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The New Digital Divide: Why Small Businesses Are In Danger Of Being Left Behind – Young Upstarts

December 5, 2025
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The New Digital Divide: Why Small Businesses Are In Danger Of Being Left Behind – Young Upstarts
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by Jay Norris, Founder and CEO of ThoughtPartnr

Thirty years in the past, the web revolutionized the best way corporations giant and small do enterprise. A handful mastered the web panorama faster than others. Ubiquitous manufacturers / Family names resembling Amazon and Netflix began small, then grew to turn out to be a number of the world’s Most worthy manufacturers.

No small- or medium-sized enterprise at this time desires to get neglected of the AI revolution. In comparison with the dot-com increase, the shift presently underway will likely be no much less monumental by way of finding out tomorrow’s winners and losers. However connecting enterprise leaders to the options that can assist them is a problem.

Right here’s the place the gaps will type.

Small vs. giant

A wealth of accessible AI options might help small and medium-sized companies (SMBs).

Varied surveys recommend a discrepancy between the beneficial properties realized by corporations which have totally embraced AI instruments, and people who haven’t. Some SMBs have charted a “do it alone” path, reasonably than hunt down coaching on how one can actually benefit from new instruments to maximise enterprise productiveness and enhance progress. A survey revealed by Enterprise.com in July confirmed solely 52 p.c of corporations utilizing AI are coaching their workers within the expertise.

A 2025 survey revealed by the SBE Council reviews that 88 p.c of small companies used AI instruments. Of these, 73 p.c say these instruments have been essential to their competitiveness and progress over the previous 12 months. But, which means hundreds of thousands of companies haven’t taken benefit of potential time- and money-saving digital instruments that could possibly be very important to their monetary outlook. And a niche between revenues and AI adoption is already forming.

A 2023 SBEC survey confirmed how AI adoption is related to larger revenues: 86 p.c of companies with greater than $1 million in income had been utilizing AI, in comparison with 81 p.c of companies with $500,000 to $1 million, 76 p.c of companies with $100,000 to $500,000, and 66 p.c of companies with lower than $100,000. A separate 2025 survey carried out in G7 member international locations and Brazil mirrored the identical pattern amongst small companies abroad.

This impact isn’t a surprise. Greater-revenue companies have the assets and connections at their disposal to hunt out (and even develop their very own) AI-based options to attenuate or get rid of inefficiencies particular to their enterprise mannequin. However dimension alone just isn’t the one issue that correlates with AI adoption.

Digital native vs. brick-and-mortar

Based in late 2021, the genAI startup Midjourney was reportedly pulling in greater than $200 million in income inside two years. Remarkably, it did so with out enterprise capital funding — or greater than 11 workers. In any period, that sort of progress not often arrives so rapidly.

Turning again to the dot-com increase, think about an organization that purchased a site identify in 1995 and programmed the positioning to turn out to be an ecommerce engine someplace alongside the best way. That firm wouldn’t have seen hundreds of thousands in on-line gross sales in a matter of months, or maybe even a 12 months. Any ROI targets wouldn’t turn out to be real looking till its core clients had been comfy sufficient utilizing a pc to often purchase merchandise off the positioning.

Hundreds of brick-and-mortar corporations made that transition a era in the past. By now, some have taken nearly all of their enterprise offline. But amazingly, some nonetheless aren’t harnessing these first-generation instruments on a rudimentary degree. Unbiased restaurant house owners who aren’t using DoorDash or Uber Eats, for instance, are doubtlessly closing off 40 to 50 p.c of their income — and dropping market share to youthful restaurateurs who hire a kitchen and focus solely on supply. The meals supply startup “Surprise,” based by entrepreneur Marc Lore, is a quickly rising digital meals corridor that gives the efficiencies of a ghost kitchen with dine-in, pick-up, and supply choices.

Small- and medium-sized companies that aren’t digitally native want to concentrate on the aggressive benefits that smaller, newer companies have at their disposal. They won’t have your trade connections, experience, or model recognition in a specific geographic area. However what they lack in expertise, they’ll doubtlessly compensate for with the liberty that comes with decrease overhead, a willingness to take dangers, and an adaptable mindset towards youthful clients who’re extra digitally savvy.

Native vs. nationwide/worldwide

There are roughly 35 million small companies within the U.S. In 2021, they mixed to usher in greater than $16.2 trillion in income, in line with the newest Census knowledge. A small employees doesn’t all the time equate to small revenues, however too usually these enterprise house owners stay in a vacuum. They’re solely uncovered to different professionals of their regional sphere of affect.

Enterprise leaders who aren’t increasing their skilled networks past their area are weak to ignoring AI options related to their mannequin. Giant companies who’ve cracked their trade’s code in a number of states or international locations — battle-tested maybe by varied guidelines and laws — have higher entry to time- and money-saving instruments that may optimize processes for smaller enterprise models world wide.

Think about hospitality tech: instruments designed to assist impartial inns sustain with bigger chains by pairing AI options with processes fundamental to each trade operator. Sturdy branding, services, and customer support might help a hotelier develop to turn out to be a dominant drive of their area, however with out adopting the best and environment friendly applied sciences, it’s straightforward for them to squander income through pointless bills.

Examples like this exist inside many verticals. They’re all a part of the brand new digital divide rising between companies which might be integrating AI into their workflows to streamline operations, and people that aren’t. The data gaps forming between companies giant and small, digital and brick-and-mortar, regional and native, will inform the story of progress over the following decade.

 

Jay Norris

Jay Norris is the CEO of ThoughtPartnr and Chairman of the Expertise and Innovation Council for the Manhattan Chamber of Commerce. He’s a tech entrepreneur and AI catalyst for small and medium-sized companies, connecting leaders with leading edge AI improvements and sensible AI-driven options whereas fostering human connection via mentorship and group engagement.

 

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