerly known as the American Association of Retired Persons) found 1 in 13 US adults had tried MLM at some point, and nearly half had lost money.</p>
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<p>In our <a href="https://eprints.qut.edu.au/216593/">study</a>, we were interested in the financial literacy of MLM consultants in Australia. You can <a href="https://qutc.syd1.qualtrics.com/jfe/form/SV_cUuwCVysxdvaT7U">test your financial literacy</a> using the questions we asked consultants. </p>
<p>We compared the actual and perceived financial literacy of MLM consultants, and found many were unable to answer questions assessing basic financial literacy.</p>
<p>We also asked MLM-specific financial literacy questions and found a sample of the general population (meaning people not involved in MLMs) were more likely to answer these questions correctly than most of the MLM sample.</p>
<p>We also found some respondents are particularly vulnerable to MLM recruitment as they have high levels of optimism and materialism and are overconfident of their financial knowledge. </p>
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Read more:
<a href="https://theconversation.com/should-i-pay-off-the-mortgage-asap-or-top-up-my-superannuation-4-questions-to-ask-yourself-170470">Should I pay off the mortgage ASAP or top up my superannuation? 4 questions to ask yourself</a>
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<h2>Questions to ask yourself before joining an MLM</h2>
<p>If you are considering joining an MLM, our research suggests you need to consider the following questions first.</p>
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<p><strong>1. Can I afford to join an MLM?</strong></p>
<p>You may need to purchase a starter kit or demonstration products, or pay a joining fee. Two-thirds of consultants told us they spent more than $1,000 starting their MLM business. </p>
<p>But the majority told us it took more than a year to make any profit. So if you are going to take out a loan, consider the repayment terms, including interest. </p>
<p>Some MLM companies have annual membership fees. Others have monthly or quarterly sales targets and you may feel pressured to meet these by purchasing additional products yourself to meet your quota. In fact, 40% of consultants told us they did not make any profit in their MLM business. </p>
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<p><strong>2. Do I really have the financial knowledge and skills to run my own MLM business?</strong></p>
<p>Most MLM recruits have little or no experience running a home-based business; only 20% seek ongoing advice from a financial professional.</p>
<p>This is concerning, as MLMs typically have complex commission and remuneration structures.</p>
<p>We also found many sellers overestimate their financial knowledge compared to their actual financial literacy.</p>
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<p><strong>3. Do I have all the information I need to make an informed decision to join?</strong></p>
<p>It is important to collect as much information as possible before making this decision.</p>
<p>MLM consultants and the person trying to recruit you have a vested interest in highlighting success stories and downplaying how statistically improbable it is you’ll achieve them. </p>
<p>Do your homework, compare alternatives and ask current and former consultants about their experiences to get both sides of the story. </p>
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<p class="fine-print"><em><span>Deanna Grant-Smith received funding from Ecstra Foundation to undertake this research. She is a board member of the TJ Ryan Foundation, a progressive public policy think tank. This story is part of a series on financial and economic literacy funded by Ecstra Foundation.</span></em></p><p class="fine-print"><em><span>Laura de Zwaan receives funding from Ecstra Foundation and the Financial Basics Foundation. She is affiliated with the Financial Planning Academic Forum and is an Academic Member of the Financial Planning Association. </span></em></p>Is it really a side hustle if you end up losing money? We surveyed 287 current and former MLM consultants in Australia. The findings paint a bleak picture.Deanna Grant-Smith, Associate Professor, Queensland University of TechnologyLaura de Zwaan, Lecturer, School of Accountancy, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1706062021-12-05T07:19:14Z2021-12-05T07:19:14ZHow changes to South Africa’s value-added tax affect compliance among small firms<figure><img src="https://images.theconversation.com/files/434408/original/file-20211129-15-1q40gp7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Taxes “are the dues that we pay for the privileges of membership in an organised society”.</p>
<p>As the <a href="https://www.presidency.ucsb.edu/documents/address-worcester-mass">quote</a> from US president Franklin D Roosevelt in 1936 suggests, governments across the world need to collect tax revenue to be able to provide public goods and services to their citizens. There are a number of forms of taxes. The most common taxes are personal income tax, corporate income tax, and value-added tax (VAT).</p>
<p>South Africa’s current VAT system <a href="https://www.researchgate.net/publication/290452328_Value_added_tax_A_comparative_approach_second_edition">is based</a> on New Zealand’s VAT system. It was and introduced in South Africa in 1991 at a rate of 10%, replacing the general sales tax system which was levied at 12%. </p>
<p>Since VAT is more broad-based than the general sales tax, the effect on tax revenue collected was <a href="https://econpapers.repec.org/article/tafdeveza/v_3a34_3ay_3a2017_3ai_3a1_3ap_3a56-73.htm">deemed to be neutral</a> in terms of tax revenue collection. </p>
<p>The South African VAT system is found to be mildly regressive, where a larger percentage of income is taken from the poor in comparison to the rich. But it is a good source of government revenue in comparison with other tax types, as individuals in the informal sector also contribute to the revenue stream. </p>
<p>Overall, the South African tax system is viewed as being progressive in nature, as the rich pay tax at a higher rate than the poor . Which is why VAT shouldn’t be <a href="https://openknowledge.worldbank.org/handle/10986/8630">considered in isolation</a>.</p>
<p>In an attempt to increase tax revenue collection, the VAT rate in South Africa was increased from <a href="http://www.treasury.gov.za/documents/national%20budget/2018/speech/speech.pdf#page=11">14% to 15% on 1 April 2018</a> after it had remained unchanged for 15 years (since 1993).</p>
<p>The increase in the VAT rate resulted in <a href="https://www.researchgate.net/publication/344598871_The_impact_of_increasing_VAT_rate_on_state_revenue_a_South_Africa_case">an increase in VAT payments</a> of 4.2% in 2018/19 and 5.8% in 2019/2020.</p>
<p>All entities that make sales in South Africa in excess of R1 million in a 12-month period need to register as a VAT vendor. These vendors need to levy output tax on all sales made and are seen as agents of the revenue authority. </p>
<p>The entities can also claim input tax on all purchases made on which VAT was levied, if it is used for business purposes. The net amount remaining after subtracting the input tax from the output tax must be paid to the South African Revenue Service. </p>
<p>Increasing the tax rate is a seemingly easy way to raise tax revenue. However, there are dangers. We explored one of these in <a href="https://www.emerald.com/insight/content/doi/10.1108/S1058-749720210000029004/full/html">our research</a> – the effect of changes in the VAT rate on tax compliance behaviour by small businesses in South Africa. </p>
<h2>Why small businesses?</h2>
<p>The South African Revenue Service has indicated that small businesses are a <a href="https://www.gov.za/sites/default/files/gcis_document/201409/sarscompliancepogram-2012final2-30-march.pdf">high-risk sector</a> as tax registration is particularly low in this sector. They have also indicated that an increased audit focus will be placed on small, medium and micro enterprises.</p>
<p>Our field experiment involved an online questionnaire that was completed by participants in managerial positions of small businesses. The participants were assigned to one of four possible treatment groups: where the participants experience either an increase or decrease of 1 percentage point in the VAT rate, or where the participants experience either an increase or decrease of 5 percentage points in the VAT rate.</p>
<p>Our aim was to determine whether an increase in the VAT rate might lead to larger tax evasion. The research also considered whether tax compliance behaviour would increase with a decrease in the VAT rate, since the benefit of evading taxes might seem less appealing. Some countries, such as Kenya, Greece, Belgium, Germany, Austria, Czech Republic, Bulgaria, Cyprus, Portugal and Moldova <a href="https://www.avalara.com/vatlive/en/vat-news/world-turns-to-vat-cuts-on-coronavirus-threat.html">reduced their VAT rates</a> in the wake of COVID-19 to provide some relief.</p>
<p>The issues are important because businesses might opt for non-compliance if the rate is raised. This defeats the objective of tax increases as less revenue is collected. </p>
<p>We found that tax compliance levels among small business did indeed drop when the VAT rate was increased, especially if the increase was a 5 percentage point increase.</p>
<h2>Compliance</h2>
<p>Tax compliance is the term used to describe whether taxpayers meet their legal tax obligations. This <a href="https://books.google.co.za/books/about/Taxpayer_Compliance_An_agenda_for_resear.html?id=vh03LFjGKKQC&redir_esc=y">includes</a> registering as and when required, submitting all relevant tax returns on time, reflecting the right amount of tax liability and paying that liability on time.</p>
<p>Better tax compliance obviously leads to higher tax revenue being collected for a government. </p>
<p>The study found that small business entities are inclined to reduce the VAT liability when there is an increase in the VAT rate. This may possibly be because the entity perceives it to be financially more beneficial to evade taxes when there is an increase in the VAT rate, even if considering the penalties charged if caught cheating (expected utility theory). They do so by overstating purchases rather than under-declaring sales. This leads to an increase in non-compliance and a decrease in tax revenue collection. </p>
<p>The greater the magnitude of the VAT rate increase, the greater the level of non-compliance. </p>
<p>No significant relationships were identified between a decrease in the VAT rate and tax compliance. </p>
<h2>Insights</h2>
<p>The results could be valuable to policymakers in countries considering a change in the VAT rate to increase tax revenue. </p>
<p>Our research suggests that a small increase (one percentage point) in the VAT rate could limit the extent of non-compliance compared to a large increase (five percentage points). </p>
<p>A graduated and carefully calibrated approach, where rate increases are in prospect may, therefore, be preferable to large scale, once-off increases.</p><img src="https://counter.theconversation.com/content/170606/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anculien Schoeman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A graduated and carefully calibrated approach to increases in VAT is preferable to large scale, once-off increases.Anculien Schoeman, Senior lecturer in Taxation, University of PretoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1644772021-08-03T14:47:53Z2021-08-03T14:47:53ZCanada’s small businesses could be saved by converting them to co-operatives<figure><img src="https://images.theconversation.com/files/413413/original/file-20210727-21-cwwscj.jpg?ixlib=rb-1.1.0&rect=39%2C0%2C4368%2C2896&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The COVID-19 crisis has demonstrated that our communities must be self-sustaining rather than reliant on volatile global value chains. Co-operatives bring resiliency self-determination to local economies. </span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>Most of Canada’s <a href="https://www.ic.gc.ca/eic/site/061.nsf/eng/h_03126.html#how-SME">1.2 million small- and medium-sized enterprises</a> have been affected by COVID-19. A substantial number of them remain <a href="https://content.cfib-fcei.ca/sites/default/files/2021-02/SME-Debt-and-Profitability.pdf">heavily indebted</a> as pandemic restrictions ease, while <a href="https://economics.td.com/ca-cfib">workforce shortages and supply-chain disruptions</a> are still a problem.</p>
<p>The pandemic has added to the looming succession crisis for these companies due to the growing number of owners nearing retirement who don’t have a formal plan in place for the continuity of their businesses.</p>
<p>This coming succession crunch, part of what’s known as “<a href="https://www.forbes.com/sites/sarazeffgeber/2020/11/28/the-new-silver-tsunami/?sh=472e9bb96d69">the silver tsunami</a>,” was already being <a href="https://content.cfib-fcei.ca/sites/default/files/article/documents/rr3277_0.pdf">discussed by the early 2010s in Canada</a>. Economic experts in <a href="https://nebula.wsimg.com/39cbf55b5770b4a1c05ed7b3f95f32ae?AccessKeyId=980CF231281E274931F9&disposition=0&alloworigin=1">the United States</a> and <a href="https://cadmus.eui.eu/handle/1814/18116">the European Union</a> have also been warning of a similar phenomenon on the horizon for more than a decade.</p>
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<img alt="A white haired bearded man in a farmer's field with a younger woman looking at a laptop." src="https://images.theconversation.com/files/414348/original/file-20210803-21-304xau.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/414348/original/file-20210803-21-304xau.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=391&fit=crop&dpr=1 600w, https://images.theconversation.com/files/414348/original/file-20210803-21-304xau.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=391&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/414348/original/file-20210803-21-304xau.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=391&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/414348/original/file-20210803-21-304xau.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=491&fit=crop&dpr=1 754w, https://images.theconversation.com/files/414348/original/file-20210803-21-304xau.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=491&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/414348/original/file-20210803-21-304xau.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=491&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The so-called silver tsunami means owners of small- and medium-sized enterprises are pondering succession plans, but few have one in place.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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<p>At stake before the pandemic was <a href="https://content.cfib-fcei.ca/sites/default/files/2018-11/Getting-the-transition-right-succession-planning-report.pdf">$1.5 trillion in business assets</a> and the future of a <a href="https://www.theglobeandmail.com/globe-investor/retirement/the-boomer-shift-how-canadas-economy-is-headed-for-majorchange/article27159892/">large swath of Canada’s workforce</a> because so many Canadians are employed by small- and medium-sized companies.</p>
<p>Overall, Canadian business owners <a href="https://content.cfib-fcei.ca/sites/default/files/2018-11/Getting-the-transition-right-succession-planning-report.pdf">aren’t prepared for succession</a> or for the impacts of crises on their companies. Jobs and the socio-economic well-being of Canadian communities are potentially at risk.</p>
<h2>The co-operative solution</h2>
<p>In Canada, a research team I lead recently published <a href="https://8dcc0d1e-6766-44ed-aac2-decdbe17ca29.filesusr.com/ugd/51eec9_0979bf0c39624ad3bd93fa74efd07643.pdf">a report on succession at these companies</a> and found that business owners first think of transferring their companies to their children or other family members (43 per cent). Retiring owners or those with businesses at risk also seek to sell to third-party investors (24 per cent). </p>
<p>But, as our research also shows, less than half of retirement-aged owners (48 per cent) are familiar with the intricacies of succession, while only 14 per cent have formal succession plans in place. </p>
<p>Another succession option is the strategy of <a href="https://www.oise.utoronto.ca/clsew/UserFiles/File/CoopConvert/1.English-BCCs-evidence_from_the_litterature_-_what_enables_conversion_to_co-operatives_in_canada.pdf">business conversions to co-operatives</a> — selling or transferring companies to employees or other community stakeholders who then <a href="https://canada.coop/wp-content/uploads/2021/05/conversions_to_co-operatives_-_background_information_5_feb._2021_.pdf">create co-operatives</a> and continue the business’s activities.</p>
<p>These converted businesses can take on <a href="https://www.coopconvert.ca/copy-of-about">different member ownership forms</a>, such as worker, consumer, multi-stakeholder or producer co-ops. More than 200 of them, of all these different types, already exist in Canada.</p>
<p>As my earlier research on <a href="https://www.euricse.eu/publications/italys-worker-buyouts-in-times-of-crisis/">Italy’s worker buyouts</a> and <a href="https://www.haymarketbooks.org/books/1585-workers-self-management-in-argentina">Argentina’s worker-recuperated companies</a> has shown, businesses that convert to co-operatives represent a tried-and-true rescue and succession strategy. However, our new study shows that in Canada it’s still <a href="https://atkinsonfoundation.ca/site/uploads/2018/12/AF_CoopPlanningReport_110918-FINAL.pdf">a largely overlooked option</a> by most owners of small- and medium-sized enterprises and employees, unions and policy-makers.</p>
<h2>An overall lack of understanding of co-ops</h2>
<p>The combination of a lack of succession planning and the failure to consider the co-operative-conversion solution is tied to a related finding from our research — only 30 per cent of Canadian small business owners are familiar with co-ops, and many of them have mistaken ideas about them. Those include misconceptions about inefficiency due to the democratic governance of co-ops and assumptions that they lack competitiveness.</p>
<p>Decades of research into the co-operative model’s advantages and strengths shows that these concerns are unfounded. Co-operatives offer <a href="https://fernwoodpublishing.ca/book/cooperatives_in_a_postgrowth_era">stable business models</a> that <a href="https://www.euricse.eu/jeod_articles/invited-paper-worker-cooperatives-good-sustainable-jobs-in-the-community/">provide good jobs</a>. They are often better than conventional businesses in terms of <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/documents/publication/wcms_108416.pdf">responding to and surviving crises</a> because they <a href="https://neweconomics.org/uploads/files/co-ops-unleashed.pdf">source capital locally rather than with distant shareholders</a>, <a href="https://www.euricse.eu/jeod_articles/editorial-the-cooperative-advantage-for-community-development/">meet local community needs</a>, and <a href="https://www.academia.edu/44641480/Co_operatives_territories_and_social_capital_Reconsidering_a_theoretical_framework">foster trust</a> and mutual aid.</p>
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<strong>
Read more:
<a href="https://theconversation.com/banking-co-ops-run-by-black-women-have-a-longtime-legacy-of-helping-people-155796">Banking co-ops run by Black women have a longtime legacy of helping people</a>
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<p>During economic downturns, for instance, co-op members will often <a href="https://www.ess-europe.eu/sites/default/files/report_cecop_2012_en_web.pdf">amend wages and revenue distribution rather than lay off employees</a>.</p>
<p>The overall lack of knowledge of the co-op model is not surprising. There is <a href="https://base.socioeco.org/docs/paper-mainstreaming-sse-12-november-2016-edit-untfsse.pdf">systemic bias against solidarity-based economic activity</a> by mainstream economists and business pundits, and a related <a href="https://eric.ed.gov/?id=EJ1132676">lack of co-op content in post-secondary business and economics courses</a>.</p>
<p>At the same time, Canada already has <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/191213/dq191213c-eng.htm">almost 6,000 non-financial co-ops</a>, making up, <a href="https://canada.coop/wp-content/uploads/2021/04/coop_gdp_report_english_web.pdf">according to a recent study</a>, 3.4 per cent of its GDP ($61.2 billion). That’s significantly more than the telecommunication sector’s and mining sector’s 1.8 per cent of GDP respectively, and the auto parts and manufacturing sector’s 0.9 per cent of GDP.</p>
<p>There is no doubt that co-ops are competitive and sustainable businesses. It should then be in the interest of business owners, employees, unions, local communities, as well as policy-makers, to know more about the co-op option for succession and business survival purposes.</p>
<h2>Pathways for conversion to co-ops</h2>
<p>Part of this should include a renewed education campaign about Canada’s already established pathways for businesses to convert to co-ops. Co-operative advocates like the <a href="https://canadianworker.coop/employee-succession-the-co-op-solution/">Canadian Worker Co-op Federation</a> and <a href="https://ontario.coop/business-succession">provincial associations like the one in Ontario</a> have long been leading the way. But business schools and mainstream media need to step up, too. How-to resources and conversion diagnostic tools need to be made readily available, and case studies of the co-op model should be promoted.</p>
<p>Examples of Canadian businesses that have successfully converted to co-ops include Ontario’s <a href="https://www.arontheatre.com/">Aron Theatre Co-operative</a>, <a href="https://www.moonbeamcoop.com/home">Épicerie Co-op Grocery</a>, and <a href="https://arisearchitects.com/">Arise Architects</a>; <a href="https://battleriverrailway.ca/">Battle River Railway</a> in Alberta; and <a href="https://www.glitterbeancafe.com/">Glitter Bean Café</a> in Halifax.</p>
<p>Most of them are in Québec, however, due to <a href="https://chantier.qc.ca/discover-social-economy/definition/?lang=en">favourable social economic policies</a> related to co-op development, the role of unions and labour funds in the conversion process and the unique forms of co-operative businesses found there. </p>
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<a href="https://images.theconversation.com/files/413416/original/file-20210727-18-1slpfvi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Delivery automobiles with the St-Hubert logo in a parking lot." src="https://images.theconversation.com/files/413416/original/file-20210727-18-1slpfvi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/413416/original/file-20210727-18-1slpfvi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/413416/original/file-20210727-18-1slpfvi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/413416/original/file-20210727-18-1slpfvi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/413416/original/file-20210727-18-1slpfvi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/413416/original/file-20210727-18-1slpfvi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/413416/original/file-20210727-18-1slpfvi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Delivery automobiles are seen at the St-Hubert restaurant in Laval, Québec.</span>
<span class="attribution"><span class="source">Laurent Bélanger/Creative Commons</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>These include <a href="https://community-wealth.org/sites/clone.community-wealth.org/files/downloads/tool-oeoc-multistakeholder-coop.pdf">multi-stakeholder solidarity co-ops</a>, and <a href="https://canadianworker.coop/about/related-types-of-co-ops/">worker-shareholder co-ops</a>, where the worker co-op co-owns the firm with more traditional investors. Examples of conversions to co-ops in Québec include dozens in the <a href="https://www.fcfq.coop/">funeral sector</a>, the <a href="https://fcpq.coop/">ambulance sector</a>, the recently formed newspaper co-op <a href="https://www.ledevoir.com/culture/medias/590335/les-medias-regionaux-de-cn2i-lancent-un-abonnement-numerique">CN2i</a>, and even a <a href="https://www.newswire.ca/fr/news-releases/les-cooperatives-de-travailleurs-dans-la-restauration---un-modele-qui-fonctionne--617809733.html">co-op St-Hubert franchise</a> in Laval.</p>
<p>Canada’s co-ops stepped up to respond to community needs during the COVID-19 crisis more quickly and had immediate local impact compared to government and corporate responses.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/canadas-co-operatives-helping-communities-during-and-after-the-coronavirus-135477">Canada’s co-operatives: Helping communities during and after the coronavirus</a>
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<p>The COVID-19 crisis has demonstrated that <a href="https://www.resilience.org/stories/2020-04-07/comparative-resilience-8-principles-for-post-covid-reconstruction/">our communities must be self-sustaining rather than reliant on volatile global supply chains</a>. Co-ops <a href="https://doi-org.myaccess.library.utoronto.ca/10.1177/0973005221991624">bring resiliency</a> and <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8206912/">self-determination</a> to local economies. </p>
<p>The co-operative model needs therefore to be seriously considered and nurtured as viable responses to closing firms and lost jobs as a result of the pandemic and the looming business succession crunch.</p><img src="https://counter.theconversation.com/content/164477/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marcelo Vieta receives funding from the Social Sciences and Humanities Research Council of Canada (SSHRC) for the Conversion to Co-operatives Project (CoopConvert), which has assisted in funding the research reported on in this article.</span></em></p>The co-operative business model needs to be seriously considered and nurtured as a viable response to closing companies and lost jobs as a result of the pandemic.Marcelo Vieta, Associate Professor, Adult Education and Community Development, Ontario Institute for Studies in Education, University of TorontoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1626332021-06-14T15:09:52Z2021-06-14T15:09:52ZStereotypes about young jobless South Africans are wrong: what they’re really up to<figure><img src="https://images.theconversation.com/files/406143/original/file-20210614-73866-7r6c4c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Makeshift shops have mushroomed as people try to make ends meet amid South Africa's excessive unemployment.</span> <span class="attribution"><span class="source">Hobermunemployment. an Collection/Universal Images Group via Getty Images</span></span></figcaption></figure><p>South Africa has one of the highest youth unemployment rates in the world. A whopping <a href="http://www.statssa.gov.za/?p=14415">63%</a> of its young people between the ages of 15 and 24 years are jobless. A large proportion of these young people have never worked in the formal economy.</p>
<p>The media frequently portray young people excluded from wage work as inactive, aimless and alienated from mainstream society. This image feeds into fears of crime, violence and social unrest in which people who are jobless are cast as a “<a href="https://insideeducation.co.za/2021/06/07/south-africas-youth-unemployment-crisis-a-ticking-time-bomb/">ticking time bomb</a>” that poses a threat to a country’s stability.</p>
<p>But this is a very misleading characterisation. Most analyses of unemployed youth fail to grapple with the reality that unemployment in the sense of “doing nothing” is not a feasible option for most young people.</p>
<p>As research in many parts of Africa, including <a href="https://journals.sagepub.com/doi/abs/10.1177/0309132517690039?journalCode=phgb">Kenya</a>, <a href="https://link.springer.com/article/10.1007/s12132-012-9156-y">Ethiopia</a> and <a href="https://www.tandfonline.com/doi/abs/10.1080/03057070.2010.485784">Zimbabwe</a>,
has shown, unemployed young people use a wide range of economic strategies and practices to acquire an income. </p>
<p>I conducted <a href="https://www.tandfonline.com/doi/full/10.1080/02533952.2021.1909949?src=">research</a> in Zandspruit informal settlement, north of Johannesburg, in 2015 and 2016, on the lives, livelihoods and struggles of mostly young men who were either unemployed or marginally employed. It included life and work history interviews with 37 young people, a survey of 100 young people and a mapping exercise of the local economy, including semi-structured interviews with 40 local business owners. </p>
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<strong>
Read more:
<a href="https://theconversation.com/how-covid-19-is-likely-to-slow-down-a-decade-of-youth-development-in-africa-159288">How COVID-19 is likely to slow down a decade of youth development in Africa</a>
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<p>My <a href="https://www.tandfonline.com/doi/full/10.1080/02533952.2021.1909949?src=">study</a> showed that many unemployed young people are engaged in a variety of economic activities. Many of these are not necessarily recorded as a form of self employment or informal employment, but they consume a large part of young people’s lives.</p>
<h2>Survival strategies</h2>
<p>I found that livelihoods included running car wash ventures, fixing people’s cars as informal mechanics, and renting back rooms or shacks. Other activities included wiring illegal electricity connections for a fee and street-side gambling. They also acquired sponsorship from NGOs and local politicians to support local initiatives and community based organisations that helped local youth access educational and economic opportunities.</p>
<p>These livelihood strategies rarely constituted a formalised business or enterprise. Many young people in Zandspruit combined short stints in the formal economy with forms of “hustling” and self-employment. </p>
<p>In many instances, informal livelihoods were taken up because of the loss of a job or the failure to find one. There was also evidence of young men rejecting jobs in some of the low-paying sectors, in favour of self employment in the informal economy. </p>
<p>This not only reflects a desire for greater social autonomy and social power – something that low end wage employment denied them. It also shows the importance of investing in highly localised relationships in a time of generalised precariousness. </p>
<p>These informal livelihoods are embedded in networks and social relations that are critical to young people surviving unemployment. </p>
<p>Take a car wash business for example. While often analysed as a standalone business or enterprise, my research highlighted how it also operates as a connecting point for a dense web of social relations that underpin and connect various informal enterprises. These included the taxi industry (drivers and washers), informal mechanics, a <em>chesanyama</em> (barbecue joint) and the local drug trade.</p>
<p>A car wash also provides a space where young men (most of whom also make a living informally) can gather to socialise and pass time. These social relationships are a critical part of young men gaining leverage within a particular niche of the local economy. They also serve as a critical source of male sociality and mutual aid that one young man described as “<a href="https://www.tandfonline.com/doi/full/10.1080/02533952.2021.1909949?src=">communal living</a>”.</p>
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Read more:
<a href="https://theconversation.com/how-giving-young-people-basic-financial-skills-helps-them-find-jobs-118860">How giving young people basic financial skills helps them find jobs</a>
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<p>The relationship between the young men who gather at car wash stands to pass time and “hustle” a living are premised on an understanding of “flexible reciprocity”, whereby those who currently have money, or are employed in some form, help those who are without. These networks of support offered an informal kind of “insurance”, as one of my interlocutors put it, but also social relations that provided alternative avenues to earn an income. As Sandile, aged 27, explained:</p>
<blockquote>
<p>There is a big communal living. You are not going to starve when you have friends.</p>
</blockquote>
<p>The social embeddedness of informal work is a double-edged sword. On the one hand, these relations of interdependence are a critical source of support and solidarity. On the other hand, the relations are embedded within complex power dynamics that can reproduce forms of social differentiation and inequality.</p>
<p>They also require informal entrepreneurs to invest so much in personal relationships, fees and protection that many are left with little money to invest in improving their business. </p>
<h2>What needs to be done</h2>
<p>Given the failure of the formal economy to produce enough jobs, policy makers and governments often present self employment in the informal economy as the solution to youth unemployment. </p>
<p>For instance, the provincial government of Gauteng, the country’s economic hub, has identified the mostly informal “<a href="https://www.gep.co.za/wp-content/uploads/2018/12/Gauteng-Township-Economy-Revitalisation-Strategy-2014-2019.pdf">township economy</a>” as key to tackling unemployment and promoting entrepreneurship.</p>
<p><a href="https://www.tandfonline.com/doi/abs/10.1080/03736245.1982.10559651?journalCode=rsag20#:%7E:text=Positioned%20just%20to%20the%20west,3">Townships</a> are historically black urban residential areas. They are mostly characterised by underdevelopment and high levels of poverty.</p>
<p>The renewed interest in the “township economy” is important considering the extent of unemployment, poverty and the damaging legacy of township marginalisation under apartheid. <a href="https://ccs.ukzn.ac.za/files/Bond%20Townships.pdf">Townships</a> were seen as labour dormitories for white businesses in towns and suburbs, and not intended to have their own viable economies. </p>
<p>But the government’s interest in township economies as the generators of jobs, entrepreneurship and “<a href="https://www.gep.co.za/wp-content/uploads/2018/12/Gauteng-Township-Economy-Revitalisation-Strategy-2014-2019.pdf">socially inclusive wealth</a>” is woefully out of sync with the reality of most township enterprises. They are too small to offer an escape from poverty.</p>
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Read more:
<a href="https://theconversation.com/more-children-in-zimbabwe-are-working-to-survive-whats-needed-149033">More children in Zimbabwe are working to survive: what's needed</a>
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<p>While the idea of entrepreneurship is gaining traction among young people, research suggests that only a small number see it as a viable livelihood and <a href="https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwimvZe7lY_xAhVHY8AKHR_OCu4QFjAFegQICRAD&url=https%3A%2F%2Fwww.uj.ac.za%2Ffaculties%2Fhumanities%2Fcsda%2FDocuments%2FSiyakha_Report___Oct_2016_Print_FINAL%255B1%255D.pdf&usg=AOvVaw3gRgEBzDsvwJ3Gh3qLvvib">something to strive towards</a>.</p>
<p>The majority have a strong preference for stable formal sector jobs, which they associate with economic stability and social mobility.</p>
<p>The growing insecurity of jobs in the formal economy highlights the urgency of <a href="https://theconversation.com/why-south-africa-needs-to-ensure-income-security-beyond-the-pandemic-137551?fbclid=IwAR2VQ5qwKv0ZvVJWt2qBfB17xLpfRs9p_TMS0xDJPxnDk0q0mOrpi9Rhni4">stronger social protection and income support</a> for young people.</p><img src="https://counter.theconversation.com/content/162633/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hannah J. Dawson receives funding from the National Research Foundation of South Africa (grant number: 116768), which I gratefully acknowledge. </span></em></p>Many unemployed young people are engaged in a variety of economic activities. These may not necessarily be recognised as a form of self employment or informal employment.Hannah J. Dawson, Senior Researcher, Southern Centre for Inequality Studies, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1579512021-04-26T19:42:05Z2021-04-26T19:42:05ZCanada should embrace Québec’s simple incorporation system for small businesses<figure><img src="https://images.theconversation.com/files/397081/original/file-20210426-21-1grf4au.jpg?ixlib=rb-1.1.0&rect=0%2C441%2C5265%2C2908&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Canada should take cues from Québec on how it incorporates small businesses.</span> <span class="attribution"><span class="source">(François Gha/Unsplash)</span></span></figcaption></figure><p>The federal government’s 2021 budget is significant in at least two respects. </p>
<p>First, it affirms that small businesses are <a href="https://www.canada.ca/en/department-finance/news/2021/04/budget-2021-address-by-the-deputy-prime-minister-and-minister-of-finance.html">“the vital heart of our economy.”</a> Government support in times of extreme economic stress is therefore critical. </p>
<p>Second, the budget looks to policy innovation at the provincial level as inspiration for nationwide reform — Québec’s universal child-care system being the latest example. </p>
<p>While parliamentarians and provincial legislatures debate unprecedented fiscal measures to support Canada’s small businesses, they should also consider how to embrace another Québec innovation: <a href="https://law.queensu.ca/sites/default/files/Robert%20M.%20Yalden%20PDF%20QBCA%20Article%202021.pdf">its simplified incorporation model for small businesses</a>. With some minor refinements, Québec’s system of <a href="https://www.thebalancesmb.com/incorporation-2948235">incorporating businesses</a> can and should be deployed across the country. </p>
<p>The pandemic has reinforced the need to advance reform in an area where we lag behind the United States and many other members of the Organization of American States (OAS).</p>
<p>Small businesses employ <a href="https://www.ic.gc.ca/eic/site/061.nsf/eng/h_03114.html#a01">two-thirds of Canadian workers</a> and account for about half of Canada’s <a href="https://www150.statcan.gc.ca/n1/pub/11f0027m/2011070/part-partie1-eng.htm">private sector economy</a>. Yet some neglect to incorporate <a href="https://fbc.ca/blog/pros-and-cons-incorporating-small-business/">due to concerns about costs and paperwork</a>, even though constant regeneration of small business is critical to long-term prosperity. </p>
<h2>Access to capital</h2>
<p>Incorporation helps with this process. When businesses legally become corporate entities or companies, they increase their access to capital because they separate assets in a way that is attractive to those who finance early stage businesses. Business assets are set apart from personal assets that can be subject to claims from other creditors. </p>
<p>Incorporation also encourages entrepreneurs to keep creating new businesses. The limited liability that comes with incorporation caps a founding shareholder’s losses to the amount they invested in the business. This better enables a founder to manage insolvency risks.</p>
<p>Importantly, some of the newest providers of capital to small businesses now rely on algorithms to evaluate credit risk. They’re also increasingly prepared to invest in a corporation without asking <a href="https://www.theglobeandmail.com/business/article-michele-romanows-clearbanc-hits-unicorn-status-raising-us100-million/">for personal guarantees</a>. The ability to contain losses to what was already invested is critical to an entrepreneur’s ability to build other businesses. </p>
<figure class="align-center ">
<img alt="Two women stand in front of a bakery." src="https://images.theconversation.com/files/397107/original/file-20210426-15-1fuaz1q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/397107/original/file-20210426-15-1fuaz1q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/397107/original/file-20210426-15-1fuaz1q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/397107/original/file-20210426-15-1fuaz1q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/397107/original/file-20210426-15-1fuaz1q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/397107/original/file-20210426-15-1fuaz1q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/397107/original/file-20210426-15-1fuaz1q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The co-owners of a bakery in Hamilton, Ont., pose outside of their store in October 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Tara Walton</span></span>
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</figure>
<p>But more than that, the pandemic has taught many small businesses that there are advantages to moving from the informal to formal economy. Incorporation can greatly assist in getting access to government support. </p>
<p>Demonstrating that a business satisfies eligibility criteria is easier when it is a distinct legal entity with financial statements. Government delivery of funds is also facilitated when dealing <a href="https://ceba-cuec.ca/">with corporations that already have business numbers and business bank accounts</a>. </p>
<p>Québec was especially focused on helping small business when it adopted a <a href="http://legisquebec.gouv.qc.ca/en/showdoc/cs/S-31.1">new Business Corporations Act (QBCA) in 2010</a>. To this day, the QBCA’s simplified incorporation structure remains highly innovative, allowing a sole shareholder to dispense with:</p>
<p>• Establishing a board of directors</p>
<p>• Adopting by-laws (for example, rules about internal governance)</p>
<p>• Appointing an auditor</p>
<p>• Holding shareholder meetings</p>
<p>• Keeping records of board and shareholder meetings</p>
<h2>Reduces costs</h2>
<p>More than 25 years as a business lawyer taught me that removing redundant administrative burdens would simplify incorporation for many small businesses. It would also reduce costs that can serve as a barrier to incorporating.</p>
<p>But it is one thing to innovate, and another for innovation to be embraced. To date, only a few hundred companies have opted into Québec’s <a href="http://www.finances.gouv.qc.ca/documents/Autres/en/AUTEN_loiSocieteActions.pdf">simplified regime</a>. In contrast, several OAS countries have adopted simplified incorporation systems, many of which have met with extraordinary success. Colombia alone <a href="http://revistas.pucp.edu.pe/index.php/agendainternacional/article/download/19368/19486/">has seen the creation of hundreds of thousands</a> of simplified corporations. </p>
<figure class="align-center ">
<img alt="A man stands in an empty ballroom." src="https://images.theconversation.com/files/397114/original/file-20210426-21-z111j5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/397114/original/file-20210426-21-z111j5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/397114/original/file-20210426-21-z111j5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/397114/original/file-20210426-21-z111j5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/397114/original/file-20210426-21-z111j5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/397114/original/file-20210426-21-z111j5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/397114/original/file-20210426-21-z111j5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Colombian event organizers speak in their business’s ballroom in October 2020. Thousands of businesses in Colombia have been created after the country adopted a simplified corporation system.</span>
<span class="attribution"><span class="source">(AP Photo/Fernando Vergara)</span></span>
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<p>The benefits have been significant and include increased employment and social security contributions and benefits and <a href="https://dx.doi.org/10.2139/ssrn.2357578">enhanced tax revenue for governments</a>.</p>
<p>What accounts for the difference in uptake? Québec’s approach could certainly be more user-friendly. For example, it could give a founder the option to dispense with a board and other formalities by ticking a box when incorporating, rather than the current practice of requiring more legal documents to be filed after incorporation. </p>
<h2>Efforts need to be publicized</h2>
<p>But the OAS and countries like Colombia have also put substantial effort into ensuring that the option is well known and its use actively encouraged. In contrast, Québec has done little to publicize its regime. Unfortunately, a strategy that relies on word of mouth is no strategy. </p>
<p>What is required is a sustained government communications plan that alerts small businesses to the system’s advantages, encouraging them to embrace it from the moment they go online to incorporate.</p>
<p>The QBCA’s adoption marked an important step in recognizing the value inherent in simplified incorporation processes. But more needs to be done for that value to be fully realized. </p>
<p>Other jurisdictions in Canada need to follow Québec’s lead, adjusting and perfecting its model. They then need to deploy communications strategies that will resonate with small businesses — all inexpensive but consequential steps that would help drive economic recovery for small businesses in the post-pandemic era.</p><img src="https://counter.theconversation.com/content/157951/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert Yalden does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The federal government should embrace Québec’s simplified incorporation model for small businesses. With some minor refinements, Québec’s regime can and should be deployed across the countryRobert Yalden, Stephen Sigurdson Professor in Corporate Law & Finance, Queen's University, OntarioLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1552962021-02-16T01:38:21Z2021-02-16T01:38:21ZWould ‘COVID loans’ be a more affordable and sustainable way to support national economies?<figure><img src="https://images.theconversation.com/files/384332/original/file-20210215-23-1quv34u.jpg?ixlib=rb-1.1.0&rect=14%2C0%2C4875%2C3262&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>Faced with a COVID-19 pandemic of unknown severity and duration, governments around the world are looking for effective and sustainable ways to maintain economic confidence and employment. </p>
<p>Even New Zealand, where lockdowns have been few and short-lived, is confronting the reality of repeated lockdowns, especially since the United Kingdom variant has <a href="https://www.theguardian.com/world/2021/feb/15/new-zealands-auckland-covid-outbreak-is-uk-variant-says-ardern">now been detected</a> in community cases.</p>
<p>With vaccines likely to require all of 2021 to be <a href="https://www.health.govt.nz/our-work/diseases-and-conditions/covid-19-novel-coronavirus/covid-19-vaccines/covid-19-our-vaccine-roll-out-plan">rolled out in significant numbers</a>, more economic disruption has to be expected this year, with each successive shock further testing economic resilience.</p>
<p>For many countries, <a href="https://www.beehive.govt.nz/sites/default/files/2020-03/Wage%20subsidy%20scheme%20factsheet.pdf">targeted wage subsidies</a> of some form have been the principal tool for maintaining employment and economic confidence, often complemented by small business loans. While these have clearly been useful, they also have clear limitations — not least their cost. </p>
<p>This raises questions about the ongoing viability of wage subsidies and small business loans as the economic response measures of choice.</p>
<p>My recently published <a href="https://doi.org/10.1080/00779954.2021.1877185">policy paper</a> proposes an alternative approach, modelled on student loans schemes such as those operating in New Zealand, Australia and the UK. </p>
<p>Rather than attempting to support firms and households to pay wages, rents and other expenses, this alternative enables firms and households whose incomes have fallen due to the pandemic to take out government-supported “COVID loans” to restore their pre-pandemic income levels — a form of “revenue insurance”.</p>
<p>I argue this alternative approach will be not just more affordable and sustainable, but will also be more effective and more equitable.</p>
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<h2>Lowering the burden on future taxpayers</h2>
<p>Insuring small business and household revenues means they should be able to meet all their outgoings, not just wages and rents which are subject to selective support measures under the current approach. </p>
<p>Borrowers can simply determine which outgoings they need to prioritise, and access the resources they need to meet those costs.</p>
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Read more:
<a href="https://theconversation.com/close-contact-test-results-will-be-crucial-to-whether-aucklands-level-3-lockdown-is-extended-beyond-three-days-155289">Close contact test results will be crucial to whether Auckland’s level 3 lockdown is extended beyond three days</a>
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<p>This also simplifies administration, since only one support scheme is required, rather than multiple schemes. With <a href="https://www.parliament.nz/en/pb/research-papers/document/00PLLawrp13011/student-loan-scheme">student loan schemes</a> already in place in many countries, experience and infrastructure are available to support the rollout of the proposed loans.</p>
<p>Just as importantly, firms and households that take out COVID loans would effectively be borrowing against their own future incomes. This places less of a burden on future taxpayers than wage subsidies financed through extra government debt. </p>
<p>In turn this makes the approach more equitable than debt-financed wage subsidies, since that extra government debt is a charge against future generations.</p>
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<h2>More affordable for governments</h2>
<p>In terms of affordability, loans to make up drops in income would be repaid via tax surcharges on those taking out loans, as and when their future incomes allow. This means would-be borrowers need not be deterred by fixed repayment deadlines in times of ongoing economic uncertainty. </p>
<p>Furthermore, since any firms and households borrowing against their own future incomes will ultimately be repaying their debt, COVID loans represent an asset on government balance sheets. </p>
<p>This offsets the extra liabilities governments take on by borrowing to finance these loans — something wage subsidies do not do. This increases the affordability of a loans-based approach from a government perspective (even allowing for defaults and subsidies implicit in student loan schemes).</p>
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Read more:
<a href="https://theconversation.com/its-still-too-soon-for-nz-to-relax-covid-19-border-restrictions-for-travellers-from-low-risk-countries-154643">It's still too soon for NZ to relax COVID-19 border restrictions for travellers from low-risk countries</a>
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<p>Using illustrative data for New Zealand, my paper shows COVID loans are 14% cheaper than wage subsidies (and small business loans) in terms of their impact on net government debt. </p>
<p>More importantly, they are almost 2.5 times as effective in terms of the level of support they offer. And since 67% of the cost of COVID loans ultimately falls to those who make use of them (allowing for defaults and implicit subsidies), they place less of a burden on future taxpayers than deficit-funded wage subsidies.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1361438019769700357"}"></div></p>
<h2>Maintaining economic confidence</h2>
<p>Affordability is also enhanced by a subtle feature of the proposed scheme. By making COVID loans generally available to all firms and households, the scheme sustains economic confidence. </p>
<p>Firms and households are assured the other firms and households they rely on for their own economic prospects have access to the same effective financial lifeline throughout the pandemic.</p>
<p>Households can therefore keep spending confidently, and employers can confidently keep employing. This means the loans might actually not need to be used to any great extent. Their strength lies in preventing economic decline — much like a vaccine’s strength lies in preventing disease.</p>
<p>Finally, COVID loans are not just a sustainable policy tool for minimising the economic harm of COVID-19. They also provide a benchmark for assessing how cost-effective other support measures such as wage subsidies have been, and a possible solution for future pandemics.</p><img src="https://counter.theconversation.com/content/155296/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Meade does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Instead of wage subsidy and business loan schemes, allowing households, workers and employers to borrow against future income could be more efficient and equitable in the long run.Richard Meade, Research Fellow in Economics, and in Social Sciences & Public Policy, Auckland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1548892021-02-11T18:42:56Z2021-02-11T18:42:56ZValentine’s Day: COVID-19 wilted the flower industry, but sustainability still a thorny issue<figure><img src="https://images.theconversation.com/files/383446/original/file-20210210-19-123749r.jpg?ixlib=rb-1.1.0&rect=321%2C171%2C6247%2C4255&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A worker cuts roses to be shipped to the U.S. and Europe at a flower farm in Madrid, Colombia, in August 2020.</span> <span class="attribution"><span class="source">(AP Photo/Fernando Vergara)</span></span></figcaption></figure><p>Cut flowers are a multi-billion-dollar business globally, closely linked to social events and holidays, such as Christmas, Hanukkah and Mother’s Day, and to happy and sad occasions, like weddings and funerals.</p>
<p>And then there’s Valentine’s Day.</p>
<p>In the United States alone, an <a href="https://smartasset.com/insights/the-economics-of-flowers">estimated $1.9 billion worth of cut flowers are sold on or before Valentine’s Day</a> each year. As Valentine’s Day approaches, and the chill of winter lingers, it leaves one wondering: Where do all these flowers come from? How do those roses get from grower’s land to lover’s hand? </p>
<p>As a professor who studies sustainability, I’ve investigated the impact of many business models, including cut flowers. If there’s enough money to be made (or favour to be won), the social and environmental implications of business decisions often are trumped by short-term economics.</p>
<h2>The flower industry</h2>
<p>Since 2019, the worldwide cut flower market had been blooming. The market for cut flowers, houseplants and landscape greenery was expected to <a href="https://www.petalrepublic.com/floristry-and-floriculture-statistics/">grow roughly 6.3 per cent over the five years ending in 2024</a>.</p>
<p>But that market wilted to <a href="https://www.reportlinker.com/p05817698/Global-Cut-Flowers-Industry.html">an estimated US$29.2 billion in 2020</a>, a 6.2 per cent contraction from 2019, largely due to the pandemic. In top spot, the United States accounted for US$7.9 billion, or 27 percent of the 2020 global market. </p>
<p>Florists typically sell cut flowers, as well as floral arrangements and potted plants. These items come from both domestic and foreign flower farms and wholesalers. In the U.S. and Canada around 80 per cent of these flowers are imported.</p>
<p>Florists are small businesses. In both Canada and the United States, the average florist has only about two employees. In Canada, the florist industry consists of an estimated <a href="https://www.ibisworld.com/canada/market-research-reports/florists-industry/">2,822 retail businesses, 5,054 employees and annual sales revenue of $602 million</a>. In the U.S. last year, there were <a href="https://www.ibisworld.com/united-states/market-research-reports/florists-industry/">31,663 florists, with 65,000 employees, in a US$5 billion market</a>.</p>
<h2>The cut flower supply chain</h2>
<p>The cut flower supply chain often starts in Colombia. About <a href="https://hellohomestead.com/as-local-cut-flower-industry-grows-research-shows-what-challenges-growers-will-face/">80 per cent of cut flowers sold in the U.S. are imported</a>. Colombia is the No. 1 country of origin and <a href="https://www.floraldaily.com/article/9015340/infographic-looking-at-the-us-flower-industry/">Ecuador is No. 2</a>. </p>
<p>While the Netherlands produces 80 percent of the world’s tulips, <a href="https://www.petalrepublic.com/floristry-and-floriculture-statistics/">Colombia and Ecuador are the world’s largest producers of carnations and roses, respectively</a>. As a symbol of love and romance, <a href="https://safnow.org/">roses are the world’s most popular flowers</a>. </p>
<p>The top <a href="https://www.petalrepublic.com/floristry-and-floriculture-statistics/">four flower producing countries in 2019, in terms of export revenues</a>, were: The Netherlands ($4.6 billion), Colombia ($1.4 billion), Ecuador ($879.8 million) and Kenya ($709.4 million). </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/383858/original/file-20210211-21-1ewtm9a.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Table showing rank of various flower exporting countries" src="https://images.theconversation.com/files/383858/original/file-20210211-21-1ewtm9a.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/383858/original/file-20210211-21-1ewtm9a.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=298&fit=crop&dpr=1 600w, https://images.theconversation.com/files/383858/original/file-20210211-21-1ewtm9a.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=298&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/383858/original/file-20210211-21-1ewtm9a.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=298&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/383858/original/file-20210211-21-1ewtm9a.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=375&fit=crop&dpr=1 754w, https://images.theconversation.com/files/383858/original/file-20210211-21-1ewtm9a.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=375&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/383858/original/file-20210211-21-1ewtm9a.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=375&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>Flowers grown on the Bogotá Plateau are cut, combined into bundles and hydrated for up to 24 hours — in preparation to enter the “cold chain.” As roses travel to Bogotá’s El Dorado International Airport in refrigerated trucks, shipping and storage temperatures are maintained at about 1C. </p>
<p>Next, those roses are flown to Miami, Fla. In fact, <a href="https://globalnews.ca/news/3248691/reality-check-where-does-your-bouquet-of-roses-come-from/">most cut flowers destined for the U.S. or Canada arrive via Miami International Airport</a>. </p>
<p>In the case of Edmonton-based Grower Direct, roses and other cut flowers are loaded onto refrigerated trucks for direct delivery to stores across Canada. The entire journey, <a href="https://www.growerdirect.com/a-cut-flowers-journey">from farm to flower shop, takes as little as four days</a>. Despite the speedy journey, <a href="https://www.petalrepublic.com/floristry-and-floriculture-statistics/">45 per cent of all cut flowers die before they are sold</a>. </p>
<h2>Low wages, pesticides and greenhouse gases</h2>
<p>Sustainability attempts to balance social, environmental and economic implications of decisions and actions, today and into the future. </p>
<p>While the cut flower industry provides jobs for producers and distributors, there is a price. The <a href="https://laborrights.org/">International Labor Rights Fund</a> notes that the industry has a reputation for low wages and poor working conditions. Workers on Colombian flower farms are predominantly female. They work <a href="https://brownpoliticalreview.org/2019/07/every-rose-thorn-exposing-cut-flower-industry/">16 or more hours a day for a monthly wage of about $300</a>.</p>
<figure class="align-center ">
<img alt="A woman walking through a greenhouse filled with pink roses, carries a large bunch of flowers." src="https://images.theconversation.com/files/383448/original/file-20210210-17-1d6xj2c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/383448/original/file-20210210-17-1d6xj2c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/383448/original/file-20210210-17-1d6xj2c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/383448/original/file-20210210-17-1d6xj2c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/383448/original/file-20210210-17-1d6xj2c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/383448/original/file-20210210-17-1d6xj2c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/383448/original/file-20210210-17-1d6xj2c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A farm worker cuts roses to be thrown away at the Maridadi Flowers farm in Naivasha, Kenya, on Mar. 19, 2020, after lockdowns and border restrictions strangled the cut flower industry.</span>
<span class="attribution"><span class="source">(AP Photo/Patrick Ngugi)</span></span>
</figcaption>
</figure>
<p>Since flowers are not classified as edible, they are often exempt from pesticide regulations. Thus, <a href="https://globalnews.ca/news/3248691/reality-check-where-does-your-bouquet-of-roses-come-from/">many flower production workers in Ecuador and Colombia have suffered from respiratory problems, rashes and eye infections</a> caused by exposure to toxic chemicals in fertilizers, fungicides and pesticides. </p>
<p>The Fairtrade movement is a response to this mistreatment. It <a href="https://www.fairtrade.ca/en-CA/Stay-in-touch/Blog/2020/February/Flower-Power.html">aims to improve working conditions for flower farmers and workers</a>, as well as living conditions in their communities, by ensuring they earn a living wage and by protecting their rights.</p>
<p>Moving flowers from South America to North America, in refrigerated trucks and cargo planes, in and out of warehouses along the cold chain, yields a large carbon footprint. During a typical peak season, <a href="https://atmos.earth/cut-flowers-environmental-carbon-cost-facts/">30-35 cargo planes arrive in Miami from Bogotá every day to meet American demand</a>. While local production would ground some of those flights, growing flowers in greenhouses can use as much energy as shipping them from Colombia by air freight. </p>
<h2>COVID-19 impact</h2>
<p>On March 11, 2020, the World Health Organization declared COVID-19 a “global pandemic.” The timing could hardly have been worse for the cut flower industry. </p>
<figure class="align-center ">
<img alt="Overhead view of two people surrounded by flowers, chopping them up on a wooden table." src="https://images.theconversation.com/files/383447/original/file-20210210-21-r19rax.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/383447/original/file-20210210-21-r19rax.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=404&fit=crop&dpr=1 600w, https://images.theconversation.com/files/383447/original/file-20210210-21-r19rax.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=404&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/383447/original/file-20210210-21-r19rax.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=404&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/383447/original/file-20210210-21-r19rax.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=508&fit=crop&dpr=1 754w, https://images.theconversation.com/files/383447/original/file-20210210-21-r19rax.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=508&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/383447/original/file-20210210-21-r19rax.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=508&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Flower shop employees destroy unsold flowers in St. Petersburg, Russia, after shops were ordered closed to limit the spread of the coronavirus, on Apr. 13, 2020.</span>
<span class="attribution"><span class="source">(AP Photo/Dmitri Lovetsky)</span></span>
</figcaption>
</figure>
<p>Spring is the industry’s <a href="https://www.pri.org/stories/2020-05-08/coronavirus-pandemic-wilts-global-flower-industry">busy season, with weddings, Easter and Mother’s Day</a>. But soon, weddings were being postponed and flower shops closed. As lockdowns went into place around the world, the market wilted. Growers in Kenya and Colombia began to toss roses away.</p>
<p>Now, as lockdowns and other restrictions begin to ease up, there is optimism that 2021 will be better, starting with Valentine’s Day. Indeed, the Society of American Florists anticipates “<a href="https://www.floraldaily.com/article/9293169/florists-gearing-up-for-busier-valentine-s-day-due-to-pandemic/">the biggest Valentine’s Day in decades</a>” in 2021.</p>
<p>But what if you forget to bring a bouquet of roses to your Valentine on Sunday? You could remind him or her or them about the social and/or environmental ills of the cut flower industry. </p>
<p>Or, you could just buy the damn flowers. But be sure they are Fairtrade certified or locally grown. And be sure to wear a mask.</p><img src="https://counter.theconversation.com/content/154889/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul D. Larson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>After a withered 2020 due to COVID-19, the flower industry is hoping to blossom. The industry, which remains far from sustainable, remains a multi-billion dollar operation.Paul D. Larson, CN Professor of Supply Chain Management, University of ManitobaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1456112020-09-08T12:17:08Z2020-09-08T12:17:08ZBusiness liability shield is holding up another coronavirus bailout – a legal scholar explains why immunity is unnecessary and even harmful<figure><img src="https://images.theconversation.com/files/356601/original/file-20200904-16-osu9o9.jpg?ixlib=rb-1.1.0&rect=32%2C55%2C3062%2C2004&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Reasonable precautions like advising customers to wear masks can be enough to prevent successful lawsuits. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/sign-ecouraging-social-distancing-while-shopping-seen-at-news-photo/1227967095">Erik McGregor/LightRocket via Getty Images</a></span></figcaption></figure><p><a href="https://www.npr.org/2020/07/30/897345014/gop-argues-business-liability-protections-must-be-added-to-the-next-relief-packa">Senate Republicans’ push to grant companies sweeping immunity</a> from civil liability for failure to adequately protect workers and customers from infection has been one of the key sticking points in negotiations over another coronavirus relief bill.</p>
<p>Senate Majority Leader Mitch McConnell <a href="https://www.nytimes.com/2020/04/28/business/businesses-coronavirus-liability.html">has warned of an “avalanche”</a> of lawsuits that will stymie economic recovery efforts if Congress does not act quickly. McConnell said <a href="https://thehill.com/homenews/senate/495155-mcconnell-draws-red-line-coronavirus-bill-wont-pass-senate-without-liability">he won’t let another bailout pass the Senate</a> unless it also shields companies from coronavirus-related liability. The Senate is expected to debate their latest measure as it <a href="https://www.senate.gov/legislative/2020_schedule.htm">returns from recess on Sept. 8</a>.</p>
<p><a href="https://press.uchicago.edu/ucp/books/book/chicago/O/bo35855002.html">My research</a> on the role of civil lawsuits in reducing foodborne illness outbreaks suggests that fears of excessive litigation are unwarranted. What’s more, the modest liability exposure that does exist is important to ensuring businesses take reasonable coronavirus precautions as they resume normal operations.</p>
<h2>How not to be careless</h2>
<p>As a general matter, businesses are subject to civil liability for <a href="https://injury.findlaw.com/accident-injury-law/proving-fault-what-is-negligence.html">carelessness</a> that causes injury to others. The law defines carelessness as a failure to exercise “reasonable care.”</p>
<p>In applying this standard, courts consider several factors: </p>
<ul>
<li>Did the business take available <a href="https://www.law.cornell.edu/wex/negligence">cost-effective precautions</a> to prevent injury? </li>
<li>Did the business comply with <a href="https://www.nolo.com/dictionary/negligence-per-se-term.html">laws or regulations</a> designed to protect public health and safety? </li>
<li>Did the business conform to <a href="http://www.kohlerlaw.com/CustomasProofofNegligence">industry standards</a> for health and safety? </li>
<li>Did the business exercise <a href="https://www.lawnow.org/the-reasonable-person/">common sense</a>? </li>
</ul>
<p>If the answer to one or more of the questions is no, then a court may conclude that the business was careless and is subject to liability for damages to customers who suffered harm. </p>
<p>In the context of the current pandemic, I believe that reasonable care sets a clear standard for business owners. Invest in cost-effective precautions like ensuring employees wear masks and gloves and keep customers apart. Follow the guidance of health officials and all health and safety regulations. Keep up with what other similar businesses are doing to prevent infection. Use common sense.</p>
<p>Law-abiding, thoughtful <a href="https://www.nytimes.com/2020/04/26/business/coronavirus-states-businesses-reopen.html">business owners</a> – those who care about the safety of their employees and their patrons – are likely to exercise reasonable care to prevent COVID-19 transmission with or without the threat of a lawsuit.</p>
<p>For example, the owner of a nail salon in Georgia back in April <a href="https://www.nytimes.com/2020/04/28/opinion/coronavirus-reopening-georgia.html">described her plans for reopening</a>. The salon will accept patrons by appointment only, conduct pre-screening telephone interviews for signs of illness and limit the number of people in the salon at any one time. They’ll take temperatures before allowing people to enter, require hand-washing, equip employees and patrons with masks and gloves, and sanitize all work areas between appointments.</p>
<p><a href="https://www.nytimes.com/2020/04/26/business/coronavirus-states-businesses-reopen.html">Conscientious business owners</a> like this have no reason to fear a lawsuit alleging they failed to take reasonable precautions. </p>
<p>Predictions of <a href="https://www.washingtonpost.com/business/2020/04/24/liability-shield-white-house-coronavirus/">“frivolous” lawsuits</a> appear to be generating unnecessary anxiety among business groups. But they shouldn’t. Personal injury lawyers representing victims work on a <a href="https://law.freeadvice.com/litigation/litigation/lawyer_contingency_fee.htm">contingency fee</a> basis. This means that they earn fees only when they bring cases with a strong enough chance of winning to reach a favorable settlement or a judgment.</p>
<p>Lawyers have no incentive to bring sure losers, and they risk being <a href="https://www.cga.ct.gov/PS98/rpt%5Colr%5Chtm/98-R-0916.htm">disciplined</a> for professional misconduct if they do so. For these reasons, <a href="https://www.library.ca.gov/Content/pdf/crb/reports/FrivolousActionFilingsReport.pdf">frivolous lawsuits are rare</a> and highly unlikely in the context of COVID-19 transmission claims against businesses.</p>
<h2>Exaggerated fears</h2>
<p>The best available data does not support dire warnings about excessive litigation. As of Sept. 1, <a href="https://www.huntonak.com/en/covid-19-tracker.html">4,655 civil lawsuits have been filed</a> related to COVID-19. Only 28 of these are personal injury claims by business patrons for COVID-19 exposure, and an additional 83 are claims by employees against companies for inadequate protection from infection in the workplace, personal injury and wrongful death.</p>
<p>Most of the claims involved other issues, such as 1,086 insurance disputes over business losses and 856 claims for alleged civil rights violations. </p>
<p>If there is any reason to fear excessive litigation, these numbers suggest that the real threat is from lawsuits filed by business owners against their insurance companies and individuals protesting public health measures designed to prevent another economic shutdown – not from personal injury claims. </p>
<p>Even for business owners who fail to take reasonable precautions, the prospect of a personal injury claim is still remote.</p>
<p>To successfully sue a business for COVID-19 transmission, a patron would have to prove that he or she contracted COVID-19 from the business and not from some other source. However, most people infected with COVID-19 currently have no reliable way of <a href="https://www.eff.org/deeplinks/2020/04/challenge-proximity-apps-covid-19-contact-tracing">identifying the source</a> of their infection. The <a href="https://annals.org/aim/fullarticle/2762808/incubation-period-coronavirus-disease-2019-covid-19-from-publicly-reported">gap of three to 11 days</a> between infection and illness, the difficulty of <a href="https://news.fiu.edu/2020/tracking-the-path-of-an-outbreak">recalling all of one’s contacts</a> during that interval and <a href="https://www.nytimes.com/2020/04/06/opinion/coronavirus-testing.html">limited testing</a> for the virus present formidable obstacles to establishing causation.</p>
<p>Moreover, a business would not be liable to patrons who knowingly and voluntarily assumed the risk of infection. Patrons of crowded stores or businesses where many customers and employees are not wearing masks, for example, would not have viable legal claims even if they can prove carelessness and causation.</p>
<p>As for claims by employees against careless businesses, most of these will be covered by <a href="https://www.forbes.com/sites/aaroncolby/2020/05/13/the-workplace-and-covid-19-workers-compensation-to-the-rescue/#7dcf4bcb6295">workers’ compensation</a>, which precludes employees from filing negligence claims for workplace injuries.</p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<h2>Sending a strong signal</h2>
<p>Because of these considerable challenges, viable legal claims related to COVID-19 are likely to be extremely rare. </p>
<p>Yet even a small number of personal injury lawsuits act as a nudge, encouraging the entire business community to adopt reasonable precautions. This is one of the lessons of civil litigation arising out of foodborne illness outbreaks.</p>
<p>As I document in my 2019 book, “<a href="https://press.uchicago.edu/ucp/books/book/chicago/O/bo35855002.html">Outbreak: Foodborne Illness and the Struggle for Food Safety</a>,” a handful of high-profile lawsuits against food companies have encouraged businesses at every link along the supply chain to improve their safety practices. That’s what happened after lawsuits against <a href="https://www.foodsafetynews.com/2017/12/jack-in-the-box-e-coli-outbreak-25th-anniversary/">Jack in the Box</a> over contaminated hamburgers in 1993 and <a href="https://www.foodsafetynews.com/2009/09/meaningful-outbreak-7-dole-spinach-e-coli-outbreak/">Dole</a> over <em>E. coli</em> in baby spinach in 2006.</p>
<p>Similarly, the prospect of liability for COVID-19 transmission is likely to encourage business owners to invest in cost-effective precautions, follow the advice of public health authorities, adopt industry safety standards and use common sense.</p>
<p>I believe shielding business owners from this liability is one kind of immunity that will not help end the current crisis.</p>
<p><em>This is an updated version of an <a href="https://theconversation.com/why-offering-businesses-immunity-from-coronavirus-liability-is-a-bad-idea-137562">article originally published</a> on May 1, 2020.</em></p><img src="https://counter.theconversation.com/content/145611/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Timothy D. Lytton is a member of the American Association for Justice</span></em></p>Senate Republicans continue to push for sweeping liability protection for companies from coronavirus-related lawsuits, but research and evidence suggests there’s little real risk.Timothy D. Lytton, Distinguished University Professor & Professor of Law, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1395512020-08-24T19:46:22Z2020-08-24T19:46:22ZVoters aren’t the only ones who dread slow mail – struggling small businesses are also at risk from Postal Service delays<figure><img src="https://images.theconversation.com/files/354260/original/file-20200823-20-g88wmi.jpg?ixlib=rb-1.1.0&rect=0%2C125%2C5245%2C3458&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The USPS has suffered delays in recent months.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Election-2020-Voting-Worries/7fcf93634189491e9637c746e0a586f1/22/0">AP Photo/J. Scott Applewhite</a></span></figcaption></figure><p><a href="https://www.bloomberg.com/news/articles/2020-08-20/thousands-of-baby-chicks-die-in-mail-in-latest-postal-imbroglio?sref=Hjm5biAW">Thousands of baby chicks</a> shipped to small poultry farmers through the U.S. Postal Service have arrived at their destinations dead in recent weeks. </p>
<p>This was just one of the disturbing results of <a href="https://www.nytimes.com/2020/08/21/us/postal-service-mail-rural.html">changes to how the Postal Service operates</a>, which have led to <a href="https://www.businessinsider.com/usps-documents-show-an-8-decline-after-dejoy-joined-2020-8">widespread delays in mail delivery</a> and <a href="https://www.washingtonpost.com/business/2020/08/19/postal-service-election-ballots/">concerns among Democrats about the USPS’s ability to delivery mail-in ballots</a> during the 2020 elections. There have also been reports of delayed <a href="https://www.cnbc.com/2020/08/19/usps-slowdown-delays-delivery-of-life-saving-meds-patients.html">lifesaving medications</a>, <a href="https://www.latimes.com/california/story/2020-08-20/usps-cutbacks-post-office-chaos">rotting meat and spoiled fruits</a>. </p>
<p><a href="https://scholar.google.com/citations?user=ciYF81EAAAAJ&hl=en&oi=ao">I have studied</a> the supply chain industry for over 15 years. One thing people outside the field don’t often recognize is the critical role the USPS plays in America’s logistics infrastructure, especially for small businesses and in rural areas, as the <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2016/RARC-WP-16-015_0.pdf">only service</a> that delivers to nearly every U.S. address, six days a week. <a href="http://digitalsupplynetwork.com/index.html">My research shows</a> how it can continue to do so.</p>
<h2>Dead critters</h2>
<p>The dead chicks show just how important the Postal Service is to small businesses and their supply chains. </p>
<p>Hatcheries typically ship the birds to farmers by USPS, the <a href="https://www.washingtonpost.com/business/2020/08/22/chicks-cockroaches-crickets-frogs-how-mail-delays-are-affecting-live-animal-trade/">only service that allows people to send live animals</a>. However, newborns can survive only 72 hours without food or water, which translates into a tight delivery window. Upon arrival at the regional destination, the cargo goes to a local mail processing facility for sorting and then aboard a delivery truck for distribution.</p>
<p><a href="https://www.forbes.com/sites/alisondurkee/2020/08/17/sorting-equipment-removed-changes-to-election-mail-all-the-postal-service-usps-changes-raising-alarm-louis-dejoy/#394ae665106f">Recent changes to operations</a> – such as reduced overtime and prohibiting extra trips, moves <a href="https://www.govexec.com/pay-benefits/2020/07/looking-cut-costs-new-usps-leader-takes-aim-overtime-and-late-trips/166917/">intended</a> to address <a href="https://www.ttnews.com/articles/usps-grapples-financial-crisis-mail-delays-continue">USPS’s severe fiscal problems</a> – have slowed down the processing and distribution of packages, leading to buildup and causing delays. The consequences are particularly grievous for live animals, such as chicks, crickets and other small critters delivered by the USPS. It also causes losses to perishable goods such as <a href="https://www.latimes.com/california/story/2020-08-20/usps-cutbacks-post-office-chaos">meat</a> and flowers. </p>
<p>But beyond organics, small businesses, pharmacies and online businesses also rely on dependable deliveries to keep their supply chains humming or to ensure consumers get orders on time.</p>
<p>In the past, it’s rarely been a problem. And USPS has a very good track record. Data from <a href="https://www.myshipmatrix.com/MSM_PVHDemo/shipmatrix.aspx">ShipMatrix</a>, a delivery analytics company, shows that the Postal Service delivered 95% of packages on time in May – before the delays began – which <a href="https://about.usps.com/what/performance/service-performance/">it has maintained for many years</a>.</p>
<p>An <a href="https://oversight.house.gov/news/press-releases/new-postal-service-documents-show-nationwide-delays-far-worse-than-postal">internal document released by House Democrats</a>, however, shows that on-time delivery dropped under 85% in July. </p>
<h2>Role in the supply chain</h2>
<p>To appreciate the importance of a reliable post office, we can look at the percentage of retailers that rely on it for package delivery. <a href="https://www.digitalcommerce360.com/sso-login/?redirect=https%3A%2F%2Fwww.digitalcommerce360.com%2Foauth%2Fauthorize%2F%3Fresponse_type%3Dcode%26client_id%3DSJZPG7spnN2c7FWSwoUd5YeKjQZhhxDahCZXJsm7%26redirect_uri%3Dhttp%3A%2F%2Fwww.top500guide.com%2Fmy-account%2Flogin%2F">Nearly 20% of the top 1,000 retailers</a> fulfill at least some of their e-commerce orders through the Postal Service. </p>
<p>The USPS is even more important for small- and medium-sized businesses because of its wide reach and affordable flat rates. For instance, <a href="https://blog.etsy.com/news/files/2020/07/Etsy-COVID-relief-letter_7.22.20.pdf">over 90% of U.S. Etsy sellers depend on</a> the USPS.</p>
<p>Delays can mean a loss of business or costly refunds. Their customers can easily find alternative sellers online, and larger retailers like Walmart and Costco can offer faster delivery alternatives free – so the ability to get products fast and reliably is vital for small retailers with narrow margins.</p>
<p>The Postal Service is particularly vital for businesses in rural or isolated regions trying to participate in the growing e-commerce economy. Unlike UPS or FedEx, the Postal Service <a href="https://about.usps.com/publications/pub100.pdf">has the infrastructure</a> to reach all corners of the country, six days a week – which is mandated by law. In fact, nearly <a href="http://proximityone.com/zip_urban_rural.htm">half of all U.S. ZIP codes represent rural areas</a>, which USPS is able to serve cost-effectively to sellers and customers.</p>
<p><a href="https://www.wsj.com/articles/u-s-mail-does-the-trick-for-fedex-ups-1407182247">UPS and FedEx themselves also rely on the USPS</a> to deliver packages the “last mile” – the term for the final stage in the delivery process – especially in rural areas, because it isn’t profitable for them to operate in regions with low population densities. This means delays at the Postal Service can have ripple effects across the delivery system.</p>
<p>Without a reliable Postal Service, small businesses may need to resort to pricier FedEx and UPS options. This means higher costs that could severely hamper their ability to operate and compete on top of the impact of the pandemic and economic lockdowns.</p>
<h2>How to stay reliable</h2>
<p>While Postmaster General Louis DeJoy said the USPS is <a href="https://www.nytimes.com/2020/08/18/us/politics/postal-service-suspends-changes.html">reversing recent changes</a> that caused the delays until after the elections, something will have to be done to deal with the Postal Service’s dire financial state. It’s <a href="https://www.gao.gov/key_issues/us_postal_service_financial_viability/issue_summary">losing billions of dollars a year</a> due to a mixture of <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2018/RARC-WP-18-004.pdf">declining snail-mail volumes</a>, a legal requirement to <a href="https://www.cnn.com/2020/08/22/business/postal-service-losses-bailout/index.html">fund pensions for 75 years</a> and other factors. <a href="https://www.washingtonpost.com/powerpost/house-poised-to-pass-bill-to-boost-us-postal-service-amid-trump-attacks/2020/08/21/c9196fa8-e3c6-11ea-8181-606e603bb1c4_story.html">Political gridlock</a> means a bailout is unlikely. </p>
<p>In my view, DeJoy’s changes were overly drastic in a too-short time, but I believe some cost-cutting over a longer period of time will be necessary to <a href="https://www.gao.gov/key_issues/us_postal_service_financial_viability/issue_summary#:%7E:text=Poor%20financial%20situation%3A%20USPS's%20overall,billion%20in%20fiscal%20year%202018.&text=Insufficient%20cost%20savings%3A%20The%20savings,have%20dwindled%20in%20recent%20years">repair its balance sheet</a>. </p>
<p>But that doesn’t mean the USPS can’t continue to play its critical role. <a href="http://digitalsupplynetwork.com/index.html">My own research on supply chains</a> suggests that the USPS can both address its budget shortfalls and remain the only genuinely nationwide provider of low-cost, last-mile delivery for small businesses and isolated regions. The Postal Service is still operating with older, pre-digital technologies, and <a href="https://www.uspsoig.gov/tags/modernizing">urgent upgrades</a> to its delivery and last-mile systems – such as utilizing artificial intelligence to improve delivery routing and facility management – are necessary to ensure it can compete effectively against as well as cooperate with rivals like UPS, FedEx and even Amazon in the growing e-commerce economy. This would help reverse its recent declines in revenue. </p>
<p>However, if the focus is merely on cutting costs without modernization, small businesses and rural America will have to prepare for a future in which they might not be able to rely on USPS as <a href="https://postalmuseum.si.edu/node/2134">they have for 245 years</a>.</p><img src="https://counter.theconversation.com/content/139551/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ednilson Bernardes does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Postal Service plays a critical role in the supply chains of small businesses and in keeping rural America connected. There’s no reason it can’t continue to do so despite its financial woes.Ednilson Bernardes, Professor of Supply Chain Management, West Virginia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1419202020-07-28T21:04:01Z2020-07-28T21:04:01ZStartup founders help each other weather the COVID-19 crisis<figure><img src="https://images.theconversation.com/files/349749/original/file-20200727-33-1fx7vyh.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5184%2C3888&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Staying in touch with other entrepreneurs via video calls during COVID-19 builds a sense of community among startup founders, research has shown.</span> <span class="attribution"><span class="source">(Chris Montgomery/Unsplash)</span></span></figcaption></figure><p>Anna (a pseudonym), a startup founder in the Montréal area, went through an emotional rollercoaster ride that’s familiar to us all since the onset of the COVID-19 pandemic. At first she tried to stay positive and keep a stiff upper lip. And then she slumped, and thought to herself: “Oh my God, this is horrible; this is never going to end.”</p>
<p>The pandemic has had a devastating impact on small businesses. <a href="https://www.cfib-fcei.ca/sites/default/files/2020-07/COVID-19-survey-results-June15.pdf">A June survey by the Canadian Federation of Independent Business</a> finds that 49 per cent of Canadian small businesses are either fully closed or only partially open, 46 per cent are making half or less of their normal sales and a third are using half or less of their staff. </p>
<p>For entrepreneurs like Anna who were just getting their businesses off the ground — developing their product, looking for investors and finding their first customers — the challenges are even more daunting. </p>
<p>So how are new startups weathering the storm?</p>
<h2>Building a sense of community</h2>
<p>For the past three months as part of <a href="https://www.researchgate.net/project/Entrepreneurial-pivoting-during-the-Covid-19-pandemic">a larger study</a>, our team has organized bi-weekly group conversations on Zoom with a dozen entrepreneurs. </p>
<p>These conversations have led to an exchange of information, but equally importantly, we found they helped entrepreneurs build a sense of community. As Anna said in our interview: </p>
<blockquote>
<p>“Talking to fellow founders, hearing the trials and tribulations, it’s just good to vent some of this out … so people can have a sense of community and support.” </p>
</blockquote>
<p>In our conversations, entrepreneurs discussed new challenges they were facing, which Benoit (a pseudonym) described as “going back to square one.” For some, online retail was the only way to save their businesses, but they lacked e-commerce experience. </p>
<p>How do you hire a photographer to take pictures of your products under a lockdown? How do you replace in-person customer training with educational videos? What are the best channels for advertising your product? And how do you do all of this while reducing your operating expenses? </p>
<p>We also found that entrepreneurs needed information about new opportunities. For example, in response to the pandemic, the Canadian government has implemented a number of programs for the startup sector, including <a href="https://www.cbc.ca/news/politics/trudeau-covid19-mar27-business-1.5512151">financial support for small businesses</a>. In our group conversations, entrepreneurs readily shared information about what programs were available, how to apply and who to contact. </p>
<p>Entrepreneurs also had concerns about managing their teams when the traditional office life is, for now anyway, a thing of the past. How do you bring on new hires when you cannot meet with them in person? How do you maintain team morale when everyone is working remotely? How do you organize collaboration online? </p>
<h2>Sharing expertise</h2>
<p>Information sharing was not the only benefit entrepreneurs derived from group conversations. We noticed that even entrepreneurs who said, in interviews, that they hadn’t derived much new information from meetings seemed to enjoy sharing their expertise with others, and still occasionally dropped into our Zoom chats.</p>
<p>We found that our group conversations about the experience of going through this exceptional time together helped entrepreneurs feel less alone. One participant, Rodrigo (a pseudonym), was “very happy to see how [other entrepreneurs] are doing and that they’re keeping up and they’re hanging in there; that’s always very inspiring.”</p>
<p>Nina (a pseudonym) said she found it “useful to see that there are actually some startups that are in the same boat as us …. Because we look at social media and there are some industries that are booming and it doesn’t make you feel very good when you’re not.”</p>
<figure class="align-center ">
<img alt="A woman with a laptop participates in a video conference meeting" src="https://images.theconversation.com/files/349748/original/file-20200727-63428-1scldlp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/349748/original/file-20200727-63428-1scldlp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/349748/original/file-20200727-63428-1scldlp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/349748/original/file-20200727-63428-1scldlp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/349748/original/file-20200727-63428-1scldlp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/349748/original/file-20200727-63428-1scldlp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/349748/original/file-20200727-63428-1scldlp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Connecting over video conference with fellow entrepreneurs about their challenges during COVID-19 helped them feel less alone.</span>
<span class="attribution"><span class="source">(Pixabay)</span></span>
</figcaption>
</figure>
<p>Through the interviews, we realized that group conversations originally intended to share information about the rapidly changing business landscape had in fact created openings for deeper interpersonal interactions between members. Following meetings, entrepreneurs described reaching out to their peers for followup advice and guidance, and sometimes just to offer personal encouragement. </p>
<h2>Creating trust</h2>
<p>Why were our group conversations able to evolve from an information exchange to a community-building platform? </p>
<p>For starters, entrepreneurs came from different industries and were not directly competing with each other. This made them feel less constrained in giving advice and in openly discussing the challenges they were facing. </p>
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Read more:
<a href="https://theconversation.com/social-networks-play-a-key-role-when-entrepreneurs-cut-ties-to-their-companies-139290">Social networks play a key role when entrepreneurs cut ties to their companies</a>
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<p>Another important reason was that all entrepreneurs personally knew the group facilitator, <a href="https://www.linkedin.com/in/renjiebutalid/">Renjie Butalid</a>, and many had previously participated in programs at <a href="https://www.mcgill.ca/dobson/">McGill’s Dobson Centre for Entrepreneurship</a>. In this way, the groups’ success was predicated on the pre-existing face-to-face relationships that helped foster trust.</p>
<p>While our study continues, our results point so far to the important role peer relationships play in helping entrepreneurs get through the current crisis. They also suggest that universities can help entrepreneurs build peer relationships. And these relationships play a critical role in building a resilient entrepreneurial ecosystem.</p>
<p><em>Renjie Butalid, co-founder of the Montreal AI Ethics Institute, contributed to this article.</em></p><img src="https://counter.theconversation.com/content/141920/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elena Obukhova works for McGill University. She has received funding from the McGill University's Center for Strategy Studies in Organizations. </span></em></p><p class="fine-print"><em><span>Daphne Demetry works for McGill University. She has received funding from the McGill University's Center for Strategy Studies in Organizations.</span></em></p>How are startup entrepreneurs getting through the COVID-19 pandemic? Talking to each other to offer tips, expertise and a sympathetic ear is helpful, according to an ongoing study.Elena Obukhova, Assistant Professor, Strategy and Organization, McGill UniversityDaphne Demetry, Assistant Professor, Strategy and Organization, McGill UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1405172020-06-18T12:19:04Z2020-06-18T12:19:04ZWhat do struggling small businesses need most? Time – and bankruptcy can provide it<figure><img src="https://images.theconversation.com/files/342538/original/file-20200617-94044-c3lefm.jpg?ixlib=rb-1.1.0&rect=90%2C147%2C5373%2C3489&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">For some small businesses, temporary will become permanent.</span> <span class="attribution"><span class="source">AP Photo/Elaine Thompson</span></span></figcaption></figure><p>The coronavirus pandemic and lockdown <a href="https://www.oberlo.com/blog/small-business-statistics#:%7E:text=Small%20companies%20create%201.5%20million%20jobs%20annually%20and%20account%20for,small%20and%20medium%2Dsized%20businesses">forced nearly a third</a> of all small businesses in the United States to close. Some <a href="https://www.washingtonpost.com/business/2020/05/12/small-business-used-define-americas-economy-pandemic-could-end-that-forever">have shut down for good</a> – one <a href="http://www.doi.org/10.3386/w26989">estimate puts the percentage</a> at almost 2%, or over 100,000 so far. </p>
<p>Those that remain and are gradually opening up must navigate a host of restrictions, including <a href="https://www.latimes.com/california/story/2020-05-17/coronavirus-la-businesses-reopening-curbside-service-challenges">limits on customers</a>, who themselves <a href="https://www.bostonglobe.com/2020/04/28/business/getting-haircut-may-never-be-same-after-coronavirus/">may be reluctant</a> to get a haircut, dine out or engage in other activities that put them near others. Even in parts of the country that <a href="https://www.theguardian.com/us-news/2020/may/06/missouri-coronavirus-economy-governor-mike-parson">haven’t yet experienced a lot</a> of COVID-19 cases, businesses have reopened to <a href="https://www.npr.org/2020/05/18/857872960/businesses-are-reopening-but-customers-may-not-be-ready-to-go-back">significantly smaller crowds</a>, <a href="https://time.com/5835435/coronavirus-business-reopen-struggling/">imperiling their survival</a>.</p>
<p>What these businesses need most right now is time – breathing space that temporarily freezes expenses while letting them continue to operate and figure out a plan to keep going. In many cases, that means declaring bankruptcy. </p>
<p>While bankruptcy is often associated with going out of business, it’s also meant to help viable companies develop a path back to profitability. The problem is bankruptcy law doesn’t provide enough time to do this in the middle of a pandemic. Ongoing health concerns will likely subdue economic activity for who knows how long, even as bills and other costs pile up. </p>
<p>As <a href="https://scholar.google.com/citations?user=9cadkB0AAAAJ&hl=en&oi=ao">bankruptcy</a> <a href="https://law.vanderbilt.edu/bio/paige-skiba">scholars</a>, we believe there’s a way to fix this.</p>
<h2>Job creators</h2>
<p><a href="https://theconversation.com/can-a-business-still-be-small-with-500-employees-137449">Small businesses</a> – specifically, those with fewer than 20 employees, like your local restaurant, nail salon and pet sitter – <a href="https://www.oberlo.com/blog/small-business-statistics#:%7E:text=Small%20companies%20create%201.5%20million%20jobs%20annually%20and%20account%20for,small%20and%20medium%2Dsized%20businesses">make up roughly 90%</a> of all private companies and account for nearly two-thirds of all <a href="https://www.oberlo.com/blog/small-business-statistics#:%7E:text=Small%20companies%20create%201.5%20million%20jobs%20annually%20and%20account%20for,small%20and%20medium%2Dsized%20businesses">new jobs</a> created in the U.S.</p>
<p>The temporary or permanent closures of so many contributed considerably to the historic levels of unemployment experienced in <a href="https://www.bls.gov/opub/ted/2020/unemployment-rate-rises-to-record-high-14-point-7-percent-in-april-2020.htm">April and May</a>.</p>
<p>To <a href="https://theconversation.com/what-is-the-sba-an-unheralded-agency-faces-the-unprecedented-task-of-saving-americas-small-businesses-136106">save small businesses</a> and the millions they employ, Congress created the <a href="https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program">Paycheck Protection Program</a>, which can lend as much as <a href="https://www.journalofaccountancy.com/news/2020/jun/ppp-loans-provide-lifeline-but-more-needed.html">US$659 billion</a>. But businesses must use most of the proceeds for payroll. Companies still have to pay rent, utilities, insurance premiums and a host of other ongoing costs. While some have been able to defer these expenses, they can’t do so forever. Businesses will eventually be forced to deal with unpaid, unmet obligations. </p>
<p>Some businesses may have enough savings to ride out the pandemic or can access fresh capital from owners – who often wipe out their <a href="https://www.globest.com/2020/05/29/small-businesses-are-using-personal-funds-to-stay-afloat/?slreturn=20200516134627">personal savings</a>, including <a href="https://www.wsj.com/articles/coronavirus-complicates-closing-up-shop-for-older-owners-1159180645">retirement funds</a>, in the process. But for so many others, the crush of past-due expenses will threaten their ability to continue to operate, even if the business model is sound overall.</p>
<h2>Bankruptcy to the rescue</h2>
<p>While bankruptcy usually serves as an organized way to close down permanently, it can also be used to hold off creditors while a company restructures its debts and continues operations <a href="https://www.uscourts.gov/sites/default/files/data_tables/jff_7.3_0930.2019.pdf">under Chapter 11</a>. Upon filing, an <a href="https://www.cacb.uscourts.gov/faq/automatic-stay-what-it-and-does-it-protect-debtor-all-creditors">automatic stay</a> on collection efforts goes into effect, which prevents eviction, foreclosure or repossession of inventory and equipment while the business comes up with a plan.</p>
<p>For many businesses struggling in the aftermath of COVID-19, however, the issue is not a backlog of debt but simply a lack of immediate revenue to make short-term obligations, especially rent and payroll. And there’s really no knowing how long revenue will remain below normal, with <a href="https://www.nytimes.com/2020/06/15/world/coronavirus-live-updates.html">concerns that infection rates are soaring</a> in parts of the country that are opening up.</p>
<p>Until recently, very few small businesses were able to <a href="https://www.theguardian.com/business/2019/sep/08/us-small-businesses-bankruptcy-trump-reorganization-act">reorganize successfully</a> under Chapter 11, opting instead to find alternative solutions under state law or to simply <a href="https://www.talksonlaw.com/talks/law-in-the-time-of-covid-19-part-2">go out of business altogether</a>. Last year, Congress <a href="https://www.thsh.com/publications/the-small-business-reorganization-act-of-2019-gives-financially-distressed-small-businesses-a-new-lifeline">made it a little easier</a> for companies with less than $2.7 million in debt to navigate bankruptcy successfully, by reducing the regulatory burdens and offering more support. </p>
<p>But, even after lawmakers increased the debt ceiling to $7.5 million as part of their <a href="https://www.natlawreview.com/article/small-business-reorganization-act-2019-and-cares-act-expanded-restructuring">coronavirus response</a>, small businesses still don’t have what they need most right now: time. </p>
<p>In bankruptcy cases, debtors are required to adhere to extremely strict time frames, many of which are <a href="http://media.mcguirewoods.com/publications/2017/Small-Business-Deadlines-Expiration-Extension-and-Consequences.pdf">accelerated for small businesses</a>. Upon filing, debtors are required to meet with the court quickly to present a proposed plan for how they expect to be profitable going forward. Debtors have 90 days to come up with a plan, under which they can repay most creditors slowly – over the next three to five years. </p>
<p>There’s an important exception, however, for rent payments. If debtors wish to retain their leases, they need to pay timely rent going forward immediately after filing – and have to repay all past-due rent in full <a href="https://www.jimersonfirm.com/blog/2020/04/commercial-leases-bankruptcy/">as soon as their plan is confirmed</a>. In other words, while there’s some wiggle room with other past-due bills, such as wages, utilities and even taxes, there’s a hard deadline with rent, which for many is the largest expense of all. </p>
<p>These time frames and special rules regarding rent were drafted with a normal, functioning economy in mind, and did not take into account the disruption caused by a global pandemic. </p>
<h2>Respite needed</h2>
<p>A recent <a href="https://www.dropbox.com/s/gabrkhhdpkx7xge/Small%20Business%20Letter%20Final%205.26.20.pdf?dl=0%22%22">proposal delivered to Congress</a> by a group of bankruptcy scholars – including us – recommended giving small businesses affected by the global pandemic extra time during the bankruptcy process. </p>
<p>The proposed changes would freeze bill collection as normal, but also freeze court proceedings for the next six months – a desperately needed respite after which the long-term effects of the pandemic may be better understood. </p>
<p>This recommendation would encourage landlords to negotiate with debtors by providing debtors with court-mandated breathing room to escape the otherwise inflexible provisions surrounding rent. </p>
<p>It is our hope that this would afford such businesses the time and space they need to remain the backbone of the U.S. economy.</p>
<p>[<em><a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=expertise">Expertise in your inbox. Sign up for The Conversation’s newsletter and get a digest of academic takes on today’s news, every day.</a></em>]</p><img src="https://counter.theconversation.com/content/140517/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Bankruptcy is meant to offer breathing space to struggling companies, but it may not be enough given the unpredictable nature of the pandemic.Brook Gotberg, Associate Professor of Law, University of Missouri-ColumbiaPaige Marta Skiba, Economist, Professor of Law, Vanderbilt UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1406002020-06-15T12:23:31Z2020-06-15T12:23:31ZWhy hairdressers, gyms and the Trump campaign are asking people to sign COVID-19 waivers<figure><img src="https://images.theconversation.com/files/341695/original/file-20200614-153867-cshg69.jpg?ixlib=rb-1.1.0&rect=64%2C72%2C5343%2C3348&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Taking reasonable precautions, like this Iowa barber, will help protect businesses from lawsuits</span> <span class="attribution"><span class="source">AP Photo/Charlie Neibergall</span></span></figcaption></figure><p>Americans venturing out to salons and gyms after weeks sheltering in place will have to learn a new ritual: <a href="https://www.insurancejournal.com/news/national/2020/06/01/570571.htm">signing away their right to sue</a>. </p>
<p>My local YMCA now asks anyone wishing to use its gym to <a href="https://www.eugeneymca.org/reopening">sign a waiver</a>. My child’s dentist requires patients to <a href="https://www.orthoii-forms.com/COVID19InformedConsent.aspx?culture=en-US&custid=1332">accept the risk</a> of contracting COVID-19. And <a href="https://uonews.uoregon.edu/elizabeth-tippett-school-law">my law students</a> taking the bar exam <a href="http://www.osbar.org/_docs/admissions/COVID/COVID-19_Code_of_ConductDeclaration.pdf">have to give up</a> their right to sue – before they’re allowed to file lawsuits.</p>
<p>This <a href="https://www.reuters.com/article/us-health-coronavirus-disclaimers-busine-idUSKBN238298">seems</a> to be happening anywhere there’s prolonged time indoors or close personal contact. Want a haircut? <a href="https://waiver.smartwaiver.com/w/5ec0a1fa4eeac/web/">Sign a waiver</a>. Summer camp? <a href="https://nilanjohnson.com/waivers-and-releases-how-sports-clubs-summer-camps-and-daycares-should-prepare-to-reopen/">Waiver</a>. Church? <a href="https://www.brotherhoodmutual.com/resources/safety-library/risk-management-articles/disasters-emergencies-and-health/general-health-and-injury-prevention/coronavirus-social-distancing">They’re being considered</a>. Even President Donald Trump is requiring people attending his rallies to <a href="https://events.donaldjtrump.com/events/tulsa-oklahoma-rally-june-19?utm_medium=web&utm_source=djt_web&utm_content=redbar">agree to</a> “assume all risks related to exposure to COVID-19.”</p>
<p>Maria Trysla, CEO of online waiver company <a href="https://www.smartwaiver.com/">Smartwaiver</a>, told me her company starting seeing requests for COVID-19 waivers in early May. And they were coming from industries that aren’t in the habit of using waivers, like nail salons, day spas and even some restaurants.</p>
<p>Should you think twice before signing one of these waivers? Absolutely – though you’re unlikely to have much choice. These waivers tend to be presented on a take-it-or-leave it basis, which raises questions about how well they will hold up in court. </p>
<p>But they also raise the question of who is best able to manage the health risks associated with COVID-19 <a href="https://www.nytimes.com/2020/04/10/magazine/coronavirus-economy-debate.html">as the economy reopens</a>. The legal risk shouldn’t just be shifted over to customers. Instead, it should be a shared responsibility.</p>
<h2>The law of waivers</h2>
<p>Waivers are unusual legal creatures because they sit at the intersection of two different areas of law – torts and contracts. </p>
<p>Tort law is the law of negligence and defines what we owe to each other in everyday life. Texting while driving, for example, is considered grossly negligent. </p>
<p>Likewise, businesses are considered negligent when they <a href="https://theconversation.com/why-offering-businesses-immunity-from-coronavirus-liability-is-a-bad-idea-137562">expose their customers</a> to additional risk – like <a href="https://heinonline.org/HOL/LandingPage?handle=hein.journals/uflr18&div=39&id=&page=">leaving a banana peel</a> on the floor of a supermarket or <a href="https://heinonline.org/HOL/LandingPage?handle=hein.journals/lyclr24&div=10&id=&page=">serving</a> <a href="https://doi.org/10.1016/S0010-8804(02)80018-0">boiling hot coffee</a>. </p>
<p>Conversely, taking reasonable precautions to protect customers from hazards like the coronavirus – such as social distancing measures – would tend to protect businesses from tort liability. That may be is why law firms are <a href="https://www.natlawreview.com/article/legal-considerations-reopening-business-time-coronavirus">recommending health precautions</a>, rather than waivers, as a first line of defense.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/341360/original/file-20200611-80750-1r96e3k.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/341360/original/file-20200611-80750-1r96e3k.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/341360/original/file-20200611-80750-1r96e3k.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=556&fit=crop&dpr=1 600w, https://images.theconversation.com/files/341360/original/file-20200611-80750-1r96e3k.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=556&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/341360/original/file-20200611-80750-1r96e3k.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=556&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/341360/original/file-20200611-80750-1r96e3k.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=699&fit=crop&dpr=1 754w, https://images.theconversation.com/files/341360/original/file-20200611-80750-1r96e3k.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=699&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/341360/original/file-20200611-80750-1r96e3k.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=699&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The author was asked to assume the risk of COVID-19 infection before taking her child to the dentist.</span>
<span class="attribution"><span class="source">Elizabeth Tippett</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Contract law, on the other hand, is about a compact between two or more people in which you agree to some form of bargained exchange.</p>
<p>A waiver is a contract that puts tort law out of reach. In a typical waiver, you agree that you will not sue another person or business for negligent behavior or acknowledge that certain activities are inherently dangerous and you “assume the risk” of injury or death. These sort of waivers may be familiar if you’ve ever gone skiing or taken your kids to a trampoline park.</p>
<p>Waivers are a matter of state law, which vary widely, and there is no single federal law governing them. <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3367971">Some states</a> approach waivers with a “freedom of contract” stance, on the notion that people should have the freedom to agree to whatever they like. </p>
<p>But there are limits on what companies can waive away. Courts <a href="https://www.bclplaw.com/en-US/insights/liability-waivers-related-to-covid-19-in-the-united-states.html">generally decline</a> to enforce waivers when the conduct was egregious, like intentional harms or cases involving <a href="https://www.latimes.com/travel/la-trw-recreation17jul17-story.html">gross negligence</a>. A court will also sometimes invalidate a waiver if it considers the agreement too one-sided or harmful to the public. For example, the Oregon Supreme Court <a href="https://scholar.google.com/scholar_case?case=12885152647520065410">invalidated</a> a waiver printed on an injured snowboarder’s lift ticket, noting the public interest in ensuring ski hills design their jumps with safety in mind.</p>
<p>In other words, signing a waiver is taking a gamble with your legal rights. You might be able to wiggle out of it later, but you might be stuck with it. </p>
<p>Either way, businesses may be hoping that a waiver will deter customers from even trying to sue if they get sick. And if businesses think they are legally bulletproof, they may take fewer health precautions.</p>
<h2>A problem of shared risk</h2>
<p>A waiver is like a contractual hot potato – you’re passing a legal risk to someone else without really addressing the underlying danger. However, a contractual approach to safety hazards can fairly allocate legal risks with the goal of making everyone safer.</p>
<p>American jurist Guido Calabresi argued that legal risks should be borne by the party <a href="https://www.jstor.org/stable/pdf/795220.pdf">who could avoid them at least cost</a> – what he called the “cheapest cost avoider.” Some responsibility to manage infection fairly belongs with the customer, who can most easily prevent the spread of coronavirus to workers and others by staying home if they have symptoms or wearing a mask if they do not. And indeed, some of the waiver forms I reviewed contained reasonable language like this. </p>
<p>Other risks are beyond the customer’s control, such as a store’s sanitation practices or social distancing measures. The risks associated with adopting these types of health precautions <a href="https://theconversation.com/why-offering-businesses-immunity-from-coronavirus-liability-is-a-bad-idea-137562">should remain</a> with the business.</p>
<p>So “assume the risk” language in a contract might be fair if the business also promises to adopt its own reasonable measures. A naked waiver that simply passes the buck to the customer is not.</p>
<p>It’s no secret that businesses consider the legal risks of COVID-19 unbearable and are <a href="https://www.uschamber.com/letters-congress/coalition-letter-liability-relief-legislation-response-the-pandemic">lobbying</a> for immunity legislation <a href="https://www.nytimes.com/2020/05/15/opinion/coronavirus-liability-business-safety.html">from the federal government</a>. </p>
<p>The reality is that these risks are unbearable for everyone – businesses, consumers and especially workers. And the best way for the law to help is to encourage each of us to adopt health measures that protect those around us.</p>
<p>[<em>You need to understand the coronavirus pandemic, and we can help.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=upper-coronavirus-help">Read The Conversation’s newsletter</a>.]</p><img src="https://counter.theconversation.com/content/140600/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elizabeth C. Tippett does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>You may want to think twice before giving up your right to sue if you get sick, but you probably won’t have much choice.Elizabeth C. Tippett, Associate Professor, School of Law, University of OregonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1394702020-06-01T11:09:20Z2020-06-01T11:09:20ZCoronavirus weekly: recovery efforts happening in fits and starts<figure><img src="https://images.theconversation.com/files/338103/original/file-20200528-20237-14rgi2z.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C1920%2C1238&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The world takes tentative steps to get back up and running amid the COVID-19 pandemic, but our post-pandemic world will look different than how we lived and worked before.</span> <span class="attribution"><span class="source">(Pixabay)</span></span></figcaption></figure><p>The world is moving slowly and carefully to reopen businesses, get people back to work and jump-start moribund economies amid the COVID-19 pandemic.</p>
<p>Some initial attempts have been characterized by stops and starts as new clusters of the disease emerge. In Toronto, Canada, young people recently gathered en masse in <a href="https://theconversation.com/heres-why-youre-craving-the-outdoors-so-much-during-the-coronavirus-lockdown-136375">a city park</a>, fuelling outrage and sparking fears of <a href="https://toronto.ctvnews.ca/ontario-reveals-potential-cause-for-concerning-spike-in-covid-19-cases-1.4953710">more sudden and unexpected spikes in COVID-19 cases</a>.</p>
<p>In this week’s roundup of coronavirus stories from scholars across the globe, we explore how our post-pandemic lives will be different, the latest medical developments and how to keep spirits up as lockdowns endure.</p>
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<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>This is our weekly roundup of expert info about the <a href="https://theconversation.com/topics/covid-19-82431">coronavirus</a>.</em></strong>
<br><em>The Conversation, a not-for-profit group, works with a wide range of academics across its global network. Together we produce evidence-based analysis and insights. The articles are free to read – there is no paywall – and to <a href="http://theconversation.com/republishing-guidelines">republish</a>. Keep up to date with the latest research by <a href="http://theconversation.com/newsletter">reading our free newsletter</a>.</em></p>
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<h2>What the new ‘normal’ looks like</h2>
<p>As businesses reopen and employees begin to return to work, nothing is truly going back to “normal”. In fact, the post-pandemic world will require a vastly new normal until there’s a COVID-19 vaccine. And that means rethinking and reimagining how we’ve always done things.</p>
<ul>
<li><p><strong>Getting out and about.</strong> We’re all experiencing a bit of cabin fever, and some people are having trouble <a href="https://theconversation.com/coronavirus-and-cognitive-bias-the-surprising-reasons-people-cheat-at-social-distancing-137987">respecting social distancing rules</a> when they are venturing out into the world. William Petri, a professor of medicine at the University of Virginia who specializes in immunology, <a href="https://theconversation.com/a-doctor-shares-7-steps-hell-review-to-decide-when-and-where-its-safe-to-go-out-and-about-139016">outlines the seven factors he’ll assess</a> to determine when it’s safe enough to spend time away from home. He writes: “I am going to wear a mask to help prevent my giving the infection to others, avoid touching surfaces such as handrails, try not to touch my eyes or nose or mouth with my hands and wash my hands frequently.” </p></li>
<li><p><strong>Public transit.</strong> Hopping on a bus or subway during rush hour to get to work is a longtime urban ritual. But COVID-19 has likely changed how we do it so we’re no longer squeezed in like sardines. But Hussein Dia of Australia’s Swinburne University of Technology says that <a href="https://theconversation.com/coronavirus-recovery-public-transport-is-key-to-avoid-repeating-old-and-unsustainable-mistakes-138415">public transit is here to stay</a>; not everyone can walk or ride bikes to their destination, and so public transit will remain at the heart of urban mobility. Dia advocates rethinking public transit design to enable physical distancing, even though it <a href="https://www.itf-oecd.org/sites/default/files/respacing-cities-resilience-covid-19.pdf">reduces capacity</a>. </p></li>
</ul>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337837/original/file-20200527-141316-9jq30v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337837/original/file-20200527-141316-9jq30v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337837/original/file-20200527-141316-9jq30v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337837/original/file-20200527-141316-9jq30v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337837/original/file-20200527-141316-9jq30v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337837/original/file-20200527-141316-9jq30v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337837/original/file-20200527-141316-9jq30v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Squashed commuting is over until there’s a COVID-19 vaccine.</span>
<span class="attribution"><span class="source">(Victor Rodriguez/Unsplash)</span></span>
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<ul>
<li><p><strong>Air travel.</strong> The same goes for air travel, write Kacey Ernst and Paloma Beamer, epidemiologist and exposure scientist, respectively. <a href="https://theconversation.com/should-you-fly-yet-an-epidemiologist-and-an-exposure-scientist-walk-you-through-the-decision-process-138782">They have some tips for air travel</a> — and masks are, once again, a central recommendation, along with hand sanitizer.</p></li>
<li><p><strong>Doing business differently.</strong> For businesses opening their doors to customers once again, it’s a brave new world — one that will require them to take into account the fears and anxieties their employees and customers are feeling right now. According to M. Tina Dacin and Laura Reese, organizational behaviour experts at Queen’s University in Canada, <a href="https://theconversation.com/coronavirus-recovery-small-businesses-must-focus-on-easing-employee-customer-fears-138183">businesses will have to win the hearts and minds of their customers and employees</a> like never before. </p></li>
<li><p><strong>African trade.</strong> African countries may benefit from this new normal. Faizel Ismail, director of the Nelson Mandela School of Public Governance at the University of Cape Town, writes that pandemic could be an opportunity to advance free trade via the African Continental Free Trade Area in <a href="https://theconversation.com/how-a-post-covid-19-revival-could-kickstart-africas-free-trade-area-138223">a more developmental, inclusive and mutually beneficial way</a> for African countries.</p></li>
<li><p><strong>Tourism.</strong> Could a four-day work week help the struggling tourism industry post-pandemic? Jarrod Haar of Auckland University of Technology <a href="https://theconversation.com/a-four-day-working-week-could-be-the-shot-in-the-arm-post-coronavirus-tourism-needs-139388">makes the case</a> after New Zealand Prime Minister Jacinda Ardern floated the idea of shortening the traditional work week following COVID-19. “Healthier, happier and more productive workers helping other businesses stay viable? That sounds like a win-win for all,” he writes.</p></li>
<li><p><strong>What about the animals?</strong> Kendra Coulter, an animal ethics expert at Canada’s Brock University, <a href="https://theconversation.com/coronavirus-shows-we-must-get-serious-about-the-well-being-of-animals-138872">makes a passionate case to promote the well-being of animals</a> post-pandemic, arguing that COVID-19 has illuminated how terribly we treat them. She points to a coronavirus outbreak among low-income workers at a Canadian meat-packing plant, writing “that contemporary slaughterhouses have proven to be dangerous for workers in addition to being fatal horror shows for animals”. </p></li>
</ul>
<h2>Looking into treatments, cures and symptoms</h2>
<p>And speaking of animals, llamas — yes, llamas — are among the bright spots in efforts to find a cure for COVID-19. </p>
<ul>
<li><strong>Llamas to the rescue?</strong> What are known as <a href="https://theconversation.com/coronavirus-why-were-using-llamas-to-help-fight-the-pandemic-139070">nanobodies produced by the llama immune system can neutralize the virus that causes COVID-19</a>, writes Gary Stephens, a professor of pharmacology at the University of Reading in the UK. He adds that the llamas don’t have to be infected to help scientists learn more, and their nanobodies might also be used to develop much-needed, efficient and rapid <a href="https://theconversation.com/coronavirus-how-accurate-are-coronavirus-tests-135972">diagnostic tests</a>.</li>
</ul>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/338092/original/file-20200527-20223-149op2x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/338092/original/file-20200527-20223-149op2x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/338092/original/file-20200527-20223-149op2x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/338092/original/file-20200527-20223-149op2x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/338092/original/file-20200527-20223-149op2x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/338092/original/file-20200527-20223-149op2x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/338092/original/file-20200527-20223-149op2x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/338092/original/file-20200527-20223-149op2x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Llama nanobodies were found to neutralize the virus.</span>
<span class="attribution"><span class="source">(Piqsels)</span></span>
</figcaption>
</figure>
<ul>
<li><p><strong>What’s the latest with tests?</strong> Shayan Sharif and Byram W. Bridle of the University of Guelph in Canada, meanwhile, <a href="https://theconversation.com/can-antibody-tests-tell-us-who-is-immune-to-covid-19-138240">explain the pitfalls and promises when it comes to antibody tests</a>. According to the immunology experts: “Can we conceivably use antibody testing as a measure of immunity? The answer is maybe!”</p></li>
<li><p><strong>A US state is getting it right.</strong> Since South Carolina’s first COVID-19 case surfaced, trained case investigators have traced the contacts of every person who tested positive. Jenny Meredith, a pathology professor at the University of South Carolina School of Medicine, <a href="https://theconversation.com/how-coronavirus-contact-tracing-works-in-a-state-dr-fauci-praised-as-a-model-to-follow-138757">outlines what else the state got right,</a> noting that contact tracing is critical to reopening the economy without triggering a spike in coronavirus cases and overwhelming health-care systems.</p></li>
</ul>
<h2>Keeping spirits up</h2>
<p>We’re all fed up, anxious and occasionally depressed by the COVID-19 shutdowns as we take tentative, cautious steps towards the new normal. Thankfully our global network has offered up some advice on how to tackle the impact on our mental health and well-being.</p>
<ul>
<li><p><strong>Therapy.</strong> Nicholas Joyce, a psychologist at the University of South Florida, <a href="https://theconversation.com/online-therapy-having-its-moment-bringing-insights-on-how-to-expand-mental-health-services-going-forward-136374">points out that online therapy is having its moment in the sun</a> and helping those struggling with mental health issues during the pandemic. He argues that COVID-19 has made clear that telehealth is the way of the future.</p></li>
<li><p><strong>Robust mental health.</strong> Simon Rosenbaum and Jill Newby of Australia’s UNSW <a href="https://theconversation.com/what-are-the-characteristics-of-strong-mental-health-139032">outline the characteristics of strong mental health</a>, and offer up some tips to keep the COVID-19 blues at bay. </p></li>
<li><p><strong>Social enterprise.</strong> Anyone who’s ever been lucky enough to spend time in the Canadian province of Newfoundland and Labrador knows the place itself can serve as a balm to frayed nerves. Natalie Slawinski of Memorial University and Wendy K. Smith of the University of Delaware <a href="https://theconversation.com/fogo-island-shows-how-social-enterprises-can-help-rebuild-communities-post-coronavirus-138182">explain how a social enterprise saved the remote fishing outpost of Fogo Island</a> following the collapse of the cod industry — and they can help local communities around the world recover from the COVID-19 pandemic.</p></li>
</ul>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/338101/original/file-20200528-20241-1hsdici.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/338101/original/file-20200528-20241-1hsdici.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/338101/original/file-20200528-20241-1hsdici.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/338101/original/file-20200528-20241-1hsdici.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/338101/original/file-20200528-20241-1hsdici.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=565&fit=crop&dpr=1 754w, https://images.theconversation.com/files/338101/original/file-20200528-20241-1hsdici.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=565&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/338101/original/file-20200528-20241-1hsdici.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=565&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A social enterprise saved Fogo Island, and could do the same for communities.</span>
<span class="attribution"><span class="source">(Alex Fradkin, courtesy of Shorefast/Fogo Island Inn)</span></span>
</figcaption>
</figure>
<hr>
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<p><em>Get the latest news and advice on <a href="https://theconversation.com/uk/covid-19">COVID-19</a>, direct from the experts in your inbox. Join hundreds of thousands who trust experts by <strong><a href="https://theconversation.com/newsletter">subscribing to our newsletter</a></strong>.</em></p><img src="https://counter.theconversation.com/content/139470/count.gif" alt="The Conversation" width="1" height="1" />
Our experts look at recovery efforts, how different the post-pandemic world will be, the hunt for a cure for COVID-19, and why we need to mind our mental health.Lee-Anne Goodman, Politics Editor, The Conversation CanadaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1381832020-05-27T16:41:32Z2020-05-27T16:41:32ZCoronavirus recovery: Small businesses must focus on easing employee, customer fears<figure><img src="https://images.theconversation.com/files/337664/original/file-20200526-106862-19osnmy.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3000%2C1854&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A boutique owner in Montréal arranges clothes at her store on May 24, 2020 as she prepares to reopen amid the COVID-19 pandemic.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Graham Hughes</span></span></figcaption></figure><p>A small business has been <a href="https://www.cbc.ca/news/business/covid-surcharge-retail-1.5580307">given the green light to reopen amid the COVID-19 pandemic</a>. What does it need to consider for employees and customers? </p>
<p>Small business owners are reorganizing physical space to account for continued distancing requirements and rethinking supply chains to deliver products and services in new ways to meet changing demand patterns. </p>
<p>But they must not forget the hearts and minds of employees and customers.</p>
<p>That doesn’t mean replacing a focus on the bottom line, but it helps address the need for a new set of expectations and ways of communicating in terms of product or service offerings, delivery methods and real-time feedback. </p>
<p>Based on our expertise in organizational behaviour and past research we’ve conducted, we provide a set of recommendations to help small businesses thrive in our new COVID-19 economy by looking after the hearts and minds of the people most important to businesses — employees and customers. </p>
<h2>Fear, anxiety</h2>
<p>One of the biggest outcomes of living amid the COVID pandemic is the fear, anger, sadness and vulnerability many people are feeling. Even very loyal customers may have suddenly short fuses when a favourite product or service is delayed. </p>
<p>Both old and new customers may feel hesitant to enter shops or restaurants, unsure of how to engage with employees safely and afraid of unknowingly getting infected or infecting others. </p>
<p>Employees, although likely relieved to be able to earn a pay cheque, may have similar fears, and wonder how to control potentially unsafe situations or customers who aren’t adhering to social distancing protocols. </p>
<p>Overall, engaging the hearts and mind of both employees and customers means recognizing that they’re probably feeling emotions differently than they were before COVID-19. In particular, they may experience more ambivalence — a mix of emotions that can feel uncomfortable or even alien — as they grapple with discovering, experimenting and understanding what a “new normal” means.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&rect=332%2C691%2C5299%2C3323&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=403&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=403&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=403&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=506&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=506&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=506&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Owner Rosanna Petan wears a face shield and Jack Willis wears a face mask as she cuts his hair at Frank’s Barbershop, in Vancouver, on May 19, 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span>
</figcaption>
</figure>
<p><a href="https://doi.org/10.5465/annals.2014.0066">Research</a> shows this kind of emotional complexity can lead to a host of outcomes, including vacillation, disengagement and even paralysis — at least partly explaining why employees and customers may seem like deer in headlights during the first days of a business reopening. </p>
<p>Yet <a href="https://doi.org/10.1016/j.jesp.2012.12.017">our previous research</a> shows that ambivalence can actually be helpful, increasing people’s problem-solving abilities by opening their thinking to alternative perspectives. </p>
<h2>Redirecting emotions</h2>
<p>That means rather than avoiding ambivalence because it feels uncomfortable, small businesses must help their employees redirect these feelings into brainstorming creative solutions for engaging customers, updating websites and soliciting and incorporating customer feedback. </p>
<p>Doing so will have the added benefit of helping employees and customers feel more in control over the situation — a basic human need that has been drastically reduced during the pandemic.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=435&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=435&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=435&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=547&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=547&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=547&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Grounds crew do maintenance as they prepare to open Piper’s Heath Golf Club during the COVID-19 pandemic in Milton, Ont., on May 13, 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette</span></span>
</figcaption>
</figure>
<p>Coupled with emotional complexity is the loss of beloved everyday rituals, from shaking hands to being able to stand close to help a customer decide on a haircut, new clothes or specific menu items.</p>
<p>As businesses reopen, addressing this loss of tradition and predictability in employees’ and customers’ minds will be crucial. </p>
<p><a href="https://doi.org/10.5465/amj.2010.57318388">Our research</a> on
the role of rituals in institutional maintenance shows that common rituals bind people together, anchoring our sense of identity and structuring our lives in comfortable and predictable ways. </p>
<p>In short, rituals create the sense of normalcy that is now lost. </p>
<p>But to form new rituals and traditions, businesses must first re-establish trust. When trust is fragile and old rituals must be abandoned to make way for new practices, business leaders need to consider multiple approaches in how to work and interact with employees and customers. </p>
<h2>Start a dialogue</h2>
<p>The first approach is to engage in dialogue.</p>
<p>Reopening costs do not solely pertain to sanitizing workplaces and providing personal protection equipment, but also to the amount of time it takes to discuss and address concerns. </p>
<p>Important questions to employees and customers include: </p>
<ul>
<li><p>What are your concerns about being here? What can we do to make things safer? </p></li>
<li><p>What do I need to know about you that could help me work with and serve you better? </p></li>
</ul>
<p>Companies should use this feedback to create new rituals and workplace norms together with employees and customers. </p>
<p>Customization, in fact, will be increasingly important as both employees and customers have unique needs and circumstances. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&rect=0%2C89%2C3988%2C2119&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=394&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=394&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=394&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=495&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=495&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=495&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Two women have drinks on the patio of a restaurant in Vancouver, on May 19, 2020. British Columbia has begun reopening its economy.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span>
</figcaption>
</figure>
<p>According to local small business owner Lisa Arbo of Salon 296 in Kingston, Ont.: “A large part of success going forward will be about being sensitive to everyone’s reality.” This type of empathetic co-creation is likely to reduce uncertainty and give everyone a healthier sense of emotional and physical comfort and control. </p>
<h2>Manage perceptions</h2>
<p>The second approach is to manage perceptions. Small business owners are <a href="https://doi.org/10.5465/annals.2016.0122">the custodians</a> of the trusted relationships between their companies, employees and customers.</p>
<p>Even as business owners adapt to this new, emotionally complex and less predictable world, their employees and customers are looking for them to communicate clearly, succinctly and often about what is both possible and not possible, and what the new expectations are at all levels of the social contract. That includes everything from physical distancing rules to standards for customer satisfaction. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=421&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=421&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=421&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=529&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=529&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=529&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">People wait in a line for the cashiers, separated by their carts and a corral made of tape to allow for physical distancing, at a garden centre in Ottawa on May 23, 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span>
</figcaption>
</figure>
<p>By recognizing and finding ways to incorporate employees’ and customers’ emotional complexity and sense of loss for beloved traditions, small businesses can actually make this challenging time an unexpected opportunity to thrive. </p>
<p>Uncertainty, change and customization are key elements of the new business reality and embracing them, while difficult, will yield success. Businesses that excel will be the ones that effectively learn to engage the hearts and minds of their employees and customers.</p><img src="https://counter.theconversation.com/content/138183/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>M. Tina Dacin receives funding from the Social Sciences Humanities and Research Council of Canada. </span></em></p><p class="fine-print"><em><span>Laura Rees does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As small businesses reopen, they’ll need to engage the hearts and minds of both employees and customers by recognizing that they feel emotions differently than they did before COVID-19.M. Tina Dacin, Stephen J.R. Smith Chaired Professor of Strategy & Organizational Behavior, Queen's University, OntarioLaura Rees, Assistant Professor of Organizational Behaviour, Queen's University, OntarioLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1389112020-05-26T12:19:21Z2020-05-26T12:19:21ZThe coronavirus pandemic moved life online – a surge in website defacing followed<figure><img src="https://images.theconversation.com/files/337085/original/file-20200522-124860-1ui5x3h.jpg?ixlib=rb-1.1.0&rect=0%2C8%2C5991%2C3979&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Website defacing can shut down businesses that have moved online during the coronavirus pandemic.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/upset-asian-business-woman-with-computer-screen-royalty-free-image/1222373309?adppopup=true">Siriporn Kaenseeya/EyeEm via Getty Images</a></span></figcaption></figure><p>One consequence of the public’s compliance with social distancing and quarantines during the COVID-19 pandemic is <a href="https://www.policeforum.org/covidmay12">a sharp decline in most types of crime</a>. It looks like people staying home made communities less conducive to crime.</p>
<p>Unfortunately, the news isn’t as good as those numbers alone suggest. Other settings are seeing an increase in crime following the stay-at-home orders. One is the household, where domestic violence is <a href="https://fivethirtyeight.com/features/what-we-know-about-crises-and-domestic-violence-and-what-that-could-mean-for-covid-19/">likely to have increased</a> in the past two months. </p>
<p>As <a href="https://ebcs.gsu.edu/">researchers who study cybercrime</a>, we’re finding that criminal activity seems to be <a href="https://www.zdnet.com/article/fbi-says-cybercrime-reports-quadrupled-during-covid-19-pandemic/">on the rise in the online world</a>, as well. At the same time, many people are relying more heavily than before on online services for work, entertainment and shopping. This makes them <a href="http://www.unicri.it/news/article/covid19_cyber_crime">more likely to become the targets</a> of different types of online crimes. And the websites and online platforms that these internet users access become more attractive targets to motivated hackers who aim to take them over and deface them. </p>
<h2>Wave of website defacing</h2>
<p>Website defacement is the online equivalent of graffiti vandalism. It occurs when a hacker infiltrates a server on which a website is hosted and changes the content of the website with images and text of their own choosing.</p>
<p>Unlike more sophisticated forms of hacking, the act of website defacement does not require hackers to have highly sophisticated skills. In fact, several hacker typologies suggest that this form of online crime can be a <a href="http://dx.doi.org/10.1016/j.diin.2015.07.002">stepping stone to involvement in more sophisticated hacking</a>, as well as a way to gain a reputation in the hacking community. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/336428/original/file-20200520-152311-bz5xbm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/336428/original/file-20200520-152311-bz5xbm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=249&fit=crop&dpr=1 600w, https://images.theconversation.com/files/336428/original/file-20200520-152311-bz5xbm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=249&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/336428/original/file-20200520-152311-bz5xbm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=249&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/336428/original/file-20200520-152311-bz5xbm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=313&fit=crop&dpr=1 754w, https://images.theconversation.com/files/336428/original/file-20200520-152311-bz5xbm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=313&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/336428/original/file-20200520-152311-bz5xbm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=313&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A website of a U.K.-based canoe and kayak club was recently defaced.</span>
<span class="attribution"><span class="source">sreen grab by David Maimon</span></span>
</figcaption>
</figure>
<p>The harm suffered by victims of this online crime varies from loss of trust in the owner of the website to loss of revenue. When business websites are taken down by hackers, they can’t process transactions. During the coronavirus pandemic, many merchants have been forced to shift from face-to-face trade to e-commerce, which means it’s likely that <a href="https://www.techradar.com/news/the-covid-19-crisis-is-resulting-in-a-growing-wave-of-small-business-cybercrime">more businesses will become victims</a> of cybercrime. </p>
<p>Findings from a recent analysis we conducted based on information about website defacement activities reported on the hacker information site <a href="http://www.zone-h.org">Zone-h</a>, suggest that the average daily number of website defacement attacks reported in April 2020 is 50% higher than the average daily number of attacks reported in April 2019. Moreover, the volume of website defacement attacks reported by mid May 2020, has already surpassed the volume of attacks reported in May 2019 for the entire month. </p>
<p>This steady increase in the number of daily website defacement attacks started in late March 2020, while January and February stayed steady. This leads us to believe that the pervasive isolation imposed by governments around the globe has given hackers more time to spend online, which became the driving force behind this trend. </p>
<p><iframe id="V5GSj" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/V5GSj/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Smaller sites in the crosshairs</h2>
<p>Our investigation of the types of websites that are being targeted by hackers reveals that large corporations and government entities are less likely to be the victims. The average daily number of sophisticated defacements against government agency and large private business websites have increased from 17.75 attacks per day in February to 21.6 attacks per day in April.</p>
<p>However, the frequency of those attacks is substantially lower than the overall average daily number of website defacements reported by hackers during that period. It appears that websites of small businesses, social clubs and private individuals are being disproportionately targeted by hackers. </p>
<p>Website defacers prefer to attack extremely vulnerable websites because many of them are inexperienced hackers, often referred to as script kiddies. They lack the skills required to attack high-profile targets, but are motivated to gain status among their online peers.</p>
<p>Findings from our analysis suggest that the number of newbie hackers who experiment with website defacement has grown rapidly during the COVID-19 crisis. The average number of reports of defacements by first-time hackers in February was 3.41 per day. In April the number was 6.31 per day, a 77% increase in the number of first-time hackers. </p>
<p>With more new hackers attempting to establish a reputation by attacking vulnerable websites, it is imperative that small business owners and individuals <a href="https://www.techprevue.com/protect-your-website-from-hackers/">protect their websites from attacks</a>. Protection strategies should include keeping the software used to maintain websites up to date, using strong passwords to access the servers that host the websites, preventing website users from uploading files, allowing users to connect to websites via the secure internet protocol (HTTPS) and using website security tools. Fortunately, visitors to defaced websites are generally not at risk.</p>
<p>[<em>Get our best science, health and technology stories.</em> <a href="https://theconversation.com/us/newsletters/science-editors-picks-71/??utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=science-best">Sign up for The Conversation’s science newsletter</a>.]</p><img src="https://counter.theconversation.com/content/138911/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Maimon receives funding from the National Science Foundation and the Department of Homeland Security. </span></em></p><p class="fine-print"><em><span>Christian Jordan Howell does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Vulnerable websites are popping up as organizations move online during the coronavirus pandemic – and hackers have more time at home alone. The result is more websites falling victim to defacement.David Maimon, Associate Professor of Criminal Justice and Criminology, Georgia State UniversityChristian Jordan Howell, Doctoral candidate in Criminology, University of South FloridaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1372342020-04-30T12:13:28Z2020-04-30T12:13:28ZCoronavirus: Why is it so hard to aid small businesses hurt by a disaster?<figure><img src="https://images.theconversation.com/files/331488/original/file-20200429-51480-1mfmxi1.jpg?ixlib=rb-1.1.0&rect=126%2C126%2C5912%2C3884&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Eric Wang of Burmese Restaurant Thamee in Washington, D.C., was among the millions of small business owners hoping to get SBA aid.</span> <span class="attribution"><span class="source">Eric Baradat/AFP via Getty Images</span></span></figcaption></figure><p>The U.S. government <a href="https://www.washingtonpost.com/business/2020/04/22/small-business-loan-faq/">has committed hundreds of billions of dollars</a> to help small businesses weather the coronavirus pandemic. But early reports suggest larger companies are gobbling up much of the aid, while many of the neediest ones – particularly those with only a few dozen employees – <a href="https://www.wsj.com/articles/sba-under-fire-for-failing-to-get-aid-to-struggling-small-businesses-11586343600">aren’t benefiting</a>.</p>
<p>For example, large, generally profitable companies like <a href="https://www.cnbc.com/2020/04/27/coronavirus-latest-updates.html">Shake Shack</a>, <a href="https://www.cnbc.com/2020/04/25/potbelly-to-return-10-million-ppp-loan-after-outrage.html">Potbelly</a> and even the <a href="https://www.washingtonpost.com/business/on-small-business/the-lakers-got-federal-aid-and-your-corner-shop-didnt/2020/04/28/52d8655e-8950-11ea-80df-d24b35a568ae_story.html">Los Angeles Lakers</a>, with access to other lines of credit, have received millions of dollars in loans, even as <a href="https://www.theguardian.com/world/2020/apr/26/coronavirus-west-coast-small-businesses">mom-and-pop stores</a> across the U.S. say they are still <a href="https://www.npr.org/transcripts/846514529">waiting to hear back</a> about their applications. </p>
<p>Very small businesses, particularly those operating on small profit margins, are especially vulnerable, since they may not have the cash reserves to weather periods of economic uncertainty and typically have fewer ways to access financing. A recent poll by the U.S. Chamber of Commerce found that <a href="https://www.uschamber.com/series/above-the-fold/new-poll-says-1-4-small-businesses-brink-of-permanent-closure">one in four U.S. businesses</a> is two months away from permanently shutting down.</p>
<p>My research on <a href="https://doi.org/10.5465/AMBPP.2019.11188abstract">efforts to help businesses recover</a> from hurricanes and other disasters shows why smaller organizations <a href="http://oaktrust.library.tamu.edu/handle/1969.1/187915">have long struggled to get aid</a> after a crisis. </p>
<h2>Obstacles to aid</h2>
<p>Hurricane Ike, at the time of its impact in 2008, was the <a href="https://www.hcfcd.org/Additional-Resources/Flooding-and-Floodplains/Storm-Center/Hurricane-Ike-2008">third-costliest</a> storm in the nation’s history. </p>
<p>It caused approximately <a href="https://www.nhc.noaa.gov/news/UpdatedCostliest.pdf">US$30 billion</a> in damages and devastated thousands of businesses in southeastern Texas. My colleagues and I focused our study in Galveston County, Texas, where Ike made its initial landfall and more than <a href="https://www.fema.gov/pdf/hazard/hurricane/2008/ike/impact_report.pdf">3,800 businesses were interrupted and 53,000 employees were put out of work</a>.</p>
<p>The <a href="https://theconversation.com/what-is-the-sba-an-unheralded-agency-faces-the-unprecedented-task-of-saving-americas-small-businesses-136106">Small Business Administration</a> has a <a href="https://www.sba.gov/funding-programs/disaster-assistance">designated disaster relief program</a> intended to help small companies recover through low-interest loans. Despite the devastation, we found that most small businesses in Galveston that applied for federal assistance were unable to get aid. In fact, the approval rate for low-interest disaster loans <a href="https://velazquez.house.gov/sites/velazquez.house.gov/files/images/SBASandyReport052013.pdf">was only around 22%</a>. </p>
<p>The trouble is, even though this is intended as aid, it’s still a loan – and the SBA needs to make sure borrowers will pay it back. One of the main ways any lender determines whether a borrower will do so is through its credit history, which many very <a href="https://www.federalreserve.gov/publications/files/sbfreport2017.pdf">small businesses lack</a>.</p>
<p>As you might expect, we found that the most common reasons the SBA denied loans were unsatisfactory credit and lack of repayment ability.</p>
<p>Older businesses, corporations and companies with more employees received the highest loan amounts after Hurricane Ike, even when controlling for damage. These types of companies were already in a much better position to survive a disaster like a hurricane – which is likely why the SBA deemed them less financially risky and worthy of a disaster loan. </p>
<p>Getting those loans made a big difference in survival rates. <a href="http://oaktrust.library.tamu.edu/handle/1969.1/187915">My research</a> found that companies that secured an SBA loan were significantly more likely to be around nine years later.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/331496/original/file-20200429-51461-1xaviwz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/331496/original/file-20200429-51461-1xaviwz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/331496/original/file-20200429-51461-1xaviwz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/331496/original/file-20200429-51461-1xaviwz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/331496/original/file-20200429-51461-1xaviwz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/331496/original/file-20200429-51461-1xaviwz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/331496/original/file-20200429-51461-1xaviwz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Then-President George W. Bush inspected a damaged residential area near Galveston, Texas, after Hurricane Ike hit in 2008.</span>
<span class="attribution"><span class="source">Jim Watson/AFP via Getty Images)</span></span>
</figcaption>
</figure>
<h2>Paperwork and fuzzy guidelines</h2>
<p>But the approval rate tells only a part of the story, since it doesn’t capture businesses who never made it through the application process.</p>
<p>Many businesses in Galveston described applying for federal funds as “difficult” and “cumbersome,” leading many to simply withdraw their applications. </p>
<p>This is again where larger businesses have an advantage because they are more likely to have the necessary documents digitized – vital when a disaster destroyed the physical copies. They also have specialized staff that are familiar with financial paperwork and know how to navigate the loan process without having to take away from the day-to-day operational needs of the business. This also helps them <a href="https://www.cnn.com/2020/04/23/business/treasury-public-companies-ppp-loans-repay/index.html">capitalize on fuzzy guidelines</a> about who is eligible. </p>
<p><a href="https://velazquez.house.gov/sites/velazquez.house.gov/files/images/SBASandyReport052013.pdf">A report to Congress</a> from the House Committee on Small Business suggests that some businesses actually refused loans after they had been approved due to lengthy delays. As one Galveston business owner told us, “by the time you get the money your small business may be broke.” Average wait times for Hurricane Ike were 11 months after landfall. </p>
<p>The city of Galveston offered local companies a <a href="https://www.galvestontx.gov/CivicAlerts.aspx?AID=986">bridge loan</a> intended to tide them over until the disaster loan came through, but my interviews indicated that though helpful, this mostly benefited businesses with an existing relationship with affiliated banks. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/331490/original/file-20200429-51480-gws06o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/331490/original/file-20200429-51480-gws06o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/331490/original/file-20200429-51480-gws06o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/331490/original/file-20200429-51480-gws06o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/331490/original/file-20200429-51480-gws06o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/331490/original/file-20200429-51480-gws06o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/331490/original/file-20200429-51480-gws06o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Big banks like Bank of America are handling most of the small business loans.</span>
<span class="attribution"><span class="source">Kena Betancur/ VIEWpress via Getty Images</span></span>
</figcaption>
</figure>
<h2>Similar themes in coronavirus aid</h2>
<p>To combat the economic impact of the coronavirus, in late March Congress passed the <a href="https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/349-billion-emergency-small-business-capital-cleared-sba-and-treasury-begin-unprecedented-public">$349 billion Paycheck Protection Program</a> in addition to replenishing the coffers of the SBA’s disaster loan fund. </p>
<p>The idea with the new program is that small businesses, especially those that have had to close during the crisis, can get very low-interest loans that turn into grants as long as they meet certain conditions, like not laying off staff. </p>
<p>After the money was drained in two weeks – and reports surfaced of larger companies getting some of the aid – Congress <a href="https://www.cnbc.com/2020/04/23/new-310-billion-in-aid-for-small-businesses-is-likely-already-used-up-banks-say.html">topped it off with $310 billion</a> and tightened its restrictions on which businesses can use it. </p>
<p>But so far, smaller companies seem to be encountering the same problems I uncovered following Hurricane Ike. </p>
<p>For example, businesses are still finding <a href="https://www.nytimes.com/2020/04/02/business/small-business-coronavirus-stimulus.html">it difficult to apply</a> for assistance. Unclear guidelines led to confusion in how the process would be rolled out and executed, <a href="https://www.politico.com/news/2020/04/27/small-business-rescue-stumbles-211986">even in the second round</a>.</p>
<p>Like after Hurricane Ike, businesses with <a href="https://www.businessinsider.com/sba-to-cap-ppp-loan-dollar-amounts-per-bank-2020-4">existing relationships with banks</a>, such as having open lines of credit, seem to be benefiting. The assistance <a href="https://www.cbsnews.com/news/paycheck-protection-program-heather-sanborn-owner-rising-tide-brewing-loan-sba/">is grounded in a loan program</a>, which favors larger businesses. This has the potential to be exacerbated by the high competition for funds and the need for businesses to apply quickly. </p>
<p>And although COVID-19 assistance is different from previous disasters in that the loans are potentially forgivable, <a href="https://www.cbsnews.com/news/paycheck-protection-program-heather-sanborn-owner-rising-tide-brewing-loan-sba/">they are still loans</a> that – if not turned into grants – must be paid back and could compound the issues businesses are already facing from a likely sharp drop in revenue.</p>
<p>The Treasury Department’s vow to audit who took out loans to ensure recipients adhere to the rules will help, as will Congress’ decision to <a href="https://thehill.com/blogs/congress-blog/politics/494355-big-banks-cannot-shut-out-small-businesses-from-paycheck">direct 10% of the new funds</a> to community banks. Local lenders have been <a href="https://www.nytimes.com/2020/04/07/business/coronavirus-ppp-small-business-aid.html">quicker to lend</a> and <a href="https://www.latimes.com/business/story/2020-04-18/small-business-loans-coronavirus-unemployment?_amp=true">motivated to help their communities</a>. </p>
<p>Unfortunately, if history is any guide, it may not be enough to ensure these small businesses are getting the help they desperately need.</p>
<p><em>The Conversation has received funds from the Paycheck Protection Program.</em></p>
<p>[<em>You need to understand the coronavirus pandemic, and we can help.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=upper-coronavirus-help">Read The Conversation’s newsletter</a>.]</p><img src="https://counter.theconversation.com/content/137234/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Maria K. Watson received funding for this research from the National Science Foundation and The Center for Risk-Based Community Resilience Planning, funded through a cooperative agreement between the U.S. National Institute of Standards and Technology and Colorado State University.
</span></em></p>About one in four businesses say they’re two months away from permanent closure, yet many of the neediest businesses are struggling to get some of the aid intended for them.Maria K. Watson, Research Assistant Professor in Urban Planning, Texas A&M UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1318172020-04-28T12:13:11Z2020-04-28T12:13:11ZCOVID-19 is a dress rehearsal for entrepreneurial approaches to climate change<figure><img src="https://images.theconversation.com/files/328148/original/file-20200415-153326-gy0vy6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Business closures and recent rain contribute to Los Angeles' recent uptick in air quality.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Virus-Outbreak-Air-Quality/bebbd9180b7749c6ad0fa33f1736a75c/3/0">AP Photo/Chris Pizzello</a></span></figcaption></figure><p>As the U.S. struggles to control the COVID-19 pandemic, some experts have suggested that we can learn something about <a href="https://medium.com/@chuck.kutscher/the-coronavirus-and-climate-change-how-were-making-the-same-mistakes-2cd01cce2295">how to address climate change</a> from this crisis.</p>
<p><a href="https://medium.com/@green_stimulus_now/a-green-stimulus-to-rebuild-our-economy-1e7030a1d9ee">Climate and social policy experts</a> are recommending green stimulus packages to restart the economy. As a <a href="https://scholar.google.com/citations?user=Z3O4-EEAAAAJ&hl=en">professor of sustainability and entrepreneurship</a>, I see COVID-19 bringing the predicted future <a href="https://www.healthaffairs.org/do/10.1377/hblog20181218.278288/full/">human health implications</a> of climate change to horrifying life. Like COVID-19, climate change could increase respiratory illness and strain infrastructure.</p>
<p>However, just as with COVID-19, entrepreneurship can offer solutions to these challenges.</p>
<h2>Searching for a solution</h2>
<p>Saving <a href="https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources">small businesses</a> is a central part of recovering from the pandemic. At the same time, entrepreneurs are innovating to preserve their business and help <a href="https://www.cnbc.com/2020/04/15/hot-spots-of-innovation-as-a-result-of-coronavirus-pandemic.html">address the challenges of COVID-19</a>.</p>
<p>The same thing is already happening with climate change. When entrepreneurs offer solutions that create simultaneous ecological and economic benefits, it is called “environmental entrepreneurship.” My research shows that such entrepreneurship happens in three ways.</p>
<p>First, successful environmental entrepreneurs tend to see themselves as <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/joms.12198">both environmentalists and businesspeople</a>. Because of this, they often recruit investors, employees and customers from a broader group than traditional startups. Some offer a hope of reducing carbon emissions through new technologies. Others are small business heroes, creating jobs and building new industries.</p>
<p>Second, environmental entrepreneurs are attuned to different signals than large firms are.</p>
<p>While they are encouraged by environmentalist beliefs, we have also found that the <a href="http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.183.4865&rep=rep1&type=pdf">importance of family</a> can predict the number of environmental entrepreneurs in a state. Our research shows that solar energy companies are more likely to form in states that value not only the environment, but also family relationships.</p>
<p>Further, while large firms tend to respond to government-driven policy and economic indicators, environmental entrepreneurs respond to more subtle signals, such as local values. In the green building industry, environmental entrepreneurs ignore economic indicators, but are encouraged by <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/smj.2187">local beliefs and activism</a>. In short, they move first, taking on risk before the evidence is in.</p>
<p>Third, environmental entrepreneurs make a difference. <a href="https://doi.org/10.5465/amj.2015.0769">We looked</a> at the effect of various policies, activism and business practices on the adoption of new technologies like green building and renewable energy. We then divided the U.S. into more politically conservative and liberal regions to see whether policies, activism or business practices mattered more under different norms.</p>
<p>We found that the only consistent factor that increased green building adoption in both types of political environments was the number of environmental entrepreneurs. These findings suggest that when a critical mass of entrepreneurship occurs, the political divide on climate change fades away, and <a href="https://pubsonline.informs.org/doi/10.1287/orsc.2014.0918">we see a rapid uptick in adoption</a> of environmentally beneficial practices.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/331066/original/file-20200428-110742-7dtn3i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/331066/original/file-20200428-110742-7dtn3i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/331066/original/file-20200428-110742-7dtn3i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/331066/original/file-20200428-110742-7dtn3i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/331066/original/file-20200428-110742-7dtn3i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/331066/original/file-20200428-110742-7dtn3i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/331066/original/file-20200428-110742-7dtn3i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Solar entrepreneurship thrives in states that value the environment and families.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Affordable-Housing-New-York/dacaf25fec16417bb585d46571cc8382/1/0">AP Photo/Mark Lennihan</a></span>
</figcaption>
</figure>
<h2>Climate conclusions</h2>
<p>A variety of <a href="https://www.project-syndicate.org/commentary/covid19-green-deal-by-sandrine-dixson-decleve-et-al-2020-03">proposals before Congress would encourage a green recovery</a> by focusing on policy to simultaneously address climate change and the recession, but these plans will likely become mired in the political debate that <a href="https://www.huffpost.com/entry/green-new-deal-democratic-debate_n_5d40fc03e4b0db8affb01462?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALJCf5SPRpxyBe5GgiLlybawJi31oXTcKQ22OcMgOQHozg17Abnv_Con27ps8xuLZ7E9VWeNIJ0aeLdzSVFcoHqruLYgJpbTRlqMhgIDP0pvd0VWyUhcUUHHrpf0y2NmdfJwwJAnZZXyT5ELx-i6OcLyUwGOASGhYSUtBfIBAxdC">entangled the Green New Deal</a>.</p>
<p>Here’s what I’d suggest. Laser-focus on the creation of new small businesses as a way to rebuild, offering consulting, technical training and tax incentives.</p>
<p>By focusing on new ventures, those on both sides of the political aisle can rebuild an economy focused on long-term environmental sustainability and economic stability.</p>
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<p class="fine-print"><em><span>Jeffrey York does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The response to COVID-19 suggests how we can leverage entrepreneurial approaches to climate change.Jeffrey York, Associate Professor of Strategy and Entrepreneurship, University of Colorado BoulderLicensed as Creative Commons – attribution, no derivatives.