IBM, U.S. Chamber of Commerce Announce Results of New Study on U.S. Small Business and Technology
IBM-Chamber-Small Business Administration Launch Related Help Initiative to Serve Small Business Tech Needs
NEW YORK, NY (June 01, 1998) – Small-business owners appreciate the value of technology, but when it comes to what
technology to buy, where to purchase it and whom to turn to for help and advice, most express uncertainty and are reluctant
to take risks. This is one of the findings of a major new study of U.S. small business and technology unveiled today by IBM
and the U.S. Chamber of Commerce.
Commissioned by IBM and the U.S. Chamber, the survey of more than 1,000 companies was conducted by Yankelovich
Partners, Inc., and is one of the most comprehensive small business studies to date. In addition to looking at perceptions
and use of technology, the survey examined the make-up of small business, its regional differences, its most active industries and more.
In response to the survey findings, IBM, the U.S. Chamber and the United States Small Business Administration also
announced today that the three organizations have joined to launch a comprehensive public – private sector initiative to
promote new opportunities for small business through information technology. Called the “Small Office Solutions” (“SOS”) Initiative, the program involves a sweeping five-part national assistance effort to educate small businesses on the benefits
of technology.
“It’s no coincidence that this year’s Small Business Week theme is ‘Small Business: Success Through Technology,'” said
SBA Administrator Aida Alvarez. “We live in an increasingly technology-driven economy and small businesses must take
advantage of technology to compete across the country and around the globe.”
“Small-business owners sent up an ‘SOS’ when they told us they are often confused by technology,” said John W. Thompson, general manager, IBM North America. “We want them to know we heard their message loud and clear. As a result, IBM, the
U.S. Chamber of Commerce and the U.S. Small Business Administration are putting in place a number of ways for them to get technology advice and direction from experts at no cost.”
U.S. Chamber President and CEO Thomas J. Donohue added, “America’s future prosperity depends on both smaller
companies and technology. We must link these two vital sectors in a strategic and productive partnership. That’s what our joint initiative with SBA and IBM is all about.”
Study Profiles Small Business and Need For Technology Education
Among the survey’s significant findings are:
As a community, small business knows technology, believes in it and uses it for at least some of their functional needs. A full
90% reported using technology for accounting, finance, billing and more than 50% use technology for 10 core business
functions. Additionally, 96% report owning a PC and 83% report having a modem and a CD-ROM drive. Of those surveyed,
two thirds (67%) have Internet access and a quarter (24%) have a Web site. Of those with Internet access, one third (30%) use
it to promote their services, one half (49%) use it to find out about potential customers, 63% use it for answers to specific
questions and nearly all (85%) use it for e-mail. While only 25% of all small businesses report being familiar with
“e-commerce,” some are already practicing it. Slightly more than one third (37%) of those on the Net use it to place orders,
29% use it to receive orders and 9% use it to pay suppliers. The majority of firms using the Internet — 70% — have been on it
for fewer than two years.
Attitudes on the value of Web sites are mixed; 46% of those with Web sites believe they are worth the
time and effort, 37% are uncertain and 17% either did not answer or felt they were not worth the time and effort.
Most small businesses are cautious about technology. Sixty-one percent buy after technology is proven, 31% wait for price to come down and 54% wait to hear of others’ experiences before buying. Although 83% want to grow, only 47% consider
themselves pro-technology; 47% are neutral and 5% express concerns about technology. Fifty-five percent consider
technology to be “more of a cost than an investment” and 60% express some degree of confusion when purchasing
technology.
As a group, however, most small businesses also exercise a short-term approach to buying technology and a large
number…46%..buy it only as individual pieces and when needed. When the time comes to deciding which technologies are best for their businesses, most are in need of help, advice and guidance. Three out of four say they would benefit from
assistance with technology. In spite of this, only 13% rely on consultants for purchasing advice and information while 76%
rely on friends for keeping up to date on technology. Most spend relatively little on technology, averaging $7,000 per year,
or 8% of total expenditures. Specifically:
ominority owned firms spend 12% of annual expenditures
ofemale owned 9%
omale owned 7%
IBM-Chamber-SBA “Small Office Solutions” Help Initiative
The five-part “Small Office Solutions” program is designed specifically to address the information needs of small businesses.
“This new help program will be delivered through our Business Information Centers, the U.S. Chamber of Commerce, local
chambers and IBM,” said Alvarez. “It will prove to be a valuable resource for assisting small-business owners with their
knowledge and use of leading-edge information technology.”
A comprehensive national program, it offers the small-business owner several routes to reliable expert guidance on technology
issues. Free to small businesses, the initiative includes:
“Small Business ThinkCenters,” a pilot program that will result in fully-staffed technology help centers at selected local
chambers of commerce, a free “Small Business Toolkit” of useful information and resources, a new interactive Web site in
which small business owners will be able to assess their technology needs, toll-free help lines, informational videos, and more.
Under the “SOS” Initiative, IBM will provide technology-related services, solutions, product offerings and pertinent information
for three of the existing SBA’s BICs, or Business Information Centers, (Albany, NY; El Paso, TX; Spokane, WA ), which are
cosponsored by the SBA and the local chambers of commerce. In addition, the Chicagoland Chamber of Commerce will be
the first non-BIC to participate. At these walk-in “Small Business ThinkCenters,” small-business owners will get hands-on experience with the Internet and the latest computing equipment, find answers to technical questions and get referrals to
technology specialists, consultants and vendors. More ThinkCenters are expected to be added as the program continues it national rollout.
U.S. Small Business Profile
Small businesses with fewer than 100 employees were surveyed. Of the 1,010 firms surveyed, 70% have 1 – 4 employees and 59% have annual revenues of less than $500,000. The majority (40%) are services companies, with retail (18%) and
construction (11%) making up the next largest bloc. Most (72%) are not home based.
Regionally, the largest number are located in the South (34%) followed by the West (23%), North Central (22%) and Northeast
(21%). The North Central has more older businesses and the highest annual revenues. Although 71% of small business
technology decisionmakers are male, the South and West tend to have more female technology decisionmakers, and the
firms are more likely to be minority- or female-owned.
Small businesses seeking help on technology issues can contact IBM via the Internet at www.ibm.com/businesscenter or by calling 1-888-426-5800 (reference “sb help”). The United States Business Administration can be contacted at www.sba.gov
or 1-800-827-5722 (U-ASK-SBA). The United States Chamber of Commerce can be reached at www.uschamber.org or
1-800-835-4730.
Source: IBM