Mobile Internet Use by Minnesota Businesses

Transcription

1 Mobile Internet Use by Minnesota Businesses September 2013

2 Mobile Internet continues to soar in usage and popularity. By 2017, global mobile Internet traffic is estimated to be 13 times the amount it was in This includes the use of mobile Internet for personal and business use. Last year Cisco Systems released a study on devices that employees use at their work location. Among employed adults, nearly seven out of ten (68%) smartphone owners and 26% of laptop owners say that work is the primary location where they use their devices. 2 In addition, mobile Internet service is shifting the landscape of the American workplace, as tasks that once had to be completed at a central location can now be performed anywhere. A recent Forrester Research study showed that nearly one-third (29%) of the work force in the United States and Europe conduct work from multiple locations. 3 Among the findings from this survey: More than a third (34%) or approximately 49,000 businesses in Minnesota use mobile Internet service. Mobile Internet service is used most by businesses in the high tech sector, businesses that have 50 or more employees, and businesses located in nonrural areas. Communicating with current customers is the most used application through mobile Internet service. Rural businesses are using mobile Internet to access a wider variety of applications than non-rural businesses. To explore how Minnesota businesses are taking advantage of the opportunities presented by mobile Internet service, Connect Minnesota assessed technology adoption and use among businesses through a survey across the state in This report uses information gleaned from that survey to examine the use of mobile Internet service among Minnesota businesses. Platforms Used to Access the Internet Across Minnesota, 78% of businesses use either broadband at their workplace or mobile Internet service (Figure 1). This means that approximately 32,000 businesses in the state do not use any type of Internet service. However, 2%, or approximately 3,000 businesses, use mobile Internet but do not use broadband at the workplace. Nearly one-third (32%) of businesses use both mobile Internet and broadband service. This means that statewide, approximately 49,000 Minnesota businesses (or 34% of businesses in the state) use mobile Internet service. Figure 1. Internet Services Used by Minnesota Businesses 2% 32% Only Use Mobile Internet Use Mobile Internet and Broadband 44% Only Use Broadband Do Not Use Mobile Internet or Broadband 22% All Businesses 1 Cisco Systems, 2 Cisco Systems, 3 Forrester Research, Mobile Internet Use by Minnesota Businesses 2 September 2013

3 Use of Mobile Internet among Minnesota Businesses Table 1 shows mobile Internet use of businesses by sector, size, and geography. Mobile Internet service is used most by the high tech sector (55%), businesses with 50 or more employees (53%), and businesses located in non-rural areas (40%). Also, nearly one-third of women-owned businesses (32%) and nearly one-half of minority-owned businesses (49%) use mobile Internet service. More than half of businesses that use mobile Internet service say that the majority of their employees (56%) access the Internet on a cell phone or mobile device for their work. This suggests that businesses of every size are relying on mobile Internet service for a variety of purposes. Use Mobile Internet Service Statewide 34% Sector High Tech 55% Wholesale 51% Professional and Financial Services 44% Manufacturing 33% Agriculture, Mining, Construction, and Utility 32% Healthcare 26% Retail 17% Other Services 34% Size Fewer than 5 employees 34% 5 to 19 employees 29% 20 to 49 employees 39% 50 or more employees 53% Geography Table 1. Mobile Internet Use by Business Size, Sector, and Geography Non-Rural 40% Rural 25% Women/Minority-Owned Businesses Women-Owned Businesses 32% Minority-Owned Businesses 49% Mobile Applications Used by Minnesota Businesses Statewide, nearly nine out of ten (88%) Minnesota businesses that use mobile Internet do so to communicate with their customers (Table 2). This is the application used most often by businesses that use mobile Internet service. Mobile Internet Use by Minnesota Businesses 3 September 2013

4 Activities Businesses that Conduct the Activity via Mobile Service* Non-Rural Businesses that Conduct the Activity via Mobile Service* Rural Businesses that Conduct the Activity via Mobile Service* Communicating with current customers 88% 85% 93% Providing customer support for products or services 57% 53% 66% Selling or accepting orders for products or services 38% 35% 44% Conferencing or other online meeting applications 37% 42% 22% Conducting business with local, state, or federal government offices 36% 36% 35% Purchasing or placing orders for products or services 35% 32% 41% Marketing and advertising products and services 28% 27% 29% Travel and expense-tracking applications 23% 20% 30% Accepting real-time payments such as credit card and debit payments Table 2. How Minnesota Businesses Use Mobile Internet Service * Among Minnesota businesses that report that they use mobile Internet service 19% 21% 13% More than one-half of businesses that use mobile Internet service (57%) do so to provide customer support for their products or services. This suggests that mobile Internet service is able to help the majority of these businesses retain their current customers by providing time-efficient responses. Other applications such as activities related to online sales were reported by less than one-half of mobile Internet-connected businesses. While rural businesses do not adopt mobile Internet service at the same rate as non-rural businesses in Minnesota, these businesses are more likely to rely on mobile Internet service to conduct some online applications. For example, 44% of rural businesses that have mobile Internet connections use this tool to sell or accept orders for products or services, compared to 35% of non-rural businesses. This is not surprising, as mobile Internet may be the primary or sole way to access the Internet by many rural businesses. Conclusion Over one-third (34%) of all businesses in Minnesota are using mobile Internet for businesses purposes, and more than half of employees of those businesses are using the service (56%). The highest usage groups of mobile Internet service are in the high tech sector and businesses with more than 50 employees. Businesses find the most use of mobile Internet by communicating with their current customers and providing customer support. Across the state, rural businesses are using their mobile Internet connection to access a wider variety of online applications than non-rural businesses. While businesses with only a fixed broadband connection dominate the choice of Internet connected businesses in Minnesota, the popularity and projections of mobile Internet use indicates that the service will begin to be adopted by more businesses in the future. Mobile Internet should be considered when planning policies aimed at Internet connectivity and businesses. Mobile Internet Use by Minnesota Businesses 4 September 2013

5 Methodology Between April 3 and April 30, 2013, Connect Minnesota conducted a telephone survey of 801 business establishments across the state. A business establishment is defined as a single physical location at which business is conducted or services or industrial operations are performed. Upon reaching a business establishment, the surveyor asked to speak with the person most knowledgeable about [the] organization s technology use. On average, these surveys took approximately 11 minutes to complete. Data were collected by Thoroughbred Research of Louisville, KY. Sample quotas were established by company size (5 brackets) and industry sector (8 sectors). Within these 40 cells, a randomly-drawn sample of businesses listed with Dun & Bradstreet was contacted for the survey. Altogether, this sample included 129 businesses with 50+ employees, 178 businesses with employees, 208 businesses with 5-19 employees, and 286 businesses with 1-4 employees. In cases where the respondent s information regarding the number of employees at the establishment differed from the information provided by Dun & Bradstreet, the respondent s answer was used in determining business size quotas. Each business establishment was also asked to confirm their physical location (county and state) to establish that the business establishment was physically located within the state. At least four attempts were made to reach a business establishment at each working telephone number on different days of the week and at different times of the day to increase the likelihood of contacting a potential respondent. Connect Minnesota intentionally over-sampled large businesses to ensure a sample that was large enough to analyze and compare to smaller businesses. In addition to the size and sector quotas, the data was subsequently weighted using a rim weighting process to ensure that the sample was representative of all employer business establishments statewide, with targets determined according to the 2011 United States Census Bureau s County Business Pattern report, the most recent data that was available at the time the survey was conducted. Weighting of the survey data and research consultation were provided by Lucidity Research LLC, located in Westminster, MD. For the purpose of setting quotas and weighting, businesses were categorized by the North American Industry Classification System (NAICS) code associated with each establishment in their Dun and Bradstreet listing. In addition, interviewers confirmed the accuracy of these NAICS code classifications by asking, Our records indicate that this business we have been talking to you about is primarily involved in [name associated with 4 digit NAICS code]. Is this correct? Businesses are considered part of the High Tech industry sector if the industry associated with their 4 digit NAICS code has a high proportion of technology oriented workers, including engineers, engineering technicians, scientists, science technicians, and managers in engineering, computing/information systems and science. This definition is based on a study published in the July 2005 issue of Monthly Labor Review. Rural business establishments are defined as operating in a county that is not a part of a Metropolitan Statistical Area (MSA), as designated by the United States Office of Management and Budget. Based on the effective sample size of 513, the effective post-weighting margin of error = % at a 95% level of confidence for the statewide sample. As with any survey, question wording and the practical challenges of data collection may introduce an element of error or bias that is not reflected in this margin of error. This business survey was conducted as part of the State Broadband Initiative (SBI) grant program, funded by the National Telecommunications and Information Administration (NTIA). The SBI grant program was created by the Broadband Data Improvement Act (BDIA), unanimously passed by Congress in 2008 and funded by the American Recovery and Reinvestment Act (ARRA) in Mobile Internet Use by Minnesota Businesses 5 September 2013

6 Definitions Technology Adoption Definition 1. Broadband adopters are defined as respondents who answered yes when asked Does your company use the Internet to handle any of your business functions? AND when asked Which of the following describe the type of Internet access your company has? responded DSL, Cable Modem, Fiber Optic service, Dedicated Services such as T1 or T3, Fixed Wireless broadband through an outdoor antenna, Satellite broadband, 3G or 4G wireless service through a cellular phone network, or a similar technology. Respondents could provide multiple answers. 2. Mobile Internet users are defined as businesses that answered yes when asked Do employees at your business use mobile Internet service on a cell phone or mobile device to handle any of their business functions? Rural Definition The U.S. Census Bureau uses an urban-rural classification based on Metropolitan Statistical Areas (MSAs), which are designated by the United States Office of Management and Budget to collect, tabulate, and publish federal statistics. Metropolitan statistical areas contain a core urban area with a population of 50,000 or more. Each MSA also includes one or more counties that have a high degree of social and economic interaction with the urban core (further information on definitions for MSAs can be found at: When classifying urban, suburban, and rural counties, we follow the Census Bureau definition whereby counties are categorized as urban if they contain the core city of an MSA. Suburban counties are MSA counties that do not contain a core city, and rural counties include all remaining counties that are not part of an MSA. Mobile Internet Use by Minnesota Businesses 6 September 2013

7 APPENDIX A: Connect Minnesota 2013 Business Technology Assessment Total n= All Businesses 801 Geography Non-Rural Businesses 510 Rural Businesses 291 Mobile Internet Use All Businesses that Use Mobile Internet Service 329 Non-Rural Businesses that Use Mobile Internet Service 232 Rural Businesses that Use Mobile Internet Service 97 Mobile Internet Use by Minnesota Businesses 7 September 2013