Tech and Innovation are Essential to America’s Small Business Success
By Karen Kerrigan, President & CEO, Small Business & Entrepreneurship Council
National Small Business Week is a time to celebrate and recognize the outsized role small businesses, their owners, and their employees play in America’s success.
In every community across our country, small businesses make a vital difference. First, they are engines of economic growth. In fact, America’s 32.5 million small businesses collectively employ 61.2 million people – nearly half of the U.S. private workforce – and provide meaningful wages, benefits, and economic opportunities to local citizens. Second, these businesses and their owners are a key part of the social and cultural fabric of our communities, sponsoring youth sports teams, filling volunteer shifts, and serving as leaders of various civic organizations.
So, when the pandemic threatened the solvency and viability of many of these businesses over the past two years, their owners and workers turned to what they know and do best: they innovated. Some completely shifted their business lines to meet new market needs. Others doubled down on their core offerings and found alternative ways to put these into the hands of their customers. Other businesses moved into hybrid modes. But at every step, these businesses tapped into the powerful digital platform tools built by America’s technology companies.
E-commerce platforms allowed small businesses to continue to make and fulfill sales and to purchase inventory, even if no one was physically at their brick-and-mortar location. Video and home office connectivity tools allowed workers to continue earning critical paychecks while working remotely. Social media and digital advertising not only allowed businesses to reach existing customers, but also opened up whole new markets and customer segments who were simultaneously turning heavily to the internet as they were stuck at home. Powerful search tools helped businesses navigate supply chain challenges to meet customers’ needs.
Here’s the bottom line: the ability to utilize technology and innovative tools was, for many of these businesses, the difference between staying in business or abandoning their dreams. In fact, a recent survey conducted by our organization, the Small Business & Entrepreneurship Council, found that nearly two-thirds of small businesses leveraged online platforms to support their business during COVID-19, with some saying the transformation to the digital economy actually helped their business to grow.
How important was technology to business success during the pandemic? Despite COVID’s hardships, a record number of small business applications – 5.4 million – were filed in 2021. And 89 percent of the small businesses surveyed said that access to social media tools and online platforms played a major factor in individuals launching their businesses. Tech tools are an essential ingredient of small business success.
Yet as we begin to move beyond the pandemic, Congress is considering a series of anti-innovation bills that would take aim at the very heart of the technology platforms that helped countless small businesses survive. Collectively, these bills could break up America’s tech companies, restrict lines of business they could participate in, prohibit merger activity, and eliminate – or make more costly – critical digital services. While severely hamstringing U.S. tech companies, few of these bills’ restrictions would apply to China’s tech companies, handing them an advantage for decades to come and making us more dependent on foreign technology.
Higher costs, fewer digital tools and services, and a greater dependency on technology from China is the very last thing America and its small businesses need, especially when we are facing the highest inflation in 40 years. In fact, more than half of small business owners are concerned that Congress’ misguided policies will hurt their businesses by increasing costs and limiting access to tools they use every day.
Instead of trying to dismantle digital tools that are so essential to small businesses, Congress needs to support legislation that expands innovation, reduces critical supply chain gaps, and allows small businesses to better compete, survive, and thrive. The stronger we make our small business sector, the stronger America will be.