Covid-19 has introduced new forms of economic risk not experienced by major global economies in living history – risks to production, business continuity and most crucially, supply chains. Although it may be thought that the worst of the pandemic is over, as long as the threat of new variants remains, the recovery of SMEs and the economy itself will face significant obstacles.

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Recent statistical insight by the Organization for Economic Cooperation and Development revealed that several countries, including the UK, were ill-equipped to cope with negative economic effects, which have put UK SMEs at high risk of failure and having a high probability of defaulting on outstanding loans. This was supported by evidence in a report published in June 2021 by Simply Business, which estimated that Covid-19 would cost SMEs in the UK an estimated £126.6 billion.

Alumni insight: supply chains – stopping the links from breaking

Rob Johnson, Honorary Professor; Former Director of Supply Chains, Jaguar Land Rover (Geography, 1979)

Demand and supply shocks from Covid-19 hit supply almost everywhere we look, from foodstuffs, energy, manufactured goods, raw materials, medicines and even semiconductors.

Production shutdowns and cutbacks starved supply chains over many months, and later when opening up to restore output, there were big problems in labour, sub supply, raw material, and logistics. Many sectors are still below pre-pandemic output, and since then we have also seen huge energy cost spikes and shortages as a side effect of the war in Ukraine.

What does this mean for future global value chains given the obvious need now for more resilience and reduced risk? Are we going to see the demise of ‘Just in Time’ (JIT) and rapid transit logistics in shipping, air, and road freight? In my view no, supply chains are not about to drop JIT, which brings too many important benefits in quality and manpower efficiency. However, we are going to see much more ‘built in’ real time supplier monitoring, responsiveness, and agility.

Reactivity will help ‘see’ supply issues instantly, and upstream manufacturing can focus on both rapid adaption and an agile changeover to updated build capabilities, including digitally signalling to wholly integrated supplier operations.

‘We get the supply chains we deserve’, as my old boss Shuhei Toyoda of Toyota once said to me. What he meant is we can never, ever stop looking to improve how supply chains operate.

Check out Rob in conversation with Richard Fresia-Farrelly, Chief Operating Officer, DS Group in the business school's 'In conversation with...' video.

Here at Nottingham many of our leading academics are dedicating their intellect and expertise to help identify solutions. Earlier this year a project team led by Professor Meryem Duygun, together with finance experts from the universities of Exeter, Lancaster, and UCL, tasked itself with creating a new methodology for quantifying pandemic credit risk at the SME level.

The project aimed to quantify risks to SMEs through accurate risk modelling and exposure indicators. By analysing and combining numerous datasets - both financial and non-financial - and drawing on big data, artificial intelligence and machine learning, Professor Duygun’s team produced a ground-breaking array of predictive metrics for rating pandemic and credit risk exposures.

Academic insight: Why acting like an entrepreneur can enlighten us all

Simon Mosey; Director of the Haydn Green Institute for Innovation and Entrepreneurship

Our research shows that entrepreneurship can be thought of as a way of thinking and a way of behaving - recognising opportunities, coming up with alternatives and choosing the best one.

And over the last two years, all of us have had to think and act like entrepreneurs as we have tried to adapt to ever-changing circumstances. Some people have found this easier than others and many have reached out to us for help in making sense of what they have gone through and reflecting upon when it is most useful to work in this way.

Whether you are starting a new business or trying to make decisions within an existing organisation, large or small, reflecting upon when to think like an entrepreneur can be instructive - and indeed, may be critical for business survival.

Some of our businesses at the Ingenuity Lab were forced to change tack during, shifting their focus to meet the needs of the pandemic. For example, Kazi Alam, who founded caregiver app Mita at the Lab, has spent much of the past two years supplying PPE to healthcare providers.

Our dedicated team of Entrepreneurs in Residence have been on hand to provide expert advice and support at every turn for our student entrepreneurs.

The Ingenuity Programme focuses on creating impactful business solutions for social problems, and we have seen some brilliant, innovative ideas to tackle issues that have arisen. The health and wellbeing of the elderly, who have really suffered from the social isolation of the pandemic, has been a particular focus this year.

The last two years have shown us that innovation never ends - but our budding entrepreneurs have shown it is possible to build better and build differently.

This was supported in March 2022 by a three-day SME Policy Workshop, held online and co-organised by the University of Nottingham, Bank of England, and Confederation of British Industry to disseminate the research findings. The theme of the workshop was “rebuilding business resilience in the wake of COVID-19” and it attracted more than 170 participants, including entrepreneurs, business analysts, policy makers, and researchers, from 32 countries.

Going forward, it is hoped these tools could play a useful role in enabling SMEs to access different funding channels, as well as providing timely input to the decision-making process of policymakers, lenders, and other financial institutions such as insurance companies, when it comes to funding SMEs during crises.