By Karen Kerrigan
Next week is Small Business Week, a time to recognize the major contributions of American small businesses and the role entrepreneurship plays in job creation, economic growth and overall U.S. competitiveness.
Small businesses are economic engines, essential to our nation’s prosperity and driving American innovation forward.
According to the U.S. Small Business Administration (SBA), the United States is home to 30.7 million small businesses, employing nearly half of the private workforce. From 1993 to 2016, small businesses comprised nearly 62 percent of total new jobs, and in 2019, small businesses created approximately 1.8 million new jobs.
However, the past 13 months have been nothing short of devastating for brick-and-mortar small businesses. In June 2020, the SBA reported that since the onset of the pandemic, “small business employers bore the brunt of the job loss, with a decline of more than 17 percent.” And according to the Federal Reserve, the total percentage of small businesses with more than $100,000 in debt was 13 percent higher in 2020 than in 2019.
As innovators, small businesses found new ways to acclimate, and many turned to technology to survive the economic downturn and keep their operations running.
Amid this particularly challenging time, technology platforms provided a lifeline to help small businesses adapt and move their operations online. As in-person shopping saw a drastic decline, many pivoted to e-commerce to mitigate financial losses. Incorporating innovative technology platforms and digital tools have even enabled some small businesses to expand their footprint and reach new consumers.
Digital marketing tools have also seen a considerable rise in popularity among establishments looking to engage online and elevate their brand’s digital presence. In fact, a report conducted by PricewaterhouseCoopers (PwC) found that overall, digital advertising spending in 2020 increased by roughly 12 percent.
Together, this has helped accelerate a digital transformation nationwide, with the U.S. Census Bureau reporting that Americans spent around 32 percent more on e-commerce in 2020 than in 2019.
During 2020, new business applications were higher than in 2019. Online retail was one of the sectors where interest was the highest, and the explosion in digital commerce and new opportunities in the marketplace drove this entrepreneurial uptick.
Technology has helped small businesses navigate challenges, innovate and remain competitive. Amid COVID-19, there’s no doubt that technology has played a central role in the survival of many of our nation’s small businesses.
Technology has moved beyond the occasional tool small businesses use to market or advertise; it has become the foundation that powers growth, productivity and innovation.
Looking to the future, technology will continue to help strengthen the ecosystem for strong startup activity and small business growth. As such, policymakers must work to promote policies that protect America’s technological edge to ensure our entrepreneurs can lead U.S. economic recovery and growth, and lead the world in innovation.
Karen Kerrigan is president and CEO of the Small Business & Entrepreneurship Council.