SMBs are Driving Growth in AI Adoption

Despite soaring concerns about their business’ financial security and personal job security, the survey found that small to midsize businesses across the country are investing in technology more now than the past three years, both foundational and emerging. This is according to the fifth annual Verizon State of Small Business survey.

In the past year, the number of SMBs using AI has more than doubled (39% of SMBs are using AI in 2024 compared to 14% in 2023), in large part due to the growing familiarity with and accessibility of AI and its business applications. A rise in AI awareness among SMBs has a dual impact: decision-makers are more likely to perceive benefits, but it can also heighten security concerns.

SMBs are also investing more in tech than they have in the past three years. As more SMBs conduct more business online (38% added online/digital operations in the past year), technology investments among SMBs have grown to support that digitalization. Upgrades to internet connection have formed a big portion of those investments, with 66% of respondents upgrading their internet bandwidth.

Other findings:

Despite economic anxiety, SMBs remain optimistic. The majority of SMBs (83%) are worried about rising inflation and its impact on their business, and about four out of five are worried about the U.S. economy in general. Additionally, concerns about their business’ financial security (62%) and their personal job security (54%) have grown over 10% in the past year. Yet even with broader economic anxiety, SMBs remain optimistic about their near-term prospects. About half of respondents expect their personal (50%) and their business (51%) financial security to improve in the coming months. Additionally, the majority of SMBs (59%) believe their business will be in a better economic position next year.
Brick-and-mortar makes a comeback for holiday retail. Despite concerns about the holiday season, namely the perceived need to price goods and services to keep up with inflation, most SMBs have a positive association with the holidays. Small business owners see increased demand during Small Business Saturday (59%) and throughout the holiday season (73%). Additionally, more than half of retailers (52%) are preparing for an in-store-first holiday season, representing a 13-point jump from last year.
Social media is redefining the digitalization of SMBs. Increasingly, SMBs are cultivating their online presence to entice shoppers. A large portion of this shift is taking place on social media platforms. Eighty-four percent (84%) of decision-makers use Facebook to promote products and connect with customers. While Facebook is the leading platform, SMBs are diversifying their approach to social media by leveraging the following platforms for promotion and customer engagement: Instagram (67%), LinkedIn (64%), YouTube (64%), TikTok (57%), and X/formerly Twitter (54%). Nearly four in ten (39%) respondents have social media storefronts.

“Small business owners are getting the hang of AI, discovering how it can automate time-consuming tasks and enabling them to focus more on their core business operations,” said Aparna Khurjekar, Chief Revenue Officer, Business Markets and SaaS, Verizon Business.

“Despite economic and financial concerns, they’re still investing in faster internet, AI tools and social commerce because they understand how these technologies are crucial for their success. That is where Verizon Business plays a large role, as we are invested in the SMB community and are the partner of choice as they navigate the ever-changing business and consumer landscape.”

Click here to view the complete survey findings on the Verizon Business website.