New NFIB Report Reveals How Small Businesses Harness Tech and AI

A new report from the National Federation of Independent Business (NFIB) sheds light on how small businesses are engaging with technology and artificial intelligence (AI). The findings reveal a mixed landscape, with many small business owners eager to innovate yet facing significant hurdles when it comes to adopting new technologies.

“Small business owners are our nation’s top source of innovation, yet many small businesses struggle to keep up with technological advancements,” said Holly Wade, Executive Director of the NFIB Research Center. Understanding the nuances of this report is crucial for small business owners navigating today’s competitive landscape.

A vast majority, 82%, of small employers reported having their own websites, a fundamental tool for establishing an online presence. However, only 19% of these businesses accept payments through their sites, indicating a potential area for growth in e-commerce capabilities. Businesses with larger workforces, particularly those with 50 or more employees, exhibited a higher percentage of website adoption, suggesting that website investment correlates with business size and resources.

AI adoption, while still in its nascent stages among small businesses, is gaining traction. The survey revealed that 24% of small employers currently utilize AI technologies—including tools like ChatGPT and Canva—albeit with wide variations by company size. For instance, larger firms are more likely to incorporate AI compared to their smaller counterparts. Small business owners largely recognize the potential of AI, with 63% believing its application will significantly impact their industry in the next five years.

In practical terms, nearly 29% of respondents are leveraging AI for communication tasks, and 27% are using it for marketing. Additionally, there’s a desire among many small business owners to improve operational efficiency through technology. More than half (57%) reported introducing new or significantly improved technologies within the past two years, a vital step toward maintaining competitiveness.

However, there are challenges. Despite the adoption of new technology, small business owners often find themselves at a crossroads. While 65% reported that new technology allows them to stay competitive, only 11% feel that it enables them to surpass their competition. Almost half—48%—of small employers lack a technological edge over their competitors. Wade’s comments highlight this concern, noting the struggle many small businesses face in keeping pace with rapid technological advancements.

The report also reveals that small employers perceive a consistent need for improved technology to bolster their competitiveness. As they navigate these changes, many are looking to incorporate technology that will result in efficient operations without significantly altering their workforce size. Remarkably, 98% of those using AI reported no change in employment numbers, indicating that technology adoption does not always equate to job losses—an important point for business owners wary of these advancements.

For small business owners, the findings present both opportunities and challenges. The widespread recognition of the importance of technology suggests a readiness among many to embrace these tools. However, financial constraints, lack of technical resources, and limited knowledge can inhibit technological integration, creating a barrier to entry for many owners looking to innovate effectively.

Looking ahead, small business owners would do well to evaluate their technology strategies comprehensively—this means considering not only immediate operational needs but also long-term competitive positioning. Embracing new tools like AI and investing in website functionalities can potentially lead to enhanced customer experiences and greater market reach.

The NFIB report stands as a crucial resource for small business owners keen to navigate the complexities of technology and AI adoption. For further details and insights, the full report can be accessed here. As the technological landscape evolves, staying informed will be essential for small businesses aiming to remain competitive and ahead of the curve.

Image Via NFIB

This article, "New NFIB Report Reveals How Small Businesses Harness Tech and AI" was first published on Small Business Trends