Amazon Services Could Add $47B to Economy

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Amazon Services Could Add $47B to Economy
Credit: blog.aboutamazon.com

A new report by tech policy hub think tank C_TEC — a division of the U.S. Chamber of Commerce, reveals that Amazon has benefited rural America in job creation and growth and growth of small businesses.

Amazon Services Could Add $47B to Economy
Credit: blog.aboutamazon.com

The report suggests that Amazon’s services could “potentially unlock $47 billion to the U.S. (Gross Domestic Production)” annually. C_TEC states that there are 37 million working-age adults and 18 million households in the rural U.S.

“While accounting for close to 15 percent of the adult population and nearly 75 percent of the country’s land mass, annual revenues of rural businesses represent only 3.7 percent of total gross revenues in the U.S. economy,” the study suggests. “Despite some improvement in the adoption of digital tools by rural businesses over the past decade, this new research shows how increased use of digital technology in rural America could help drive faster growth in the rural economy.”

Key findings include that if rural American businesses adopt and use online services provided by businesses like Amazon, they could potentially create more than 360,000 jobs per year and increase revenues by as much as 21 percent annually. Greater adoption of digital tools in rural America could add $140 billion to the U.S. economy by 2021, according to the report.

“One-in-five rural businesses are already digital,” Amazon wrote on its blog. “Nearly 20 percent of rural small businesses in America generate the vast majority of their revenue (at least 80 percent) by selling their products and services online.”

Amazon wrote that technology is boosting rural business revenues:

“Rural businesses say adoption of digital technologies are important for their future, with 55.2 percent of them agreeing that e-commerce helps them grow their customer base and a similar percentage (54.6 percent) confirming that online tools had a positive impact on their revenue in the past three years,” Amazon stated. “Online services help rural businesses reach customers out of state and overseas. Almost 40 percent of these small business owners say that digital technology has allowed them to sell beyond their state and 16 percent of them confirm they are selling internationally due to their access to digital tools. Twenty-five percent sell their products using their own websites, 12.7 percent use a third-party online sales site, and 35.7 percent use online marketing, including social media.”

Challenges rural American businesses face

C_TEC cites that poor internet access is a barrier keeping rural businesses from using more online product services. More than 66 percent of small businesses in rural America said they had poor internet or cellphone access, which negatively impacts their businesses. Another issue small businesses face is finding the right person for the job. Thirty-eight percent of rural small businesses say they can’t hire the talent with the right digital skills in their area, according to the report.

One way C_TEC suggests that these issues can be addressed is local government creating incentive programs. Nearly 41 percent of rural small businesses agree that policymakers should create incentive programs that make it easier for rural small businesses to incorporate digital technology into their daily operations, according to the report.

“With greater adoption of digital tools and technology, the potential economic benefits in rural areas are far-reaching: If rural small businesses better adopt online tools and technology, their gross sales could increase by an additional 20.8 percent during the next three years, the equivalent of $84.5 billion per year,” the report suggests. “This increase in sales could contribute an additional $46.9 billion value added to U.S. GDP per year and create 360,054 jobs with $14.8 billion wages per year. By unlocking the digital potential of rural small businesses, the U.S. GDP would gain an additional 0.2 percent per year and reduce the number of unemployed people by nearly 6 percent.”

Sources: blog.aboutamazon.com, americaninnovators.com

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