Cisco Research Finds Small Businesses Can Add $2.3T to Global GDP Growth by 2024

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When it comes to recovery during and after the pandemic, small businesses that are in the more mature stage three and four have the highest ratio of recovering, are able to respond faster to changing market conditions, and are growing their revenue at higher rates.

• 16 percent of those surveyed say they are thriving and feel their businesses are agile and resilient.
• Conversely, 36 percent of small businesses surveyed are still in survival mode and 50 percent are focused on growing or rebuilding their business.
• If 50 percent of these small businesses surveyed could advance to the third stage of the maturity index by 2024, $2.3T could be added to the GDP.  

Small Businesses Know Technology is Key to Recovery, But It Doesn't Come Without its Share of Challenges

COVID-19 has only heightened the fact that digitalization is no longer a choice for small businesses, it's a necessity.

• Of those surveyed, over 70% of worldwide small businesses are accelerating the digitalization of their businesses due to the pandemic.

While digital technologies are more widely available today and help level the playing field, small businesses face constraints on many fronts.

• Working styles, employee safety, cashflow and sales are the most impacted business areas for worldwide small businesses due to the pandemic.
• Additionally, the shortage of digital skills and talent, cultural resistance to change and lack of budget/commitment are key challenges for small businesses even outside of a pandemic.

Small Businesses are More Dependent on Technology and Will Be Investing in  Key Areas

This crisis has made small businesses more dependent on technology and aware of the importance of digitalization.

• About 45 percent of small businesses surveyed expect that over 30 percent of their business will be digital by 2021.
• 36 percent of small businesses are planning to invest in solutions that can help their employees work remotely, as well 33 percent will invest in digital technologies to improve online sales.
• 32 percent of small businesses are also planning to develop a digital strategy to with clear business goals along with 32 percent investing in talent and the right skills. 

When it comes to technology investment during the next 18 months, small businesses are planning to invest in cloud solutions, as well as build on-premises infrastructure, both software and hardware.

• Security is critical for small businesses considering security solutions are part of their top three priorities.
• Customer experience and collaboration solutions are within the top five investment areas. The most mature small businesses are also prioritizing AI/Analytics to drive further competitiveness and reduce human intervention.

Recommendations for Small Businesses: 

Small Businesses around the world are learning how to adapt to the current climate, overcome challenges and adopt technology  that can help them not only survive this crisis, but thrive long after it ends. However, the first question for many is, "where do I start?" Cisco and IDC recommend the following to build resiliency.

• Develop a three-year technology road map
• Prioritize the critical business processes to automate
• Evaluate the right technologies to invest in –focus on empowering remote employees/workforce, a secure e-commerce platform and a robust cybersecurity network
• Invest in talent and skills focused on digital
• Find the right technology partner for your journey
• Leverage financing and remanufactured equipment to help with cash flow and budget requirements
• Keep up with industry trends and best practices
• Simplify, start small, learn and scale

Additional Resources:

• Learn more about the 2020 Small Business Digital Maturity Study
• Beyond Survival: A Small Business Resiliency Guide 
• See more about Cisco Designed portfolio for small businesses
• Find out about Financing Options for Small Business 
• Follow Cisco Small Business on Twitter, Facebook and LinkedIn

About Report Methodology 
The 2020 Small Business Digital Maturity Study gathered and analyzed data from over 2,000 small businesses across eight markets to assess the challenges and opportunities the companies face in their digital transformation journey and in light of COVID-19. The eight markets include, Brazil, Canada, Chile, Germany, France, Mexico, United Kingdom, and the USA.

The Small Business Digital Maturity Index is made up of four dimensions: Digital Strategy and Organization, Digital Processes and Governance, Digital Technology, and Digital People and Skills. Each dimension targets an essential aspect of digital mastery and can be assessed independently as a measure of the relative maturity of a specific aspect of business functionality and performance, providing goals for small businesses to target on their digital transformation journey. 

Four stages of digital maturity

• Stage 1 – Digital Indifferent: A company that is reactive to market changes and digital efforts do not exist 
• Stage 2 – Digital Observer: A company whose digital efforts have started but remain tactile and in bite-sized initiatives 
• Stage 3 – Digital Challenger: A company that has a strategy for the use of digital technologies and is more proactive in market responsiveness 
• Stage 4 – Digital Native: A company that has an integrated digitalization strategy and is focused on driving continuous innovation

About Cisco 
Cisco (NASDAQ: CSCO) is the worldwide leader in technology that powers the Internet. Cisco inspires new possibilities by reimagining your applications, securing your data, transforming your infrastructure, and empowering your teams for a global and inclusive future. Discover more at newsroom.cisco.com and follow us on Twitter at @Cisco.

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SOURCE Cisco