Coronavirus is on the rise again in Maine and across the nation. Uncertainty abounds. Next week’s election will have profound consequences for all of us.

So what’s a small business to do?

Be innovative and seek help.

Ryan Wallace, director of the University of Southern Maine’s Center for Business & Economic Research, assembled a five-year forecast for Maine’s economy, and 2025 still doesn’t figure to surpass the levels achieved in 2019.

Even so, he’s optimistic. The crisis has forced businesses, households and other organizations to be innovative in order to survive.

“We should embrace (that) and come out better, more resilient on the other side, though it will take time,” he said. “I’m bullish on Maine. This is a potential turning point and opportunity for the state.”

Wallace joined Richard Arend, a professor of strategic management at USM’s business school, on an hourlong webinar Friday morning put on by the Maine Small Business Development Centers. An audience of 140 people included policy makers, town officials and representatives of economic development organizations.

Arend presented findings from a survey taken in July and August of roughly 500 small businesses across the state. More than half (54.5 percent) of those businesses had to close at least temporarily because of COVID-19, with two in three doing so by government mandate and the other third doing so voluntarily, for health or economic reasons.

Among the surprising findings was that, although a little more than half of respondents took advantage of the federal Paycheck Protection Program, doing so didn’t correlate significantly with small business owners’ expectations of their firm surviving the next year. Significant correlations between closing during the pandemic and potential failure included whether the business depended on tourism, was related to service, focused on retail or had little or no online integration.

On the positive side, Arent said he found more optimism and innovation than he expected. He urged small business owners to “use the crisis to make the improvements you have been putting off and that will help you be more competitive when the recovery comes. Push for and apply for help from your policy makers that will make it easier for you to innovate and to be more certain of the future.”

Wallace said the recession has been harder on low-wage workers (since January one in four jobs has disappeared for those making less than $27,000 annually) and women (who account for 55 percent of unemployment claims) in Maine.

His forecast model shows unemployment tapering off over the next two years from the current 8.6 percent below pre-pandemic levels to 5.4 next year and 3.2 in 2022 before settling in at 2.3 for the following two years. That’s assuming no new stimulus or infrastructure package, which could arrive sooner depending on the outcome of next week’s election.

His model also anticipates vaccine readiness at some point next year with dissemination throughout the general population by the end of 2021, he said.

Wallace pointed to exciting developments in Maine’s heritage sectors of forest products, marine industry and food economy as well as major philanthropic investments and opportunities to attract newcomers (through remote work) to a state with a declining population.

“Not that there isn’t a lot of pain in the interim, but we will get through this,” he said, “and we will be better.”


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