Why US small businesses will lead in AI investments in 2024
According to the US Chamber of Commerce, small business drives the US economy. Small businesses employ nearly half of the entire American workforce and represent 43.5% of America's GDP. They are a critical part of our economic ecosystem, where big businesses and small businesses are vendors, employees, partners, and customers to each other. Here are some important US small business 2023 data:
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- 99.9% of businesses in the US are small businesses
- There are 33.2 million small businesses in the US
- 62 million Americans (46%) are employed by small businesses
- For the past 20 years, small businesses have accounted for roughly 40% of the US GDP, which equates to trillions of dollars of economic activity.
- 5.5 million small business jobs were created after the pandemic recession.
Small business is an economic engine
To better understand the small business outlook for 2024, Slack surveyed 2,000 small business owners -- half composed of businesses in tech or retail -- and found that 40% believe 2024 is a "make or break" year for their business.
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Here are 10 important findings of the 2024 small business research:
- 40% of small business owners believe 2024 will be a 'make or break' year for their business.
- 49% of small business owners reported that their businesses performed somewhat or much better than anticipated in 2023.
- 32% of small business owners are worried their business will not survive through the end of 2024.
- Small business owners are worried about inflation/economic conditions (47%), needing to raise prices (32%), rising competition (24%), needing to update their technology without budget to do so (16%), and outdated technology (14%).
- 74% of small business owners are focusing on expanding marketing efforts to attract new customers (51%), developing an emergency fund (45%), and exploring new technologies to increase productivity and efficiency (43%).
- By the end of 2023, 47% of small business owners generated new customers, 30% made a profit, and 26% implemented new technologies.
- In 2024, 60% of small business owners expect to increase their budgets.
- 50% of small business owners are planning to allocate budget toward technology and infrastructure.
- When asked what these new technologies were, small business owners were most likely to have implemented technology for AI (50%), productivity or collaboration (41%), or communication (34%).
- More than a third of small business owners (35%) are excited to implement new technology or update technology for their business in 2024 -- and of those, 49% are planning to implement new productivity and collaboration tools, as well as other software tools (53%) -- reflecting a clear inclination toward maximizing efficiency with limited resources.
2024 Small Business Outlook
As I've written previously, the dust will not settle anytime soon; therefore, business leaders must develop their investment thesis, focusing on improving the customer experience, delivering unique value differentiation, and leaning into technology so that they can deliver value at the speed of need.
Regarding technology investments, it is no surprise that small business owners are looking to AI to improve productivity and communications. It is also important to remember that all AI projects start as data projects. Research based on insights from more than 10,000 analytics, IT, and business leaders reveals the need for a strong data foundation to fuel AI adoption and benefits.
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AI adoption has exploded and amplified the need for a coherent IT strategy. Small businesses have the advantage given their ability to be nimble and forward-looking with minimal technical debt. That said, research also reveals that 90% of IT leaders say it's tough to integrate AI with other systems due to data silos and legacy systems.
Small businesses fuel the economy. And today's knowledge-sharing, hyper-connected, and digital-first economy is powered by AI. Small businesses that will compete and win in 2024 and for the next decade are the ones that leverage data, AI, automation, and trust to their full potential.