Impact of Crime on Small Businesses in the Social and Solidarity Economy Sector: A Study on Vulnerability and Resilience

Abstract

Ecuador has experienced a significant increase in organized crime, which has increasingly impacted entrepreneurs, especially in the social and solidarity economy sector. This sector, essential for the socio-economic development of the most vulnerable communities, promotes inclusion and social well-being through small businesses. However, these businesses face serious challenges due to crime and extortion, putting their viability and the livelihoods of their owners at risk.
This article examines the impact of criminality on these businesses, highlighting how these threats increase the vulnerability of entrepreneurs. It also explores the resilience strategies they have adopted to cope with these challenges.
The social and solidarity economy in Ecuador is highly relevant, managed by the entrepreneurs themselves within a framework of public policies designed to support their growth. With 29.6% entrepreneurial activity, Ecuador leads the Andean region in this area, although many of these businesses are not yet consolidated.
Despite this potential, organized crime poses a serious threat, disrupting legal markets, discouraging investment, and hindering economic development. Small and medium-sized enterprises have been particularly affected, with many forced to close due to insecurity. In 2023, the rise in criminal activity led to a significant decline in local sales, especially affecting the commercial and tourism sectors, with a forecasted reduction in income of up to 20% by early 2024.