This is a recap from Big Ideas for Small Business, NLC’s national peer network helping local governments accelerate effort to support small businesses and encourage entrepreneurship. To learn more about this initiative email firstname.lastname@example.org.
Kansas City, Mo., well-known for its status as a “Gig City,” has the surprising challenge of a digital divide among small business owners. Local business and entrepreneurs have access to a high-speed broadband network that makes all aspects of e-commerce more accessible, such as online sales, advertising, and customer support. However, many mom-and-pops are not taking advantage of the internet to support their businesses. And they are not alone. Almost half of small businesses nationwide do not have a website.
The digital divide among small business owners is not only an access problem, but an economic one as well. Businesses that don’t have a website, social media presence, or an email account are limited in their ability to attract new patrons and to be responsive to customers’ needs. Over the long term, this could damage revenues and threaten viability of the business, and potentially the neighborhoods they are established. On the other hand, businesses using an online strategy can increase sales by up to 18% percent.
Rick Usher, Assistant City Manager for Entrepreneurship and Small Business in Kansas City, took action with a plan to drive broadband utilization across all industries and business types. The program, called the Small Business Growth Plan, helps businesses understand how to better use the internet to boost marketing and sales. Businesses are invited to complete a free online survey to gauge their level of internet utilization. In turn, each business receives a personalized Digital Economy Index (DEi) Scorecard calculated by the Strategic Networks Group. This scorecard provides specific feedback on how to improve their use of the internet, along with projected cost savings and revenue growth.
For example, in the sample DEi Scorecard above, the Acme Parts Supply manufacturing company received a score of 4.6 out of a possible 10 points. The average score for this industry is 6.2, which means there is room for growth in Acme’s use of online business tools. By transitioning some of their sales, advertising, and customer support services online, it is projected that Acme Parts Supply could net an extra $1.2 million annually.
In addition to helping individual businesses, the DEi scorecard provides policymakers with a monetary calculation for the return on investment gained by closing the digital divide for business owners. This information helps make the case for funding and support for high-speed broadband projects. KCMO’s experience also provides a lesson learned for other cities: You can’t just provide a tool, like citywide broadband, and expect equitable adoption. It’s critical for cities to monitor outcomes, identify gaps, and provide innovative solutions to bridging the divide.
About the Author: Emily Robbins is Principal Associate for Economic Development at NLC. Follow Emily on Twitter: @robbins617.