Accordingto SMB technology advisor Brent Leary, a new study has found that small businesses “are struggling with marketing and innovation, which is an eye-opener in an age in which "social" marketing and innovation have gained traction.”

According to the June installment of the “Network Solutions (News - Alert)/University of Maryland State of Small Business Report,” the overall health of small business “has declined over the past six months. Marketing and innovation -- the second most important category used in measuring overall competitiveness (only behind access to capital) -- appears to be the main culprit, as it experienced the largest drop in performance.”

The reason why they’re struggling might surprise you. According to Leary, “more and more, businesses are are turning to social tools and strategies to communicate more with customers. In fact the study shows three-quarters of businesses surveyed look to social media to raise awareness of their business, compared to only 56 percent just last year.”

Isn’t social media supposed to, well, help with growth? The report finds that 62 percent even use social tools to stay engaged with current customers, up from 46 percent last year. But as Leary notes, “even with more small businesses engaging customers and prospects over social networks, they are still not as competitive as they were last year, in their own estimation.”

Why? Leary says one finding in the report that really stands out is that “small businesses are having difficulty coming up with new ideas to help them grow.” In fact, he says, “small businesses feel 21 percent less successful in this area this year than they did in 2009. This is particularly interesting, considering those surveyed feel that customer service is an area they do feel is a competitive advantage of theirs -- receiving the second highest score on the survey.”

Such depressing numbers “speak to why it is so important to use the power of social media and networks in the capacity of improving relationships with customers to create truly collaborative relationships,” Leary advises.