Except for two weak quarters in late 2012, the U.S. economy has gradually been inching toward recovery since the 2008 recession. To date in 2015, gross domestic product (GDP) growth has been moderate, with second quarter's increase reaching just under 4 percent. However, upticks in other key growth trends show promise. Positive personal income, employment, real estate and spending trends, coupled with the rising GDP, have created what some analysts are labeling "balanced economic growth."
At the core of the nation's economic recovery are small to midsize businesses (SMBs). Hardest hit by the downturn, these enterprises have endured the past seven years with grit and determination, many operating on little capital and having even less to invest in future growth. As SMBs kept their belts tightened and readied themselves for economics to turn toward the better, slowly but surely, the tide started to swing in their favor. According to recent studies commissioned by several national insurance and banking brands, this endurance is finally paying off.
One study, conducted by Research Now for small business insurer Hiscox USA, indicated 74 percent of the more than 4,000 SMB owners the company surveyed reported an increase in customers this year. Three out of five said respondents also confirmed their order book was growing.
"Last year small business owners showed encouraging signs that they had weathered the storm and were seeing signs of recovery," stated Ben Walter, Chief Executive Officer of Hiscox, in a Sept. 8, 2015, press release. "This year U.S. small business owners have demonstrated a genuine sense of confidence in the year ahead."
This report and studies conducted by J.D. Power and Associates and SunTrust Banks Inc. indicated a majority of U.S. SMBs are launching new products. SMB owners said they are ready for growth and "somewhat prepared to expand business operations this year," the SunTrust report said. A study by Bank of the West revealed growth-minded SMBs indicated technological investments are a key differentiator that will lead them to achieving new growth objectives.
Industry observers believe the U.S. payments industry will serve up a significant portion of this new SMB technology framework. The Electronic Transactions Association, in alliance with The Strawhecker Group, published a June 2015 infographic that demonstrated the role electronic transactions play in the nation's economic landscape. Entitled Why Are Electronic Payments Important? The piece revealed that 70 percent of the GDP is fueled by consumer spending, and 70 percent of this spending is supported by electronic commerce.
Marc Gardner, North American Bancard CEO and President and producer of PayAnywhere, one of the first mobile payment platforms released by the industry, said, "Today, economic growth and payment technologies have a deeply synergistic relationship, and expanding interest in online and mobile purchasing is literally driving the path of both."
Increased consumer spending and the rapid release of promising mobile payment technologies have elevated the fintech industry. Inc. magazine, publisher of the annual Inc.500/5000 list of fastest growing U.S. companies, dubbed fintech as "one of the most promising industries in 2015." The magazine stated the 2015 list of fintech honorees "have flooded the Inc. 5000," a noteworthy phenomenon for the payments and alternative lending industries, which account for more than 30 companies named on this year's list.
This show of strength is further evidence of synergy between electronic payments and the state of the economy. Some experts believe the link is vital to full economic recovery in the United States.
Cleveland Brown, CEO and co-founder of Inc. 500 honoree Payscout Inc. and contributor to the Forbes Insights white paper, Creating Wealth – A Survey of Entrepreneurs Worldwide: Their Insights. Their Challenges. Their Needs, believes two factors are driving growth in the marketplace today: entrepreneurism and the worldwide commerce system.
"Entrepreneurs would like to see the tax system simplified and taxes on employee salaries lowered," Brown said when Forbes invited him to offer insights on strengthening the U.S. economic system. Brown also said he believes the U.S. economy will benefit by entrepreneurs leveraging electronic commerce technologies to expand service outside the country into emerging global markets.
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