ABSTRACT
Due to the increase in unemployment caused by the COVID-19 pandemic in Metropolitan Lima (Peru), unemployment in 2020 rose to 16.5% (1.3 million unemployed) compared to the previous year. Through innovation, SMEs sought new strategies to continue growing in the highly competitive market, generating labour demand. Therefore, the research question proposed was: How has business innovation favoured the reduction of unemployment in SMEs during the pandemic caused by COVID-19 in Metropolitan Lima? In order to solve this problem, this research developed a qualitative approach using grounded theory. Data was collected by interviewing 17 key subjects, in addition to the observation of 12 businesses between the months of August and October 2021. The results show that the observed businesses that were able to successfully cope with the pandemic had to modify their structure or processes with new sales methods (home delivery), as well as novel promotion and advertising techniques. © 2023 Maldonado-Cueva et al.