The U.S. Chamber Technology Engagement Center (commissioned by Amazon) recently did a survey of 5,300 small business owners in rural America about the economic impact of online tools and technology on their businesses. Below are the highlights of the report…
Digital technology boosts sales and reduces costs for rural small businesses: Online tools and technology help rural small businesses expand their customer base in their own community, neighboring states, and, in some cases, outside of the country as well. Online tools boost sales for nearly 55% of rural small businesses across America. In addition, online tools reduce purchasing costs of products and materials for nearly 29% of rural small businesses.
Small businesses in rural areas are slowly adopting digital tools and technology: Nearly 20% of rural small businesses in America generate the vast majority of their revenue (at least 80%) by selling their products and services online. A slightly larger share of rural small businesses, 22%, purchased at least 80% of their goods and services online.
Rural small businesses utilize digital tools and technology for sales, marketing, and operations: About one-third of rural small businesses sell their products and services through their own websites and nearly 13% sell their products and services through third-party websites. Over 58% of rural small businesses have social media accounts and nearly 36% use online advertising services. Rural small businesses also use online tools for operational tasks such as business banking, accounting, virtual meetings and conference calls, and cloud computing.
Greater use of digital tools and technology could unlock potential in rural small businesses across the country.
Digital technology created opportunities for rural small businesses in the past three years: Digital tools and technology boosted gross sales of rural small businesses by 17.2% during the past three years, the equivalent of $69.8 billion per year. The additional gross sales contributed $38.7 billion to U.S. GDP per year and created 296,288 jobs (full-time equivalent) with $12.1 billion in wages per year. The magnitude of the economic benefits is equivalent to the size of the economy of Vermont or Wyoming.
The economic benefits of digital technologies have not been fully realized in rural areas: If rural small businesses had better adopted online tools and technology, their gross sales would have increased by an additional 18.3% in the past three years, the equivalent of $74.4 billion per year. Consequently, rural small businesses would have added another $41.3 billion to U.S. GDP per year and created an additional 316,605 jobs with $13.0 billion wages per year. These unrealized economic benefits are equivalent to 0.2% of GDP and over 5% of the number of unemployed people in the U.S. labor force.
With greater adoption of digital tools and technology, the potential economic benefits in rural areas are far reaching: If rural small businesses better adopt online tools and technology, their gross sales could increase by an additional 20.8% during the next three years, the equivalent of $84.5 billion per year. This increase in sales could contribute an additional $46.9 billion value added to U.S. GDP per year and create 360,054 jobs with $14.8 billion wages per year. By unlocking the digital potential of rural small businesses, the U.S. GDP would gain an additional 0.2% per year and reduce the number of unemployed people by nearly 6%.