Study: MN Cos. Make $38B Online Annually

Study: MN Cos. Make $38B Online Annually

Minnesota companies have increased their use of broadband technology to grow their sales and remain competitive, according to a recent report.

Minnesota businesses that sell products and services online now earn more than one-third of their revenue through online sales, according to a recent report compiled by Connect Minnesota, a St. Paul-based nonprofit that advocates for widespread access to technology.
 
The organization’s “Business Technology Assessment” measured broadband use—including DSL, cable modems, dedicated services, fixed wireless, fiber, and satellite options—among Minnesota businesses.
 
The report was based on a telephone survey of 801 businesses throughout the state, including the following sectors: technology (98 companies); agriculture, mining, construction, and utility (100); manufacturing (96); wholesale trade, transportation, and warehousing (95); retail trade, recreation, food, and lodging (108); professional and financial service (110); health care (103); and others (91).
 
Companies included in the survey needed to operate at least “a single, physical location at which business is conducted or services or industrial operations are performed.” Employee size was also taken into consideration—sample businesses among the 801 included 129 companies with 50 or more employees, 178 with 20 to 49 employees, 208 with five to 19 employees, and 286 with one to four employees.
 
Click here for the study’s full methodology.
 
The study’s results indicated that 76 percent of Minnesota businesses use broadband services—an increase of 3 percent from 2011 (based on the most recent U.S. Census Bureau’s “County Business Patterns” report). Approximately 38 percent of Minnesota businesses earn revenue through websites, with online sales accounting for an estimated $38 billion in annual revenue for companies statewide.

That estimate is the total of three components: 38 percent of respondents reported earning revenue from online sales. Those companies reported earning 33 percent of their revenue from online sales. Companies that indicated earning revenue from online sales reported average annual revenue of approximately $2.1 million. Those components were plugged into an equation, which resulted in the $38 billion annual online revenue estimate.
 
Connect Minnesota State Program Manager William Hoffman told Twin Cities Business that broadband assists businesses, whether large or small, in creating revenue and client growth by allowing them to reach a broader audience.
 
“[Businesses] need to be online to reach the full potential of the marketplace,” he said.
 
The survey’s results also indicated that more businesses are allowing employees to work remotely. According to the report, 30 percent of all businesses and 35 percent of small businesses (those with up to 20 employees) allow telecommuting.
 
Hoffman said that trend stems from the “greater flexibility” that broadband services facilitate and the ability for those services to foster “that connectivity for businesses and employees, allowing them to work in dynamic ways.”
 
Meanwhile, approximately 40 percent of businesses in the state reportedly found it “difficult” or “very difficult” to find qualified employees with the technical skills they require. That statistic, Hoffman said, proves that “the state can benefit from further efforts to promote digital literacy and computer skills training in order to better prepare its workforce for the job openings of today and tomorrow.”
 
For the full report, including a breakdown of broadband use by sector, click here.
 
Connect Minnesota is a subsidiary of Connected Nation, a Washington, D.C.- based technology research organization. In addition to partnering with the Minnesota Department of Commerce, Connect Minnesota provides businesses, government entities, and universities with statewide technology research.