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59% of entrepreneurial projects in the Region maintain their activity during the coronavirus crisis, according to a study by the University of Murcia (20/05/2020)

| Demand has dropped to 50.3% and 37.6% has been forced to be temporarily closed | Regarding the key difficulties for new entrepreneurs, more than 57% think that they will not dare to take risks in the future 78.8% claim the elimination of self-employed quotas for one year and 62.3% the creation of free credit lines The Chair of Entrepreneurs of the University of Murcia has prepared the study entitled 'Situation and perspectives of entrepreneurship in the Region of Murcia in the face of the COVID-19 crisis'; carried out with the results of a survey sent to 236 companies in the Region and 4,314 in the rest of Spain and with the collaboration of the Institute of Development of the Region of Murcia and Bankia.

The responses obtained indicate that 59.3% of regional entrepreneurs maintain their activity, either operating normally (13.1%) or supported by teleworking (46.2%), a percentage slightly higher than what happens for the whole of Spain (58.4%). Maintaining activity despite the restrictions generated by the state of alarm has been possible thanks to technological means, especially videoconferencing, used by 50.8%; file sharing platforms (37.7%); and virtual internal networks (VPNs), which are applied by 17.8% of companies.

The degree of digitization has been key to face the situation caused by COVID-19 for 73% of regional entrepreneurs, which is why the Chair points to the importance of support to acquire equipment that allows increasing digitization of companies . Of those who have maintained the activity, 50.2% claim to have suffered a considerable decrease in demand; a figure higher than that of the rest of Spain, which shows a reduction in 43.9% of cases.

As a consequence there are 37.6% of initiatives that have temporarily closed in the Region of Murcia.

Only 6.9% of companies claim to have had an increase in demand. Activity drop All this context leads entrepreneurs to postpone investment or expansion plans (35.6%), cancellation of orders to suppliers (24.2%) and the abandonment of some markets (13.6%); data that, according to UMU researchers, anticipate a sharp drop in activity among entrepreneurs.

27.1% have chosen to change the business model as a way to deal with the COVID-19 crisis.

Looking for external financing (22.0%) and the modification of pre-crisis financial conditions (9.3%) are other important lines of action. Regarding employment, practically 45.4% of entrepreneurs have lost human capital, either permanently (through layoffs) or temporarily.

Reducing working hours or the number of people employed have been measures to which they have had to resort.

In this sense, while 9.3% of companies have dismissed an employee and 36.1% have launched an ERTE, 46.3% of all companies have not taken exceptional measures in the labor field. Financing and aid received The crisis generated has influenced the planned financing of regional entrepreneurial initiatives in 40.9% of cases.

The results obtained indicate that it will be key to facilitate the liquidity of the entrepreneurs, as well as to support them in the investment challenges they have to face until the end of the economic crisis situation.

A prolonged crisis situation could lead to the disappearance of many entrepreneurial initiatives, so it will be necessary to assess the implementation of measures so that new initiatives can become consolidated and maintained, depending on each case. Future expectations and aid In the Region of Murcia the degree of impact of the COVID-19 crisis in the context of entrepreneurs is very negative or negative for 78.3% of respondents (almost identical to how it is valued at the level of Spain, 78 , 7%), being valued as positive or very positive only by 9.4% of regional entrepreneurs (11.6% in Spain).

The negative impact is significantly greater in consolidated initiatives.

A positive fact, regarding the appearance of new opportunities in the market in the Region of Murcia, is that only 3.4% of the respondents answered negatively (6.1% in the whole of Spain), which it means that the remaining 96.6% see the possibility of new opportunities. The reduction of private investment and the fear of taking risks are two of the major concerns in the scenario of the coming months.

Within a year, the companies surveyed consider it likely that they will need public aid, launch new products and services, seek external financing and reduce personnel.

Against this background, the main actions required by regional entrepreneurs of Public Administrations (State, Autonomous and Local), as a priority, both to maintain initiatives and to take advantage of opportunities, are to eliminate self-employed fees and tax on economic activities during 1 year 78.8% (73% nationwide); eliminate bureaucratic obstacles 65.7% (66% at the level of Spain); launch long-term and free credit lines 62.3% (58% nationwide);reduce the social security contributions of employees 60.2% (56% nationally); and promote more aid for the creation of companies 46.2%.

(40% at the level of Spain).

Source: Universidad de Murcia

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