Efectos del Covid-19 en el sector emprendedor costarricense / Effects of Covid-19 in the Costa Rican entrepreneurial sector

Abstract

This study seeks to investigate the impact, responses and demands for support, in the face of the crisis caused by Covid 19, by entrepreneurs and organizations in the economic sectors, as well as the strategies considered to have the greatest impact on their business and that could consider necessary. The study took information from a survey that obtained a total of 138 responses, mainly located in the province of San José (50%), more than half (84.7%) include micro and small businesses and a (9, 3%) medium and large companies mostly located in a development stage in which the company achieves a degree of positioning in the market that guarantees its sustainability over time, the rest are located in the beginning and maturity stages mostly, they cover a wide range of sectors of activity. The largest number of participating entrepreneurs was found in the age range of 30 to 40 years (38%). Thus, it is found that the direct and indirect effects of covid 19 in the entrepreneurial sector of various sectors of the Costa Rican economy caused (55.7%) cuts in working hours as a practice in their businesses to face the crisis and a decrease in (67%) in the price of their products or services, experiencing a transformation in the management of business models that until before this date were usual. It is evident that the effects of the pandemic caused by COVID-19 had a strong impact on the Costa Rican productive sector, and the need for support from the businesspersons who have been affected is evident. Furthermore, for a country of 5.5 million inhabitants, the pandemic leaves more than 400 thousand people unemployed (16.4% + 11.1% underemployed), that is, 92 thousand more than before COVID 19. The worst hit groups are those of women and youth, leading them and the other unemployed to migrate to informality. 1,455 micro (1-5 employees), small (6-30 employees) and medium (31-100) closed. These companies have little chance of reopening, having to increase the figures of informality and in many cases, 2% of GDP in smuggling and illicit trade. The Costa Rican government must work to support new ventures that allow the insertion of new businesses in the formal sector, leading innovation, and competitive proposals to face new challenges. Access to soft loans, improvements in social security rates and differentiated fees for taxation should be part of the solutions. In addition, ensure that the minimum contributory rate of social security is modified for the payment for part-time work, so that the same companies hire personnel based on the hours worked and not for a single rate. It should be considered that Costa Rica is already part of the OCDE and that is going through a historic electoral process (26 presidential candidates), to put this problem in the sights of the candidates. The joint work between private sector, government, financial and educational institutions is a must. Costa Rica is walking at the edge of falling into an economic default and helping these initiatives could be a magic recipe for the economy.