The dual effect of COVID-19: Diverse digitalization approaches in micro- and small businesses

This study empirically examines the controversial impact of the pandemic on the digitalization of micro- and small enterprises (MSEs) in the Canton of Fribourg, Switzerland. Previous research suggests that the COVID-19 pandemic has accelerated digital transformation while also amplifying preexisting vulnerabilities among MSEs. Several MSEs benefited greatly from digitalization to survive; others faced serious obstacles because of preexisting financial and technological limitations. Our study reveals that, on the one hand, micro-enterprises exhibited greater levels of digitalization compared to their larger counterparts, mitigating the "liability of smallness" through greater flexibility and adaptability. On the other hand, financial and organizational structure constraints limited the broader digital adoption among small enterprises that prioritized short-term survival over strategic transformation. These insights underscore the need for targeted policies to address the digitalization challenges faced by MSEs, focusing on improving access to digital infrastructure and enhancing their antifragility in the face of future crises.