Greater Adoption of Digital Tools in Rural America Could Add $140 Billion to the US. Economy by 2021

Online Tools and Technology Have the Highest Potential Impact on Rural Small Businesses with Annual Revenue Under $100,000

A new report by the U.S. Chamber of Commerce commissioned by Amazon has revealed that unlocking the digital potential of rural businesses across the U.S. could add over $140 billion to the U.S. economy over the next three years and create an additional 360,000 full-time jobs in rural communities.

“We have been selling our family-farmed garbanzo beans, peas, lentils, and wheat for five generations, and since joining Amazon we have grown exponentially”

There are 37 million working-age adults and 18 million households in the rural U.S. While accounting for close to 15% of the adult population and nearly three-quarters of the country’s land mass, annual revenues of rural businesses represent only 3.7% of total gross revenues in the U.S. economy. Despite some improvement in the adoption of digital tools by rural businesses over the past years, this new research shows how increased use of digital technology in rural America could help drive faster growth in the rural economy. Greater adoption of digital technology over the next three years could grow revenues of rural businesses by $84.5 billion each year (+21.0%), with states in the South realizing the greatest benefit. Online tools and technology have the highest potential impact on rural businesses with revenue under $100,000, which could see sales growth surge over 28% over three years.

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“We’ve seen firsthand how rural entrepreneurs can transform their businesses through digital technology, from reaching millions of new customers around the world by selling online, to quickly scaling their startups thanks to affordable access to cloud computing,” said Jeff Wilke, CEO, Worldwide Consumer, Amazon. “Ensuring that small businesses in rural America have good digital skills, are able to attract tech talent, and benefit from fast connectivity will deliver increased economic prosperity in rural communities.”

“The opportunity to successfully start and grow a rural small business in our country is a great example of how technology is positively transforming nearly every aspect of our lives,” said Tim Day, senior vice president of C_TEC, the Chamber’s Technology Engagement Center. “Digital tools and technologies allow rural small businesses to compete in a global economy—regardless of their size or location—which is essential to a vibrant U.S. economy.”

According to the new research, southern states are among the ones that would benefit the most from increased adoption of online tools and digital services, with rural businesses in West Virginia (+57.6%), Alabama (+32.9%), Mississippi (+32.8%), and Georgia (+31.5%) experiencing some of the largest revenue growths over the next three years. Texas, Ohio, and Mississippi would gain the highest number of new jobs, with the Lone Star state adding an average of 23,400 new jobs per year over the next three years.

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The report, based on a survey of 5,300 businesses in rural America, outlines a number of recommendations for the public and private sectors to help unlock the unrealized economic potential of rural America, including:

• Expand rural business access to digital training and digital tools so they can scale their business. Nearly 41% of respondents agree that policymakers should create programs to incentivize rural businesses to incorporate digital technology into their daily operations.
• Increase the talent pipeline of candidates trained in digital skills. 38% of rural small businesses say they can’t hire the talent with the right digital skills in their area.
• Increase digital connectivity in rural area. Two-thirds of rural small businesses in America say slow internet or cell phone connectivity has a negative impact on their business.

“We have been selling our family-farmed garbanzo beans, peas, lentils, and wheat for five generations, and since joining Amazon we have grown exponentially,” said Sara Mader of Palouse Brands, located in Palouse, WA. “In addition to growing our sales, Amazon has given our small business in rural Washington the opportunity to hire 15 local employees and reach customers all over the world.”

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Other key findings from the report include:

• One-in-five rural businesses are already digital. Nearly 20% of rural small businesses in America generate the vast majority of their revenue (at least 80%) by selling their products and services online.
• Technology is boosting rural business revenues. Rural businesses say adoption of digital technologies are important for their future, with 55.2% of them agreeing that e-commerce helps them grow their customer base and a similar percentage (54.6%) confirming that online tools had a positive impact on their revenue in the past three years.
• Online services help rural businesses reach customers out of state and overseas. Almost 40% of these small business owners say that digital technology has allowed them to sell beyond their state and 16% of them confirm they are selling internationally due to their access to digital tools. Thirty-three percent sell their products using their own websites, 12.7% use a third-party online sales site, and 35.7% use o***************, including social media.
• Digital tools and technology help purchasing and cut costs. 29% of rural businesses say that online tools reduce purchasing costs of products and materials.

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