If one enters the terms “broadband” and “economy” into Google’s search engine, it takes 0.25 seconds for Google to return 82 million results, the group says. Entering “broadband” and “jobs” returns 171 million results. Clearly, the role broadband has begun to play in the country’s economic future is a large one.
The national nonprofit group Connected Nation released data detailing the key role broadband plays in business performance and the implications for a continuing economic recovery. Connected Nation’s research shows that U.S. businesses generate $411.4 billion in online sales to consumers or other businesses, yet an estimated 1.8 million businesses remain unconnected to broadband.
“The economic impact of broadband is far-reaching and immense,” says Connected Nation Chief Policy Counsel Thomas M. Koutsky. “But our research shows that there is a significant broadband adoption and use gap among businesses in many important areas of the economy.”
Connected Nation surveyed of more than 7,000 businesses in Alaska, Florida, Iowa, Michigan, Minnesota, Nevada, South Carolina, Tennessee and Texas; its Business Technology Assessment was conducted as part of the State Broadband Initiative (SBI) grant program, funded by the National Telecommunications and Information Administration (NTIA).
Here’s what the surveys revealed:
>> Some 4.4 million U.S. businesses have Web sites, including more than 2 million businesses with fewer than five employees.
>> The median price paid per month for broadband by businesses is $68.32.
>> The median download speed among broadband-connected businesses is 4.9 Mbps.
>> Online sales account for $411.4 billion in annual revenues for U.S. businesses.
>> Nearly one in three businesses (32 percent) earn revenues from online sales. This translates into more than 2.4 million U.S. businesses.
>> Broadband-connected businesses bring in approximately $300,000 more in annual median revenues than non-broadband adopting businesses.
>> Minority-owned U.S. businesses account for $49 billion in annual sales revenues from online sales (or 12 percent of total online sales). A large percentage of minority-owned businesses report using broadband to handle some or all of their business functions (79 percent, compared to 76 percent of all businesses on average).
>> 32 percent of minority-owned businesses use the Internet to bid on job contracts.
>> Minority-owned businesses earn approximately $49 billion annually from online sales.
>> Teleworking also continues to have an impact in the marketplace, with 24 percent of rural businesses and 35 percent of non-rural businesses currently allowing employees to telework or telecommute. About 2.4 million U.S. business establishments allow employees to telework, including 1.5 million small businesses with fewer than five employees
>> More than 2.5 million U.S. businesses use the Internet to advertise job openings or accept job applications, including approximately 139,000 businesses that only accept online applications.
>> The Internet is a major resource for non-profits to find employees and volunteers, as 42 percent of non-profits advertise openings online.
Broadband And The Home-Based Business
Anecdotally, most Americans know of successful businesses begun by entrepreneurs operating from their own homes. Connected Nation data indicate that broadband and the Internet play a major role in how home-based small businesses conduct their operations.
Nearly two out of three home-based businesses (65 percent) communicate with their current customers online, and 59 percent (or 588,000) use the Internet to sell or advertise their wares. Not surprisingly, the percentage of home-based businesses allowing teleworking is higher than average at 55 percent.
Home-based businesses, however, do report challenges in robust broadband availability. An estimated 73,000 home-based businesses in the U.S. want to upgrade their broadband connections but report that the service available to them is too slow.
“These findings have important implications for all policymakers and business leaders,” concludes Connected Nation President and COO Tom Ferree. “Expanding broadband access, adoption and use is a proven driver of economic growth and is vital to ensure the United States’ place in the global digital economy.”