Key takeaways from NFIB Survey
Think of small businesses as idea factories in our economy. They’re often born from new ideas, sometimes even using cool, cutting-edge tech like AI. But here’s the surprising truth: even though they’re great at creating new things, many small businesses find it tough to keep up with the latest technology compared to bigger companies. This struggle can really impact how well they compete and grow.
The Tech Gap: Size Really Matters
The recent NFIB survey clearly shows a pattern: smaller businesses are usually behind bigger ones when it comes to adopting new technology. For example:
- More than half (57%) of all small business owners have brought in new tech in the last two years.
- But this number jumps up a lot with business size:
- Only 35% of businesses with no employees adopted new tech.
- This rose to 51% for businesses with 1-9 employees.
- And it hit 75% for businesses with 50 or more employees.
This “tech gap” largely depends on how big the business is, with the smallest ones facing the biggest uphill battle.
Why Are They Lagging? Common Roadblocks
Small business owners have several reasons for not adopting new technology:
- “Nothing out there would really help my business” was a reason for a quarter of them.
- High cost is a big hurdle, with 20% saying new tech is too expensive.
- Others (19%) mentioned they upgraded 3-5 years ago, and their current tech still works fine.
- Some (15%) simply don’t think new technology is important or necessary for their business.
- Complexity (7%) and financing costs (5%) were also mentioned, though less often.
It seems many small business owners are cautious. Over half (53%) tend to use “what is widely accepted and understood”, and nearly a third (29%) think “if the current stuff works, why mess with it”. Only 18% see themselves as early adopters.
Staying in the Race, Not Always Leading It
When small businesses do adopt new technology, their main goal is usually to keep up.
- 65% said new technology helped them “stay competitive”.
- Only 11% felt it put them “ahead of the competition”.
- 14% used it to “catch up”.
This suggests they’re focused on “keeping up” rather than “finding an edge”. Also, complex technologies tend to stick around for a long time in small businesses, with 40% using their most sophisticated tech for 1 to 5 years and 29% for 6-10 years.
The Rise of AI: Knowing About It vs. Using It
AI is changing how businesses operate, but small businesses are taking it slow.
- Familiarity: While 58% of owners know a bit about AI, 42% are “not at all familiar”. Bigger businesses are much more familiar.
- Current Use: Right now, only 24% of small business owners actually use AI tools like ChatGPT or Grammarly for their business.
- Future Importance: Even with low current use, most believe AI will become more important in their industry (63%) and for their own business (56%) over the next five years.
For those who are using AI, 57% chose to introduce it, while 44% found it was already part of products they used. The main ways they use AI are for communications (29%) and marketing/advertising (27%). AI has mostly had a positive impact, leading to 30% reporting increased productivity and 23% reporting improved product quality. Almost all (98%) said AI didn’t change their number of employees.
The Accelerating Pace of Change
A majority (59%) of businesses surveyed feel that technological advancements in their industry are moving faster now than five years ago. This speeding up means it could become even harder for small businesses to stay up-to-date in the future.
In Summary: A Call to Action
Small businesses are vital for new ideas, but the survey clearly shows they struggle to keep up with technology, especially the smaller they are. This is true for general tech adoption, having a website (only 82% have one, and 19% accept payments through it), and using AI.
This situation has big implications for small business owners, researchers, non-profits, and government agencies. Small businesses often don’t have their own IT teams or the resources to attend big tech conferences. Addressing this “adoption lag” and helping create a more equal tech playing field will require effort from everyone involved. Spending a bit more time and resources to understand and adopt new technology, especially AI, could bring significant benefits.
Source: National Federation of Independent Business