This research seeks to contribute to the design of public policies that generate greater resilience for smaller companies, promote job creation and reduce the digital divide, among others.
The research by Patricio Valenzuela, an academic from the School of Engineering and Applied Sciences, entitled "Distance, Innovation, and Inclusive Growth During Crises: Evidence from Small Businesses,"was recently awarded a Fondecyt Regular 2025 and will analyze how small businesses in different regions of Chile responded to the crisis by adopting innovations in marketing channels, such as online sales, home delivery, and new products.
"We seek to explore the effects of geographic proximity on the adoption of digital technologies, innovation in marketing channels, and inclusive small business growth. To conduct the analysis we will use data from the "Impact of the COVID-19 pandemic on small businesses" survey, which collected data on SMEs and clients of the SERCOTEC business centers in all regions of Chile," says Valenzuela.
The academic explains that through this project, he seeks to understand the determinants of small business growth, as small businesses are vital to the economy and employment generation. "Our country has significant economic and territorial inequality, with rural areas that lag significantly in the adoption of innovations, compared to metropolitan areas. This is due to certain specific obstacles, such as deficient infrastructure, difficulties in accessing financing, lack of professional networks, limited digital transformation and informal competition. We want to contribute to the solution of these obstacles in order to promote growth, where small businesses play a crucial role in the local economy," details the expert.
Despite the relative scarcity of financial and human resources, a significant proportion of small businesses are able to adopt business strategies and digital capabilities to stay afloat and capitalize on emerging opportunities in downturns. "This is why it is crucial to assess the return on investment in technology and innovation. While there is evidence of the positive impact of innovation during crises, there is little information on the role that geographic proximity plays in the technology gap, innovation in marketing channels, and crisis management for small businesses," adds the researcher.
This research is expected to contribute to the design of public policies aimed at promoting growth, generating greater resilience of smaller companies, fostering job creation, and reducing inequality through reductions in the digital divide and the adoption of new marketing technologies.
The findings in this study suggest that governments should encourage digital transformation through public support and training programs. They also suggest that small businesses should rapidly digitize to promote innovation and business growth. Accordingly, entrepreneurs should prioritize investments, as needed, in digital technologies and skills to cope with economic crises.
On this project, the academic of the School of Engineering and Applied Sciences works with Iván Díaz and Juan Acevedo, both from the ESE Business School.
Valenzuela is also working on the projects "Unintended consequences of macroprudential regulation"; "Informal debt and mental health among small entrepreneurs"; "Corporate credit risk, bank fragility and sovereign risk"; and "Sales digitalization and inclusive growth."