Tech-Savvy Small Businesses Outperform Peers in Sales, Job Growth

12.01.2013
Small Business

Increase revenues 15 percentage points faster, grow jobs twice as fast

Leaders in the adoption of the latest information technologies among small and medium-sized enterprises (SMEs) far outperform their peers in the marketplace, according to new research by The Boston Consulting Group (BCG). Technology leaders increased their annual revenues 15 percentage points faster than companies with lower levels of technology adoption and created jobs almost twice as fast as other small businesses from 2010 through 2012.

Published in October, the BCG report, Ahead of the Curve: Lessons on Technology and Growth from Small Business Leaders, found that if more SMEs could achieve the growth rates of technology leaders, there is potential for SME revenue to grow by a combined $770 billion in the five primary countries surveyed: the U.S., Germany, China, India, and Brazil. This rate of growth would add some 6.2 million new jobs in those countries alone.

For each of the more than 4,000 SMEs surveyed, BCG took an inventory of each one’s IT capabilities. These include foundational technologies, such as personal computing and productivity tools; connectivity tools, such as access to the Internet and use of mobile technology; whether they have online presence and use social networks; and the use of enterprise capabilities such as cloud-based services. It focused specifically on IT tools and services (hardware, software, and cloud services) and examines the practices that set tech leaders apart and what other companies need to do to catch up.

Additional Findings

The results were consistent across all industry sectors: with some surprises from emerging markets.

Tech leaders in emerging markets grew jobs and revenue faster than those in developed markets and are even quicker than their developed-market counterparts to embrace new tools. More than 80% of tech leaders in emerging markets use cloud services, communication tools, and enterprise resource planning software, while only 60% of tech leaders in developed markets do so.

In addition, the study found that the average revenues of technology-leader companies with female founders mostly match or surpass those of male-founded companies.

Overall, the survey found that the outperforming subset of SMEs stayed ahead of mainstream IT adoption, riding new waves of advancement to improve efficiency, connect with new customers and markets, and compete with much larger players. These companies employ the full range of available tools: from productivity software to Internet connectivity to cloud-based services.

Drawing on interviews with decision-makers at technology leaders, the BCG report identifies a number of barriers to faster and more widespread IT adoption among SMEs. It also provides a roadmap of recommendations for governments and SMEs to help overcome hurdles to IT adoption and argues that the imperative to do so has never been greater.

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