At the top of the list of concerns for Americans for many years running now has been one four-letter word: jobs. We still have far too many people under-employed and unemployed, as well as a lower workforce participation rate, due in part to many potential workers giving up hope on finding a job.
We have had lots of catalysts for blame but few proposed effective solutions. However, in the small business sphere, ironically something that may have been erroneously considered as a job-killer has been found to be a catalyst for creating jobs: technology.
Recent research from The Boston Consulting Group (BCG) found that U.S. SMBs that leverage technology had 10 points higher job growth and 11 points higher revenue growth than "low-tech" SMBs. The same study concluded that if just 15 percent of low-tech SMBs and 25 percent of the mid-tech SMBs became high-tech SMBs, the result would be the addition of more than 2 million jobs and an additional $357 billion into the U.S. economy.
That is a pretty compelling outcome in our current environment of sluggish growth. So much so that it's starting to get noticed from SMB advocates and policy makers. Business advocacy organizations are taking the BCG study findings seriously and taking action to empower their local small business communities. The Chicagoland Chamber of Commerce, one of the largest Chambers in the country, is one such example, making technology education a top priority in terms of their policy position and member programming. At their recent yearly networking event, The Exchange, Chicagoland Chamber President Theresa Mintle unveiled that they are launching a comprehensive technology education program to help Chicago-area small businesses become better versed in technology and understand how it can help their businesses grow.
In addition to the focus from advocates and attention of large players, the changes in technology have made it easier and more cost-effective for SMBs of all sizes to take advantage of technology. For example, the emergence of cloud technology means that tech services are managed by the cloud service provider instead of the SMB itself, freeing the business from IT burdens of the past. The cloud also means SMBs can finally afford the types of business-class tools that only large companies could afford in the past.
Chicago-based EMJ Companies, a distributor of commercial-grade building materials, is a great example of how SMBs are using cloud technology to enable growth and hiring. EMJ Vice President Gary Wietecha said that the company began using cloud-based Office 365 last year, which boosted its employees' productivity. Because of this shift, EMJ not only anticipates cost savings of $250,000 each year, but has also been able to hire additional staff as a direct result of the cost savings and efficiencies. As he explained, "We have been able to replace some cap ex spending and operating employees and instead, hire people who can help grow our business and impact the bottom line."
The focus on technology as a critical tool for small business growth and job creation has been a catalyst for public/private partnerships and also for larger companies to invest in education. For example, Microsoft (who, for disclosure, has been a client of mine in the past) has made educating SMBs about technology part of its corporate citizenship efforts, partnering with various local business organizations across the country to produce educational events and programs. Thomas Hansen, the VP of Microsoft's worldwide SMB organization said, "The cloud has effectively democratized IT for SMBs." Because of that, Microsoft has put the needs of SMBs front and center in its product development efforts for products like its mobile-friendly, cloud-based productivity suite Office 365. I expect to see continued, increased focus on technology development and education from large technology players who understand the value in helping small businesses grow, hire and be more effective.
BCG Partner Derek Kennedy expands on the power of the cloud for small business as well. His take is that, "The cloud has really leveled the playing field for small businesses. They get access to the same technology and infrastructure that the Fortune 500 use, with costs that are scalable."
The narrative may be surprising, but the results are clear. For many small and medium sized enterprises, embracing technology will be critical for their futures and for the growth of jobs and the U.S. GDP. As an entrepreneur, take the time to learn about new technologies and make continuing education an important part of working on your business. There are strong outcomes to reap for those who do so.