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Small and medium sized businesses (SMBs) are significant drivers of economic growth, job creation and new innovation in the United States. Taking advantage of digital tools can help these businesses become more productive, reach new customers, and grow their business.

This 2017 Deloitte study examines the use of digital technology by small businesses in the United States. In doing so, it seeks to 1) provide an accurate picture of how small businesses use digital tools and how they can take advantage of different types of digital opportunities, and 2) quantify the impact of digital tools on small business performance in the U.S.

Deloitte surveyed over 2,000 small business owners and managers across the country, concluding that the level of sophistication in utilizing digital tools varies considerably. To properly quantify the benefits reaped by different levels of digital engagement, each business surveyed is categorized into one of four engagement levels on a “digital engagement ladder”: Basic, Intermediate, High or Advanced.

As shown above, placing businesses in a Basic, Intermediate, High or Advanced category was based on several criteria describing how a given small businesses utilizes digital tools such as websites, social media, cloud software and online marketing tools. A Basic level indicates a relatively undeveloped digital presence, while an Advanced level indicates use of more sophisticated digital tools such as data analytics and mobile apps.

“There are a range of digital tools that can be used by small businesses in order to increase accessibility, information availability and connectivity with their customers.”

Deloitte’s analysis found growth and employment benefits associated with higher levels of digital engagement for small businesses in the U.S. at all ages and across all industries and geographies. In fact, businesses were found to experience revenue growth of 11 percentage points for every additional engagement level reached. The top 20% most digitally advanced small businesses earned two times as much revenue per employee, experienced revenue growth nearly four times as high, were almost three times as likely to be creating jobs, and had an average employment growth rate more than six times as high.

Overall, U.S. small businesses can reap significant benefits from taking advantage of digital tools. Because small businesses represent a key source of economic growth, job growth and innovation, it is paramount that these establishments continue to seek our more opportunities to adopt more significant digital tools.