New Research: European Small Businesses Benefit from Digital Safety Net
Brussels, March 24 — A new report shows European small businesses that adopted digital technologies sooner and more aggressively during COVID-19 reported 80% better sales and hired more people than digitally skeptical businesses. Digitally Driven: Europe, a study commissioned by the Connected Commerce Council (3C) in conjunction with Google and Greenberg, of more than 5,000 European small businesses, provides a clear correlation between early and committed digital tools adoption and more customers, better revenue, and more hiring during the pandemic. The report shows that the Digital Safety Net — free and low-cost small business services that support communications and collaborative workflow, digital marketing and advertising, websites and social media, back-office tools, and e-commerce and online payments — provides strong support for European small businesses and positions them for more success in a post-COVID economy.
“Digitally Advanced” small businesses, those that embraced digital tools the earliest and used them the most, were nearly twice as likely to hire new employees than the least prepared “Digitally Uncertain” businesses. And among firms that hired new employees during the pandemic, Digitally Advanced firms hired 3.3X more employees than the Digitally Uncertain. Advanced businesses also retained customers at 1.4X the rate of Uncertain businesses during COVID-19.
“This study highlights how digital preparedness made businesses stronger during a crisis that crippled the European economy,” said 3C President Jake Ward. “Digital Safety Net tools are helping small businesses survive the pandemic, and they make business owners more confident of long-term success after life returns to normal. The Digital Safety Net is real and it is important. European policymakers, tech companies, and small business advocates must ensure small businesses have access to digital small business tools, and to education and training so they can be stronger and more likely to thrive long into the future.”
The report finds 42% of small businesses are Digitally Advanced, meaning they see digital tools as critical to their business. Digitally Evolving small businesses (40%) value digital tools but are not fully committed to them, and 18% of small businesses are Digitally Uncertain. If all Uncertain European small businesses were Advanced, the report predicts they would generate 262 billion Euros in additional sales and 3.76 million new jobs.
Additional findings include:
- 90% of small businesses that stayed in business through the pandemic report that COVID-19 negatively impacted their business. Compared to pre-COVID levels, small businesses had 16% fewer customers and 22% less revenue for the year.
- More European small businesses are“Digitally Advanced” compared to the United States, 42% to 35%.
- 69% of Digitally Advanced say digital tools are more helpful in running their business now than before the pandemic vs. 24% of Digitally Uncertain businesses.