As the coronavirus rages across all regions of the United States, small businesses are continuing to bear an outsized economic brunt of this crisis. Scores of small businesses are shuttering their doors at a devastating clip — per one recent study, COVID caused roughly 800 closures each day between April and September of 2020 — and the sector at large is experiencing a deeply concerning contraction in confidence. A recent National Federation of Independent Business survey found that U.S. small business optimism fell “below the historical 47-year average of 98 points for the first time since May and [missed] forecasts by economists.”
Given such a grim outlook for a sector that makes this country and its rural regions run — small businesses account for nearly half of all private-sector jobs in America — it behooves policymakers to set its survival as a top priority both amid and after this pandemic. One key tool we strongly encourage lawmakers to home in on and protect: domestic tech innovation, which promptly stepped up to serve as an economic life raft for the small-business sector during the deepest and most daunting depths of this recession. One staggering statistic that underscores the extent to which small business owners are depending on digital tools during the pandemic: Roughly two months into the pandemic, nearly one-third of owners said they would have been forced to close “all or part of their businesses” without digital technology.
Prior to the COVID pandemic, the digital economy – which grew more than three times as fast as the overall economy during the decade between 2006 and 2016 – proved its place as a driver of prosperity. In 2017, per the Bureau of Economic Analysis, “the digital economy accounted for 6.9 percent of the U.S. gross domestic product, or $1.35 trillion,” as well as 5.1 million jobs, “which accounted for 3.3 percent of total U.S. employment.”
And as it relates to small businesses, a subsequent study conducted by this publication in 2018 found that “84 percent of small enterprises are using at least one major digital platform to provide information to customers,” while “75 percent are using tech platforms for sales.” New technology like personalized advertising across a suite of digital platforms enables small businesses to enter large markets the world over. Mom-and-pops on Main Street need not possess a Madison Avenue-sized budget to showcase, sell, and deliver their services to new consumers.
Now, as “43% of small businesses plan on expanding their businesses through digital and related technology as a response to COVID-19, and 30% have already added ways to deliver products and services digitally,” per the U.S. Chamber of Commerce, it’s clear that American technology is no longer just an asset – it is a necessity.
Accordingly, as lawmakers gear up for a fresh governing landscape in Washington, it is critically important that any action in this space be guided by the need to protect, rather than restrict, the tech innovation that is powering prosperity during these unprecedented times – for just as the benefits of America’s tech edge are wide-ranging, so too are the consequences of forfeiting it. The vibrant sector has never been more critical as small businesses fight to recover from the COVID crisis. And as such, it is not merely important, but an imperative to defend this domestic economic engine.
The results of a recent Ipsos poll released toward the tail end of last year provides a roadmap for how Washington should approach the issue at the start of this new one: by working to keep American tech companies competitive as the sector continues to support the survival of small businesses. While a full 96 percent of voters “worry about small businesses in their community experiencing another economic downturn,” nearly the same number “believe American tech companies have played an important role in helping the economy during the pandemic” and want the incoming administration to “take decisive action on behalf of U.S. tech companies.”
These two former public policymakers agree with the public at large about the need to protect the future of America’s technological edge. And as vaccines turn the tide of the pandemic, the time is right for a brand new administration to help small businesses jump start our economy.
Former U.S. Sens. Saxby Chambliss (R-Ga.) and Kent Conrad (D-N.D.) are co-chairs of the American Edge Project’s Economic Advisory Board.
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