Digital technology has changed economies and societies globally, delivering exciting and innovative products, services and conveniences. But what happens to small and local businesses with brick-and-mortar stores in the age of digital commerce? Economic concentration and a general sense that those not living in America’s booming hotspots are being left behind is a growing concern.
Though many fault technology, globalization and trade for exacerbating this trend, an analysis of eBay-enabled small business growth tells a different story. We’ve found that growth actually balances out when technology allows entrepreneurs in less-advantaged areas to jump beyond their local markets and connect to vibrant remote markets.
It is in this spirit that eBay launched its Retail Revival program in January 2018. Retail Revival is a comprehensive 12-month program executed in partnership with select cities focused on connecting their Main Street businesses to the global marketplace.
We are excited to extend this partnership to Baton Rouge, Louisiana, and are hosting a kick-off event today at Louisiana State University to welcome regional sellers into the program. Through extensive training and support, eBay will empower local businesses to take full advantage of the digital economy and grow in their communities by reaching our 182 million shoppers worldwide. These Baton Rouge small businesses will be joining eBay’s dynamic community of sellers across Louisiana who are engaging in global trade at rates once reserved for the largest corporations.
Advancing Cross-Border Trade for Small Businesses
On eBay, 94% of eBay-enabled small businesses in Louisiana are exporters, and they export to an average of 13 countries per year. In the traditional economy, less than 1% of Louisiana businesses export, and they reach just three countries, on average.
It is important to acknowledge there are real, local small business owners driving these impressive numbers, each with their own unique story.
Clark Taylor from Covington, Louisiana, is the owner of Tin-Ups. He got his start in ecommerce when a neighbor mentioned not having enough time to sell his tin signs on eBay. Clark decided to take over the production, shipping and customer relations areas of his neighbor’s business and ran the operation out of a storage locker in Colorado. In 2015, Clark returned to his hometown of Covington to take care of his mom and moved into a workshop to start his own company, Tin-Ups.
Specializing in handmade Americana and custom tin signs, Clark’s business continues to evolve, and eBay has played a central role in its growth. eBay provides Clark an international audience, to which he would otherwise not have access, and allows him to bring money back to his hometown.
Measuring Growth Between Traditional Businesses and eBay Sellers
This “hometown” growth like Clark’s is vital to the well-being of our communities and is a hallmark of eBay’s business model.
A recent eBay report analyzed new enterprise formation in Louisiana’s 64 parishes to measure the effect of providing access to global ecommerce to independent small businesses across the state. To rank different levels of economic opportunity, parishes were categorized into five “well-being” quintiles through an index developed by the Economic Innovation Group (EIG). The report examined the net rate of growth in number of eBay-enabled small businesses compared to traditional businesses in each quintile.
What did we find? In the overall Louisiana economy, net enterprise creation was half the national average (2.3% vs. 5.4%), and also showed clear trends toward greater economic concentration.
Parishes considered the most well-off had the strongest growth rates, while the most economically challenged parishes experienced negative growth.
However, our report found that on eBay, the growth numbers for Louisiana small businesses were not only stronger overall, but – fueled by technology and ecommerce – were also more geographically and economically inclusive.
Inclusive economic growth focuses on opportunities available to those who are facing economic headwinds and may be experiencing the feeling of falling further and further behind. Two-thirds of the state’s population, or roughly 3 million people, live in parishes within the bottom three well-being quintiles. Our report revealed that in the traditional economy, net enterprise growth is nearly flat at 0.8%. On eBay, the corresponding rate of net enterprise growth was a robust 28.7% in the combined bottom three tiers – more than 35 times greater than the rate in the traditional economy’s combined bottom three tiers.
Alternatively, looking at the statewide enterprise growth captured by the Prosperous parishes also provides a window into levels of inclusive economic growth. Only four Louisiana parishes, which represent just over 16% of the state’s population, fell into the Prosperous quintile, but produced 55.6% of the net new traditional businesses across Louisiana. By comparison, these parishes only accounted for 22.2% of the new eBay small business growth. Based on this measurement, eBay growth in Louisiana was 2.5 times more inclusive than growth in the state’s traditional economy.
Technology Can Lead to Inclusive Economic Opportunity
While technology can contribute to economic concentration, it can also be used in a way that reduces disparity and increases access to meaningful economic opportunity.
eBay’s fair and open commerce platform allows small businesses to reach the world and achieve real, sustainable growth – growth that translates to real prosperity for their families and local economies. Delivering this potential is the driving purpose behind Retail Revival, and we look forward to building a more vibrant and inclusive small business community with our partners in Baton Rouge. For more information on Retail Revival in Baton Rouge, visit ebayinc.com/BatonRouge.