By Karen Kerrigan, President and CEO of the Small Business & Entrepreneurship Council 

Hats off to America’s 33.2 million small businesses! These enterprises are the very backbone of our economy and the embodiment of American values. Not only do they play a crucial role in job creation, employing nearly half of the nation’s private workforce, but they also drive innovation while supporting our local communities in dozens of different ways. Their hard work, determination, and adaptability exemplify the spirit of entrepreneurship, self-reliance, and the pursuit of the American dream. 

Yet, as we approach National Small Business Week (April 30 to May 6, 2023), it’s vital that we address the escalating threats to their livelihoods, originating from both policymakers in Washington and from China’s expanding global technology ambitions. Our legislators must act swiftly to protect America’s small businesses.

One key ally in small business success is America’s technology industry. Tech tools supported them through the pandemic, enabling them to find new domestic customers and tap into global markets. In our most recent survey of businesses started during the pandemic, business owners overwhelmingly said that American technology tools were critical in launching and supporting their businesses. Notably:

  • 89 percent said access to social media was a major factor in launching their business.
  • 87 percent took advantage of e-payment options and the ease of starting a business.
  • 79 percent relied on affordable online ads and access to infrastructure support.
  • 77 percent relied on e-commerce sites and website builders.

The Dual Threat to American’s Small Business Community

However, America’s small businesses face risks both at home and from abroad. The threat to small businesses from Washington is significant: many mission-critical tech tools are targeted by U.S. policymakers and regulators. In fact, 61 percent of small business said they are “very” or “somewhat” concerned that government regulations against America’s largest technology companies would negatively affect their businesses. Specifically, they are most concerned with losing access to free services and increased costs to find and retain customers.

American small businesses also face risks from China’s growing global technology ambitions. China’s three-part plan for global tech leadership includes building up their own capabilities, stealing American technology and business secrets, and making the world more dependent on its technology for economic and political leverage. If American small businesses become overly reliant on China-controlled technology, they risk losing their intellectual property, putting confidential customer data in reach of a foreign government, and suffering from crippling supply chain disruptions. Even Russia, China’s closest ally, is worried about becoming too reliant on China’s technology, especially in chips, network devices, and electronics. Moscow fears dependency on China’s tech would lead to massive data theft and security risks.

How Policymakers Can Help America’s Small Businesses

To support America’s small business engine, policymakers should avoid making major changes to internet rules that could make it difficult for small businesses to compete against larger companies with more resources. They should not ban personalized ads and targeted advertising, because these are low-cost ways small businesses can compete against big chains. Additionally, they should slow the FTC’s continued regulatory overreach on mergers and acquisitions, its assault on our country’s most innovative tech companies, and other regulatory overkill actions that harm America’s startup ecosystem.

Instead, lawmakers should emphasize reshoring policies that invest in local manufacturing and technology to reduce dependence on foreign sources. They should accelerate innovation by restoring full Research and Development (R&D) expensing and advocate for initiatives that foster collaboration among small businesses, increase resources, and strengthen the development of additional U.S.-based tech resources.

America’s small businesses are the economic engine of our nation. They will continue to drive progress in the future, provided Congress clears the way for their success and doesn’t inadvertently undermine the essential tools they use to connect with customers and grow their businesses. All of America has a stake in getting this right.

SBE Council is a member of the American Edge Project’s coalition of like-minded organizations.