Local small business owners cautiously optimistic about technology
Despite some risks and challenges, small business owners in the Greater Chicago area are optimistic about new technology developments, such as all-digital payments and selectively exploring new emerging trends, like the internet of things and data analytics.
This is just one of the findings in a recent survey of small business owners by Bank of America on a variety of topics.
The generally positive outlook of local small business owners regarding technology aligns with their overall view of the economy and the outlook for their businesses. Chicago entrepreneurs are planning to hire more, with a majority anticipating long-term growth. As part of this effort, many local small business owners are investing in and embracing digital tools and emerging technologies, while still preparing for the risks and challenges associated with them.
All-digital payments within the next five years
One of the most significant innovations disrupting the small business marketplace is the digital payments space, with the majority of Chicago small businesses (56 percent) predicting all business payments will be transacted digitally within five years. Chicago business owners are slightly more optimistic than the 52 percent of small business owners nationwide who believe all business payments will be digital.
Mobile devices have become indispensable, with 89 percent of local small business owners using smartphones and other mobile tools to manage their business.
The uses vary from the more pedestrian, such as basic tasks (71 percent of owners) and social media updates (41 percent), to more complex activities like digital banking (41 percent), digital payments (29 percent), and comprehensive financial tracking (15 percent).
Greater adoption comes with some risk
Chicago business owners did cite some concerns about the impacts of technology on their business, as 39 percent said they would lose revenue and 26 percent stated that they would lose customers if their internet crashed for a week.
Some local business owners noted they've experienced other problems first hand, with 11 percent reporting they experienced a data breach during the past year — three percentage points higher than the national average.
While technology presents some risks and challenges, Chicago small business owners believe the positives far outweigh the negatives. A strong majority of 81 percent believe their future success is dependent on technology as opposed to being threatened by it (19 percent).
Emerging technologies set to transform the landscape
Chicago small business owners' optimism about technology is reflected in their willingness to invest in it. A total of 82 percent of local small business owners make annual investments in technology, with 40 percent doing so at least once per quarter.
Local small business owners are also are investing in emerging technologies at a rapid clip, with half of survey respondents reporting they are using or actively exploring the use of advanced technologies for their business such as: the internet of things (21 percent); data analytics (19 percent); 3-D printing (14 percent); artificial intelligence (9 percent); and virtual/augmented reality (8 percent). Of the 10 major metropolitan areas that were oversampled for the report, Chicago business owners were most likely to believe that artificial intelligence would positively impact their business.
However, local business owners were less interested in blockchain and cryptocurrency.
Fifty-four percent say they're unfamiliar with the distributed ledger technology and only 18 percent believe it will be relevant to their business in the near future. Only 27 percent of local business owners think they will accept cryptocurrency in the near future.
• Drew Piazza is the Chicago small business manager for Bank of America. For more information see the Bank of America's Spring 2018 Small Business Owner Report.