IBM Celebrates National Small Business Week at SBA Expo 2004

New Initiatives to Recognize Small Business Innovation, Survey Shows New Investment in Technology

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ORLANDO, FL - 19 May 2004: With nearly 70 percent of small businesses increasing their investments in technology to help them innovate and grow, IBM announced today at the Small Business Administration's (SBA) Expo 2004 new initiatives designed to recognize innovation in the small business community in celebration of National Small Business Week.

According to a survey IBM conducted jointly with the National Small Business Association (NSBA), seven out of 10 small businesses have taken advantage of new tax incentives to invest in technology. To recognize small businesses that use innovation to improve a business process, IBM today announced the Small Business Innovation Contest; open to businesses in the U.S. with 1 - 500 employees. Entrants will be asked to submit an essay of up to 1,000 words by August 16, describing how they used IBM technology to enhance a business process. Qualifying entries will be judged by Jim Blasingame, creator and award-winning host of the nationally syndicated weekday radio/Internet talk show The Small Business Advocate. The top five entries will receive an IBM Thinkpad(*) X40 notebook and the opportunity to have their business highlighted on the IBM Small & Medium Business Web site.(**)

IBM also re-launched an interactive "Ask the Experts" feature available via IBM's Small & Medium Business Web site which gives business owners access to over 200 experts on a variety of business subjects.

"The power of our small business leaders to spur growth is unmatched," said SBA Administrator Hector V. Barreto. "Understanding the role innovation will play in their future is becoming a critical business requirement. Information technology is a tool that is stimulating businesses to be more innovative and, therefore, more successful."

Product offerings such as those found in IBM's Express Portfolio make technology easy for smaller businesses to acquire and use, enabling them to bring innovations to market faster and more affordably. GID Development Corporation in Yorba Linda, Calif., is a small design outsourcing boutique that used Product Lifecycle Management software running on an IBM IntelliStation to design a next-generation roller skate. "By cutting design costs and development time, we saved thousands of dollars, which now enable us to sell our patented new roller skate at a competitive price. The design technology has made it affordable for my start-up to compete in a very competitive marketplace," said James Grimes, senior designer, GID Development Corporation.

Survey Results Show New Investment in Growth
Recent survey data also suggest small business owners are investing to innovate and grow their business. In fact, research firm IDC says that during the 1990s, when small companies increased employment by 3.5 million jobs, personal computer penetration rose 40 percent, and Internet usage rose nearly 30 percent. This correlation between increased small business spending on technology and job growth is further substantiated in a recent survey IBM conducted jointly with the NSBA of 1,001 small firms.

Nearly 70 percent of respondents took advantage of the revised Section 179 rule of the tax code, which quadrupled the expensing limit for capital purchases to $100,000 for qualifying small firms, beginning in tax year 2003. Citing the need to grow and expand, small business owners purchased computer technology ranging from desktop PCs to accounting software. The survey also showed that 54 percent of respondents expected to add to their workforce in 2004.

"Small businesses are using the tax cut to harness the power of technology and drive growth as an engine of our economy," said Todd McCracken, president of NSBA. "With small firms employing half of our country's private workforce, the benefits of this tax incentive cannot be overstated."