PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

“Big Tech” and Small Business Saturday

By at 25 November, 2022, 9:54 am

by Raymond J. Keating –

Small Business Saturday arrives on November 26. It’s a day established to emphasize the importance of small businesses as the Christmas holiday shopping seasons really kicks into high gear after Thanksgiving. In local communities across America, shoppers are being encouraged to “Shop Small” as part of the annual campaign.

Such an effort starts from a sound foundation.

First, Americans admire small businesses above all other major institutions, according to Gallup. In fact, small businesses at 68% confidence and the military at 64% confidence are the only institutions in which a majority of Americans have confidence.

Second, the U.S. economy overwhelmingly is a small business economy, with 98 percent of all enterprises – both employer and nonemployer firms – having fewer than 20 employees.

Small Businesses Face Relentless Headwinds

Unfortunately, small businesses face significant costs and uncertainties these days. That includes stagflation, uncertainty about where the economy is headed, and counter-productive government policymaking.

While politicians on both sides of the political aisle speak favorably of small businesses, the reality is that far too many policy initiatives turn out to be anti-small business. That’s currently the case with an agenda focused on increased taxes, greater regulatory burdens, protectionist trade measures, high levels of government spending, as well as a Federal Reserve bent on further undermining the economy in the name of fighting inflation (killing economic growth is not how inflation should be countered).

Even when various elected officials rail against so-called “Big Tech,” the policies pushed will wind up hurting small businesses. SBE Council has made that clear in numerous analyses, including these pieces I authored:

Studies Find Klobuchar “Big Tech” Bill Hits Small Businesses Hard 

“I could write that I have my shocked face on right now, but that would be a lie. Elected official are pushing an agenda supposedly targeted at ‘big business’ – indeed, at so-called ‘Big Tech’ and ‘monopolies – but small businesses would wind up paying a heavy price…”

Biden’s “Competition” Executive Order and Big Tech: Hits Small Business, Entrepreneurship and Misses on Economic Common Sense 

“A favorite target on both sides of the political aisle these days has been so-called ‘Big Tech’ – in particular, Amazon, Apple, Facebook and Google. Many Democrats, including President Joe Biden, and some Republicans have come to blame large technology businesses for an array of manufactured ills…”

“Big Tech” Should Worry about Entrepreneurial Dynamism, Not Antitrust Politics and Volatile Regulation 

“In the political world, it seems like everyone – no matter which side of the aisle they reside on – loves small business. And they truly seem to want small businesses to succeed. Just not too much, apparently…”

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

“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?…”

Small Businesses Empowered, Not Shut Out, by So-Called “Big Tech” 

“Technology has empowered entrepreneurs and small businesses in unprecedented ways in recent times. Avenues and options to market and sell their goods and services to potential customers in their own towns, across the nation and around the world have never been so plentiful and affordable…”

An SBE Council poll of small business owners in June 2022 made clear the importance of “Big Tech” to small businesses. For example, as SBE Council reported:

Nearly eight in ten small business owners say that digital tools and platforms are important to their business operations, and 48% believe that potential federal regulation and actions aimed at U.S. technology companies “will have a negative impact on small businesses, thus hurting the economy and its recovery.” Moreover:

● 44% say they will need to start paying for services they currently receive for free.

● 36% believe it will be more expensive to access and retain customers.

● 36% say proposed regulatory actions will harm U.S. investment and innovation.

● 32% think it will be harder for customers to find their businesses.

● 31% believe singling out U.S. companies will give global competitors like China an advantage.

Business owners also expressed concern about the disruption of communications with customers, the erosion or loss of privacy and security protections, difficulty in acquiring new customers, and the disruption of back-office support such as packaging and shipping.

So-called “Big Tech” does not operate like a quarantined island in our economy. Rather, just as is the case with every other industry and business, along with workers and consumers, interrelationships run deep throughout the economy. Therefore, unwarranted and costly regulation of “Big Tech,” like those directed at companies like Alphabet (Google), Amazon, Apple and Facebook, would not just affect those companies, but also the small businesses that supply, work with, and use/consume the goods and services offered by such technology businesses.

So, when we celebrate Small Business Saturday this year, keep in mind the full economic story behind each small business, including the tools and technology they need and use to get their products to the market. Attacking leading U.S. technology firms is no way to celebrate Small Business Saturday.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.

 

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