More than a third of Hungarian firms lacked the technological know-how to overcome the Covid crisis

Small and medium-sized enterprises (SMEs) that have been negatively affected by the Covid pandemic are less open to IT projects, while those that use more IT systems are more inclined to upgrade them, according to research conducted at Corvinus University. Almost 62% of companies had more or less the technological knowledge needed to deal with the crisis. 

To understand the impact of the Covid epidemic on companies and to explore the role of digital technologies, the Corvinus University of Budapest conducted a survey of 120 small, medium and large enterprises in 2021 with the help of CIO Hungary, an organisation of IT professionals, to identify the factors that influenced the survival of companies. SMEs play a key role in most economies, driving economic growth and providing the most jobs. But during the pandemic, their operations were threatened.  

40% of the companies surveyed reported a decline or some reduction in investment and development. Almost 62% of companies had more or less the technological knowledge needed to deal with the crisis. 38% of firms had to adapt to changing customer needs. Most of the potential technological solutions were available to companies before the crisis, the challenge was to scale them up as experience grew. Two-thirds of respondents identified communication technologies as the most important development direction in the short term, but identity management and mobile IT solutions were also high on the list. Business and artificial intelligence developments are the focus of 45 and 35 percent of firms, respectively, as is advanced technology (38 percent).  

Covid has hit SMEs harder that have shied away from IT developments  

The research looked specifically at the situation of small and medium-sized enterprises (SMEs). The analysis was based on three main aspects: the negative impact of the covid on the business, the use of IT systems and the likelihood of IT projects being implemented. The findings suggest that businesses could have mitigated some of the negative effects of the Covid epidemic by using IT systems, although other factors may have been more important. There is also an effect that firms that were negatively affected by the covid pandemic are less open to IT projects, while those that use more IT systems are more inclined to upgrade them. 

The research was funded by the National Research, Development and Innovation Fund in the framework of the Slovenian-Hungarian science and technology cooperation project COVID – Impact of the pandemic on SMEs’ digital transformation initiatives. The authors of the paper are researchers at the Corvinus  University of Budapest Péter Fehér, Andrea Kő, Tibor Kovács, Dóra Őri, Ildikó  Szabó, Zoltán Szabó and Krisztián Varga.