Washington, DC – Helping small businesses adopt more digital tools in their operations can boost revenue, employment, and overall economic growth. That is a key finding in a new report released today by the Bipartisan Policy Center, Small Businesses Go Digital: Benefits, Trends, and Barriers of Digitalization. Digital tools—for payments, accounting, sales, inventory, and more—are strongly associated with small business performance.
The COVID-19 pandemic pushed many American small businesses to digitalize at a rapid pace. Yet many still lag in the extent to which they use digital tools to run their businesses. This is especially true of the smallest firms, or microbusinesses, which account for about nine in 10 employer firms in the United States.
“Most small business owners and entrepreneurs recognize the benefits that come with greater digitalization,” said Dane Stangler, director of strategic initiatives at BPC. “Yet they face significant barriers to adoption: awareness, access, bandwidth, and more. There are important ways that public policy can help overcome those barriers, which would boost small business productivity and economic growth.”
Takeaways from the report include:
- Digitalization is associated with growth. Small businesses using a large number of digital tools are significantly more likely to report recent revenue growth.
- More money, more digitalization. Businesses that plan to invest in digital tools in the next year are more likely to have experienced revenue growth.
- Digital competency matters. Small businesses of all sizes say digital skills related to documents, spreadsheets, online advertising, and web design, for example, are important—even essential—for their business.
Businesses using many digital tools were significantly more likely to report recent revenue growth than those that used few digital tools. Businesses that plan to invest in digital tools in the next year were also more likely to have experienced revenue growth and were more likely to say that adoption lowers costs.
Policymakers and other stakeholders can help boost small business productivity through digitalization in several ways. They can help ensure that the digital infrastructure is conducive to adoption of digital tools. And they can help ensure that small businesses have access to sufficient information about costs and benefits.
Read the full report here.
For questions or to speak with Dane Stangler, please contact Senior Media Relations Manager Kyle Fischer.