PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Small Business and “Big Tech”: Friends or Foes?

By at 22 March, 2021, 10:32 am

Small Business Insider

by Raymond J. Keating-

Congress has formed an antitrust posse to go after so-called “Big Tech.” And part of the justification – or at least what’s being stated – is to help out small businesses and innovation.

But are small businesses and so-called “Big Tech” friends or foes? I explored this topic with Gregg Stebben in a recent SBE Council “Growth Without Barriers” podcast.

During the conversation, I pointed out that the series of antitrust hearings being held by the House Subcommittee on Antitrust, Commercial and Administrative Law of the Committee on the Judiciary continues a longtime political tradition of finding an industry to pick on – for a variety of reasons – without much serious consideration being given to what the industry actually does. That’s been the case with so-called “Big Pharma,” and now they’re zeroing in on “Big Tech.”

U.S. Tech Serves as a Lifeline and Enabler of Economic Activity During COVID

It’s rather odd to be sending a political posse after leading companies in the online, digital, computer and telecommunications markets when people are coming to a fuller realization, due to the challenges of the COVID-19 pandemic, of the importance of these companies and industries in daily life.

Nonetheless, politicians on both sides of the political aisle are serving up bizarre assertions whereby entrepreneurship and innovation are suffering due to monopolies or monopoly power. Why do so? It turns out to be a combination of special interests seeking aid from the government – namely, certain competitors in the marketplace who are unable to keep up – and political ideologies that are built in part on a fundamental and misplaced opposition or fear of large businesses.

In reality, small businesses have benefited enormously from the investments and innovations made by market leaders like Apple, Amazon, Facebook and Google. After all, all of these companies were small startups at one point, and they went on to become global leaders because they served consumers, including small businesses, well.

And during COVID-19, these and other tech companies have provided services that have allowed many small businesses to survive that otherwise would not have, or to even thrive. That, of course, includes the ability to sell products via Amazon, for example, and to advertise goods and services thanks to Facebook and Google in efficient and affordable ways. For many small businesses, the ability to affordably target or personalize advertising thanks to the various tools offered by Facebook has been a lifeline – even creating new opportunities.

Tech Tools are Empowering Small Businesses: The Big Pivot During COVID

Small businesses have been empowered, for example, to pivot, reach new customers, and improve communications with existing customers. For good measure, these varied technology tools have opened opportunities that have attracted individuals to becoming entrepreneurs.

Indeed, more than being big business pitted against small business – while making clear that competition always comes into play, thankfully, with big businesses having to compete against current, emerging and future competitors – transactions in the marketplace are by definition mutually beneficial and value-creating, including for small businesses using Amazon to sell their wares, and Facebook to market and advertise. In such instances, “Big Tech” and small business function more as partners.

Undermining U.S. Tech Leadership: Helping Our Competitors Take Down American Tech Companies

It must be noted that attacks on these technology leaders undermine U.S. competitiveness and entrepreneurship on the global stage. While one would think that U.S. elected officials would be celebrating U.S.-based businesses being technological leaders in the global marketplace, they inexplicably are attacking, and seeking to raise costs and create uncertainties for these and other firms.

There is no escaping the fact that if government undermines these global leaders, they also are undermining the small businesses and consumers who benefit from the products and services offered by these market leaders.

Again, companies like Apple, Amazon, Facebook and Google are operating during the most dynamic age for free enterprise, and in some of the most dynamic industries. Monopoly and monopoly power are political fictions that fly in the face of what’s actually going on in the real world.

Gregg and I agreed that Members of Congress and their staff would benefit tremendously by actually talking with a significant number of small business owners who use tools like Facebook, Amazon, the Apple App Store, and assorted tools offered by Google, from YouTube to search; and being able to see how these market leaders actually help thousands of entrepreneurs startup and build their businesses.

By doing so, they might get a very different take on the relationship between so-called “Big Tech” and small business, and realize that their antitrust posse makes no economic or business sense.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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