A reflection on the impact of the COVID-19 pandemic on Australian businesses: Toward a taxonomy of vulnerabilities

Abstract

The extant literature paints a grim picture of the COVID-19 impact on businesses around the world. However, in neither case has there been an attempt to evaluate the disproportionate impacts of the pandemic on the operation of different business sectors. To remedy this situation, this study utilises a cluster analysis to develop a taxonomy of vulnerabilities based on the industry-specific vulnerability indicators for 83 business sectors in the economy of Australia. The proposed taxonomy groups businesses into three clusters, labelled as vulnerable to business to people (B2P), vulnerable to business networking, and vulnerable to external factors. The differing vulnerability of businesses to the recent pandemic raises a fundamental question about how best to build resilience to reduce vulnerabilities. Built on the vulnerability characteristics identified in the taxonomy, this article suggests factors that contribute to the resilience of businesses in each cluster. Further, the present paper develops a novel validation method to demonstrate the goodness of the clustering results. Business leaders and government officials might draw considerable assistance from the taxonomy of vulnerabilities presented herein to build more resilient businesses to crises.