TECHNOLOGY

Amazon: Rural businesses has strong digital potential

BY Dan Berthiaume

Bringing digital technology to rural businesses could create significant benefits.

A study from Amazon and the U.S. Chamber of Commerce indicates that expanding access and training for digital tools and services to rural businesses across the U.S. could add more than $140 billion to the U.S. economy during the next three years and create an additional 360,000 full-time jobs in rural communities.

According to Chamber of Commerce figures, there are 37 million working-age adults and 18 million households in the rural U.S. While accounting for close to 15% of the adult population and nearly three-quarters of the country’s land mass, annual revenues of rural businesses represent only 3.7% of total gross revenues in the U.S. economy.

Greater adoption of digital technology over the next three years could grow revenues of rural businesses by $84.5 billion each year (a 21% increase). Rural businesses in West Virginia (+57.6%), Alabama (+32.9%), Mississippi (+32.8%), and Georgia (+31.5%) would experience some of the largest revenue growths over the next three years. Texas, Ohio, and Mississippi would gain the highest number of new jobs, with Texas adding an average of 23,400 new jobs per year over the next three years.

Online tools and technology have the highest potential impact on rural businesses with revenue under $100,000, which could see sales growth surge over 28% over three years.

“We’ve seen firsthand how rural entrepreneurs can transform their businesses through digital technology, from reaching millions of new customers around the world by selling online, to quickly scaling their startups thanks to affordable access to cloud computing,” said Jeff Wilke, CEO, worldwide consumer, Amazon. “Ensuring that small businesses in rural America have good digital skills, are able to attract tech talent, and benefit from fast connectivity will deliver increased economic prosperity in rural communities.”

The report, based on a survey of 5,300 businesses in rural America, outlines a number of recommendations for the public and private sectors, including:

Expand rural business access to digital training and digital tools so they can scale their business. Nearly 41% of respondents agree that policymakers should create programs to incentivize rural businesses to incorporate digital technology into their daily operations.

Increase the talent pipeline of candidates trained in digital skills. 38% of rural small businesses say they can’t hire the talent with the right digital skills in their area.

Increase digital connectivity in rural area. Two-thirds of rural small businesses in America say slow internet or cell phone connectivity has a negative impact on their business.

Other key findings from the report include:
• Nearly 20% of rural small businesses in America generate the vast majority of their revenue (at least 80%) by selling their products and services online.

• 55.2% of rural businesses agree that e-commerce helps them grow their customer base. A similar percentage (54.6%) say that online tools had a positive impact on their revenue in the past three years.

• Almost 40% of rural small business owners say that digital technology has allowed them to sell beyond their state and 16% of them confirm they are selling internationally due to their access to digital tools. Thirty-three percent sell their products using their own websites, 12.7% use a third-party online sales site, and 35.7% use online marketing, including social media.

• 29% of rural businesses say that online tools reduce purchasing costs of products and materials.

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