Small businesses are in many ways the lifeblood of the economy. They hold the key to economic recovery around the globe because of their role in driving innovation and creating jobs.
Historically, small businesses and entrepreneurs, particularly those in the high tech space, have driven innovation, invention and the creation of new industries. And the sustained recovery of the global economy hinges on their ability to grow.
- In the U.S., 65% of net new jobs have been created by Small Businesses over the past 17 years.
- In Europe, more than 90% of businesses are Small Businesses
- In South Africa, where unemployment is 40%, 80% of all new jobs are created by Small Businesses
- In the U.S., 13-14 times more patents are created per Small Business employee than by Fortune 1000 employees.
Small Businesses are also critical to providing the jobs the developing world needs, and to providing jobs in a world that now has 7 billion people.
- Africa: 40% of citizens plan to start a business in the next 12 months.
- India: Small Businesses will account for 22% of India’s GDP over the next three years.
- Women: Small Businesses can help to provide more opportunities to women, which is key to helping communities rise above poverty.
- Growing middle class: Small Businesses will help to address the employment needs of a growing and increasingly urbanized middle class.
Small businesses are faced with a number of challenges today that are preventing them from being the engine for growth we need right now. At SAP, we’re talking to tens of thousands of small business owners around the world. And from this, we know that in every region, they are facing many challenges threatening their ability to thrive—from the inability to access credit to finding skilled workers. But the combination of new technologies and the innovation small businesses can introduce are creating a time of tremendous opportunity.
The 4 Technology Trends Driving Change
Companies, government organizations and small business owners are facing a time of dramatic change. Customers and constituents have access to news and information at their fingertips, and in an instant. Smart phones and high-speed mobile connectivity are driving unprecedented increases in access, in even the least developed parts of the world.
And with social connectivity and engagement, the world’s consumers, business buyers and tax payers are getting the information they need, when they need it. They are finding their voice and they are coming together to express their needs, their demands, their hopes and their dreams.
Business owners are able to meet these growing demands with the ability to connect to market information in real time, to participate with customers virtually and to sell their products and services directly over the internet.
Small businesses in particular are looking to technology to provide the tools they need to meet growing needs and greater demands. They are seeking to innovate, to grow and to gain competitive advantage through 4 key technology trends:
- The rapid spread of internet connectivity to all parts of the world
- The challenge of managing “Big Data” and the promise of Real-Time Analytics
- Cloud Computing
- Social Networking
What Is Big Data And The Promise of Operating In Real-Time?
Today, organizations have more data than ever before. Consider that the average Fortune 1000 company has 10 years of data sitting in its databases. They have data about their employees, their customers, their competitors, their performance metrics, their financials and more. While this can seem overwhelming, these stats are helping them to understand the world and the threats and the opportunities with greater clarity than ever imagined.
But the data is growing exponentially. It’s doubling every 18 months for many organizations! There is not just more data, but there are more sources of data from everyday sources and unexpected ones—from sensors in automobiles to shipping crates. The “internet of things” means that data is coming from more and more sources and it’s connected. But how do organizations use all this information?
Businesses, governments and human aid organizations have an enormous opportunity to better meet the needs of their customers and constituents. This means the power to effect change no longer sits in the hands of a few “experts” but with all of us, who can make informed decisions based on access to powerful sources of information. Small businesses in every corner of the globe will create new jobs, fill these needs and spread wealth.
The enabler in this – the thing that makes this vision possible- is the technology that can keep pace and quickly make sense of the data. We have developed technology at SAP called In-Memory Technology, that can quickly analyze millions of pieces of information—and enable small businesses to analyze it from anywhere—even a mobile device.
And this technology is leveling the playing field so that small companies can compete and win against much larger rivals.
Connectivity, Cloud Computing And Mobility: The Drivers Of Growth
We are witnessing a major shift, where all this data – personal and professional- is moving to the cloud. Your friends, photos, business connections, music, personal files, business expenses, revenue reports, customer data, inventory tracking, sales commissions and more are all moving to the cloud.
For organizations, this means enormous fixed costs can be unleashed as operating costs that can be adjusted and controlled over time. For small businesses, entrepreneurs no longer need to make huge upfront investments in technology that they may use infrequently, but rather they can “rent” it as they go.
Now combine cloud computing with always-on connectivity and mobile applications, and small businesses have a number of technologies at their disposal today that level the playing field by lowering the barrier to entry, and enabling them to compete with larger enterprises and make scalability more achievable.
So we’re working to help small businesses by leveraging our own expertise and convening a collective intelligence to address challenges Small businesses face, including: finding talent, accessing capital, integrating technology, and dealing with government regulations.
Citizens of The World
At SAP, we’re trying to create an environment where businesses and government organizations of every size can grow and thrive, where jobs can flourish and where innovation and invention continue to drive our world economy.
Today, April 12th, our Co-CEO, Bill McDermott will be speaking to the Council on Foreign Relations in Washington, DC covering the topic of innovation and the power of small businesses to drive jobs and growth for our economy. We’ll cover his presentation and the main discussion points. In the meantime, check out some of our other efforts on Business Innovation, corporate social responsibility, download our 2012 Sustainability report and check out the research predicting that the cloud will create more jobs than the internet.