A new survey shows that while 82% of Irish SMEs have been negatively impacted by the Covid pandemic, the disruption it has caused has amplified opportunities for an acceleration in online and digital initiatives.
The pandemic has also started a move towards the development of more sustainable business models.
The latest global EY SME survey reveals that 54% of small and medium sized businesses surveyed plan to change business models in response to new market conditions.
The EY survey examined the effects of the Covid pandemic on more than 5,600 SMEs across 16 markets, 310 of which were in Ireland.
It said that given the significance of SMEs in Ireland - which account for 99% of active businesses and which employ around 68% of the private sector workforce - the results provide insights into the country's recovery from the pandemic.
Although many SMEs were put under significant pressure during the first 18 months of Covid, 13% said they had experienced a positive economic impact.
A further 21% said they only saw a slightly negative impact on their business.
EY noted that the varied nature of the SME sector in both industry type and lifecycle stage means the impact of the pandemic has been felt unevenly with some businesses enduring better than others.
It also said that one of the far-reaching implications of the Covid caused disruption has been the acceleration of digitisation across the sector with 36% of SMEs here "reimagining" their business processes online, and 11% planning to move to an e-commerce or online-only model.
It also said it was "interesting" to see that 60% of Irish businesses indicated that running a sustainable business is very or extremely important to them.
"With great change comes great opportunity and many SMEs are recognising the value of running a more sustainable business where their profitability can coexist with care for the environment and social commitment," EY said.
Roger Wallace, Head of EY Private, said that one of the more prevalent observations that has emerged from the pandemic has been just how sectoral the impact is overall.
"The tourism and hospitality sectors remain significantly impacted and are a core part of our economy, particularly outside of Dublin. Looking a layer deeper, businesses that invested in their digital capabilities, both from operating and sales perspectives, found the necessary changes in business and operating models more achievable," Mr Wallace said.
Mr Wallace said that permanent changes in consumer preferences cannot be guaranteed as yet, given the emergence of new variants and continuing uncertainty.
But he said it is clear that health and wellbeing as well as environmental sustainability have increased in consumer consciousness.
"SMEs that are alive to how their businesses can make a difference in areas such as these are more likely to develop strengths rather than succumb to threats in this regard," he added.