New Research Report: Half of the Smallest Businesses Don’t Utilize AI, One-Third do not Have a Business Website

Washington, D.C. — A new research report released today reveals that a digital transformation is underway in the small business ecosystem; however, not all business owners are fully participating and many face barriers to adopting new technologies that have the power to grow their businesses. 

This multifaceted study, which included multiple surveys and focus groups over the span of 18 months, examined a number of key issues surrounding entrepreneurs’ technology adoption during and after the COVID-19 pandemic. The research finds that nearly all small businesses are using at least some digital technology, including new tools adopted during the pandemic, but some businesses remain largely non-digital in how they work, using only a few digital tools for specific tasks. 

Key findings from the report include the following: 

• About one-third of business owners do not have a website for their business; 41% utilize a social media presence instead. White-owned businesses (77%) are more likely to have a business website compared to BIPOC-owned businesses (65%). 
• More than half of small business owners reported that they need help with technology training, particularly in the areas of third-party selling platforms, social media marketing and cybersecurity. 
• Two-thirds of small business owners use some type of financial accounting software for their business, and more than half (57%) use an electronic point-of-sale system.
• 63% have a cybersecurity plan in place for their business. More BIPOC-owned small businesses (65%) have a cybersecurity plan compared to white-owned businesses (54%).
• 69% currently use some kind of artificial intelligence (AI) technology for their business.
• Almost 8 in 10 (78%) businesses with more than $100,000 in revenue currently use artificial intelligence AI compared to half of businesses with less than $100,000 in revenue.

“Our world is becoming increasingly digital, and small businesses need to adapt to remain competitive,” said Small Business Majority Founder and CEO John Arensmeyer. “While many have made substantial progress, others lack the time, capacity and money to digitize. It’s clear that small businesses need additional support. Policymakers should increase funding for federal business assistance centers like Small Business Development Centers so they can equip small businesses with the tools and resources they need to succeed.”

This report is composed of six surveys of small business owners and decision-makers conducted between Oct. 2022 and April 2024 with 700-1,400 respondents per survey. This research was also supplemented by five focus groups held between Dec. 2022 and March 2023. Click here to read the full report.