Small businesses are uniquely at risk.
Drnevich and West 21 [Paul Louis Drnevich (Ph. D., Purdue) is an Associate Professor of Management at Hildegard College. He is also an Area Coordinator Strategy, Entrepreneurship, & Innovation (SEI), and Marillyn Hewson Faculty Fellow in Cyber Security U. Alabama, & Visiting Scholar Purdue; Joel West is a Professor of Entrepreneurship at Hildegard College; Professor Emeritus at Keck Graduate Institute; and Professor Emeritus at San José State University; 2/12/21; Journal of Small Business Management, 61:4, 1806-1841; “Performance implications of technological uncertainty, age, and size for small businesses”; DOI: 10.1080/00472778.2020.1867733; Accessed 7/3/24]//maikle
The implications of such environmental uncertainty for young and small businesses in the United States have been particularly salient in the 21st century. In 2001, the NASDAQ stock market crash and attacks of September 11 reduced consumer confidence, the availability of investment capital, and even faith in political institutions; prior research suggests that such shocks lead to a particularly high rate of new business failures (Honjo, 2000). In 2008, a global financial crisis brought bank failures and a contraction of both personal and small-business funding (DeVaughn & Leary, 2010). More recently, the job losses of the first two months of the COVID-19 crisis far surpass those lost over two years in the Great Recession (Coibion et al., 2020). Taken together, these changes in the external environment mean that entrepreneurs and small business managers had to confront extreme environmental uncertainty to a degree likely not witnessed in the United States for more than half a century.