We’ve seen a rapid growth of business formation during 2023, with more than 5.5 million new business applications processed. Starting a business involves basic needs such as connectivity and collaboration. Additionally the ability to ea- sily embrace and deploy cloud applications opens up a host of options for businesses of all sizes, typically once reserved for large enterprises. However, this embracing of technology also brings on concerns related to protecting consumer and business data. For these reasons, the investment in digital infrastructure and cybersecurity is paramount. Consumer behavior and workplace dynamics have changed. Online purchasing, especially in certain segments, like grocery delivery, has penetrated even previously reluctant consumer demographics. The remote/hybrid work model, once the domain of freelancers and temporary work, has become the norm. To meet the demands of increased online ac- tivity, small and midsize businesses have adjusted, increasingly investing in internet bandwidth. According to last year’s State of Small Business Survey, a little more than a quarter (27%) of small businesses upgraded their internet bandwidth in 2020. By the following year, that percentage nearly doubled (52%). That proportion held steady in 2022 (51%) and 2023 (53%). In 2024, small businesses, especially those businesses that are particularly reliant on online transactions, must ensure their internet bandwidth is up to snuff. An e-commerce business with insufficient bandwidth, for instance, may frustrate their customers with slow website loading times and delayed checkout. This could result in abandoned carts and a drop in customer satisfaction. Bandwidth also affects productivity. If your business depends on collaboration and data sha- ring, insufficient bandwidth could reduce productivity. It’s not just that it’s good for your operations and your business – other small businesses like yours, potentially your competitors, have upgraded their bandwidth in recent years. Another way to boost operational efficiency is to invest in AI solutions, which is not exclusively for large enterprises. In fact, according to the State of Small Business Survey, almost half (45%) of small and midsize businesses that use AI see “significant time efficiencies in their day-to-day operations,” which allows them to focus their efforts on core business processes. AI solutions can automate repetitive tasks such as invoicing or data entry. Smart chatbots can be an effective way to handle customer service queries. AI can quickly comb through large amounts of data to identify patterns and ano- malies. As such, it can detect fraud and malicious activity. AI can even be used to optimize supply chain management by using historical data to predict demand. This knowledge enables companies to adjust their production cycles, inventory management and even their marketing. Many small and midsize businesses already see the value in AI. In the same survey, more than a third (35%) of business owners felt that AI could help them offset pain points caused by a reduced workforce. Another 43% believed AI could help them unlock new revenue streams. Still, I’d be remiss if I didn’t point out that many small businesses are skeptical of AI. Forty-five percent were concerned about integrating AI solutions. Many of those concerns were related to cyberse- curity, with 43% of survey respondents saying they thought AI solutions would open them up to cyberattacks. The reality, however, is that small businesses’ biggest cybersecurity threat is their lack of investment in cybersecurity solutions. Only one in three have invested in new security solutions. Almost half (45%) of small businesses don’t even train their employees on cybersecurity—a worrying statistic given that, according to the Data Breach Investigations Re- port, an authoritative annual report on cybersecurity, social engineering is responsible for the vast majority of security incidents and 74% of full breaches. Overlooking cybersecurity could be catastrophic for small and midsize businesses, especially considering the rate of their digitalization. Small businesses can’t afford to be locked out of their systems or to have their customers’ credit card information stolen. Ransomware attacks, for instance, haven’t just gotten more costly, they’re more widespread. The median cost of a ransomware attack has more than doubled over the last two years. The number of ransomware attacks was greater in the last two years than in the previous five years. Cybersecurity is intrinsically bound to digital infrastructure. If you invest in digital infrastructure, you must invest in cybersecurity solutions, or else you may face debilitating financial and reputational damage. Cyber threats are real, but AI is not the greatest culprit. Failing to invest in adequate cybersecurity solutions is. In a time of uncertainty, optimiza- tion is key, but to reap the long-term benefits of optimization, security must be prioritized in tandem. Optimization and Cybersecurity: Antidotes to 2024 Uncertainty Mike Caralis, Vice President of Verizon Business Markets
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