Skip to main content
Home » Small Business » Why Digital Tools Are Vital for Small Business Recovery
Small Business

Why Digital Tools Are Vital for Small Business Recovery


Jake Ward

President, Connected Commerce Council

The past 16 months have been the most difficult and uncertain times in a century for America’s small businesses. 

Many small businesses closed their doors permanently during the pandemic. Still, many survived and built themselves a stronger future by using what we call the Digital Safety Net — free and low-cost small business tools that include online marketing, social media, ecommerce, financial and organizational software, and online marketplaces. 

Our Digitally Driven 2021 Report includes survey responses from thousands of businesses over a full year of the pandemic, and the data is clear. Digital tools are critically important to small businesses. Those that adopted Digital Safety Net tools performed significantly better during the pandemic and expanded their use of digital tools during the crisis. It is also clear that certain types of digital tools are the most valuable to small businesses. 

Becoming advanced

Digitally advanced small businesses, those that intensively adopted Digital Safety Net tools pre-pandemic, lost only 12 percent of revenue during COVID-19 compared to 23 percent revenue losses for digitally uncertain small businesses. Digitally advanced businesses also hired new employees at more than twice the rate of their digitally skeptical counterparts, and digitally advanced firms are more confident, with 88 percent expecting to make new hires this year compared to only 36 percent of digitally uncertain businesses.  

With a solid digital foundation, and the confidence and experience to double-down on the Digital Safety Net, nearly 97 percent of advanced small businesses adopted new digital tools during the pandemic compared to only 51 percent of uncertain small businesses. These businesses adopted tools for hiring, training, collaborating, and ecommerce at a rate of 14 times higher than uncertain businesses. 

We learned that a number of programs were the most valuable tools for small businesses during the pandemic. These include online training platforms, business and data analytics, online hiring platforms, and website ecommerce. Businesses that used online training platforms reported nearly five times better revenue than those that did not; those that used business/data analytics tools generated four times better revenue; and businesses that used online hiring platforms and website ecommerce generated 3.5 times better revenue. 

It is no surprise that advanced small businesses were using these tools at significantly higher rates than uncertain businesses. This almost certainly contributed to their better customer retention, customer acquisition, and revenue. 

Overcoming skepticism

Small business advocates, technology companies, and the government can partner together to help small businesses overcome their digital skepticism. More than a quarter of small businesses have yet to significantly adopt digital tools. These businesses are cautious about Digital Safety Net tools. This is due to misconceptions about their cost and difficulty to adopt and use. 

The government can help millions of uncertain small businesses, and help them become stronger and more resilient. Working with the private sector will provide more education and training opportunities. As a result, this will help them engage with the Digital Safety Net. Additionally, they can provide education about which tools provide the most value, best practices for implementing these tools for businesses with no experience in the digital ecosystem, and provide updated courses and training. This will ensure businesses can stay current on the tools available and how best to use them. 

A fundamental economic and small business policy goal should be to convert digitally uncertain businesses into digitally advanced ones. If the government, small business advocates, and technology companies work together, they can achieve this goal and the small business recovery can work for millions more businesses. 

Next article