There is a general consensus that digitisation is symbiotic with growth. Our latest research, conducted on behalf of Intuit, confirms that businesses using a five or more digital tools are significantly more likely to report an increase in revenue. And yet, small and medium enterprises (SMEs) remain sceptical about what digital tools and technologies can offer their business.  

To better understand digitisation trends across small businesses in the United States, and how we can empower smaller businesses to capitalise on technology in their day-to-day, we polled senior decision makers in US-based businesses with fewer than 100 employees. The results were then weighted to nationally representative portions.  

We found that businesses truly do see the benefits of digital tools. 

• 71% agreed that digital tools are easier to use than paper-based equivalents; 
• 65% agreed that online tools have made it easier to share information across their business; 
• 60% agreed that online tools had allowed them to offer a higher quality of service, and; 
• 50% agreed digital tools had lowered their costs. 

Our modelling estimates that – on average – small businesses stand to gain 3.2% revenue growth for every additional digital tool they use. This confirms that small businesses stand to benefit if they integrate technology into their operations. 

And there is a real appetite for digital skills across the workforce.

Three quarters of small businesses (74%) agreed that digital competency matters – with a particular emphasis on digital skills related to documents, accounting software, ecommerce, online advertising and web design. Half of businesses (50%) with over 10 employees indicated that a shortage of digital skills would constraint their revenue, and a fifth (20%) stated that digital skills were absolutely essential to their daily operations.  

Yet SMEs still tend to be more cautious in adopting new technologies.

Almost half of respondents – 48%  –  had no plans to invest in digital tools next year. When asked why this was, the most common answer was because they didn’t feel it would make a difference to their business.  

Indeed, 39% of businesses described themselves as “conservative” when it comes to digital adoption. By comparison, when we asked this question in a US survey earlier in the year, only 9% of senior decision makers in large companies (250+ employees) identified as “conservative” towards digital tools – with over half claiming to be “early adopters”.  

It’s interesting to see how confidence levels vary relative to number of employees and the age of a company. 18% of brand-new businesses (under a year) don’t see the value of tech; but this drops to 2% for businesses over a year old. The dramatic shift perhaps speaks to the competing priorities of a start-up, and an emerging realisation over time that tech can make a business leader’s life easier.  

Similarly, having fewer employees correlates with slower adoption.  Micro-businesses with 1-4 employees were half as likely as SMEs with 50-employees to have plans to invest in new digital tools next year (42% vs 80%).  

SMEs could also make more of the tools already available to them. 

Only half of respondents (53%) said they use all their online tools to the maximum of their capabilities, and only half (53% again) said they regularly reassess what online tools they are using. This means that the other half of businesses do not capitalise on the technological capacity of their existing software – or check that they are still using the best resources for their needs. By way of explanation, one business based in Mississippi with 5-9 employees explained that “a lot of my workers are not tech savy so they find it very hard to use digital products”.  

But taking the time to learn is hard.

The manager from Mississippi is not alone. A fifth of small businesses reported difficulties in retraining staff with new skills. When we delved a little deeper, 27% of firms with 1-4 employees and 26% of firms with 5-9 employees cited time pressures as an issue.  Leaders also expressed that it was “too complicated to figure out, that “staff are unwilling to take part”, or that they “cannot find suitable training courses”. In short, there is a real opportunity for smaller businesses to lean into more advance technologies; but support is needed to enhance the necessary skillsets. 

Ultimately, there is a clear case for boosting digitisation from microenterprises to large scale corporations. For small business leaders, digital tools can improve productivity, nurture revenue growth, and improve business processes and systems. For policymakers and others looking to boost economic growth, the adoption of digital tools by small and microbusinesses holds promise. 

What does this mean in practice? The Bipartisan Policy Centre’s full report, building on our findings, makes a suite of policy recommendations which can be read here.