Every year, a few days are dedicated to highlighting the vital role small businesses play in our national, state and local economies. Major credit card companies encourage us to spend more on a designated day, typically around Thanksgiving, to support small businesses before consumers rush to larger retailers on Black Friday. Despite the media and regulatory focus on conglomerates like Amazon and Apple, it’s important to recognize that small businesses represent the backbone of the American economy.
In early May, the U.S. Small Business Administration hosts Small Business Week, a week when we’re supposed to honor the vital contributions of America’s entrepreneurs and small business owners. With more than 33 million small businesses scattered throughout cities and towns of all sizes, these enterprises collectively employ more than 61 million people, representing nearly half (46 percent) of all US employees. In reality, every week should be small business week.
In today’s digital era, technology plays a pivotal role in small businesses’ success and anticipated growth, leading to more efficient operations and boosting competitiveness. Technological advancements have enabled businesses to streamline processes, automate tasks, cut operational costs and ultimately provide a superior shopping experience for consumers. In short, innovative technology has helped to level the playing field so that these small, local businesses can compete against the multi-billion dollar giants.
Tech innovation has served as a critical piece for advancing small businesses, offering these companies a platform to connect with new customers and bridge the geographical gap between urban and rural communities. Consequently, the businesses that have embraced tech are thriving. According to the U.S. Chamber of Commerce, U.S. small businesses supported approximately 100 million jobs and contributed a staggering $17.7 trillion to the nation’s economy during the pandemic. Remarkably, more than 86 percent of these small businesses identified technology as their “lifeline” throughout the COVID-19 crisis.
California, as a hub of innovation and entrepreneurship, mirrors this trend. According to 2023 Small Business Administration data, our state is home to more than 4 million small businesses, the vast majority owned by women and people of color. These small businesses, which make up 99.8% of all California businesses, collectively employ more than 7.5 million individuals. These enterprises rely on an array of technology tools, from inventory management and ordering systems to credit card processing and crop predicting.
Late last year, the US Trade Representative decided to limit the ability of US small businesses aiming to grow internationally by abandoning digital trade protections. These rules advance America’s ability to ensure firms of all sizes and across various sectors, such as business services, manufacturing, transportation, arts and entertainment, and agriculture can effectively compete on the global stage.
Small businesses stand to benefit most from strong digital trade rules. Unlike larger companies, smaller businesses with fewer products and service lines usually lack the financial resources needed to absorb the additional costs of data localization, forced technology transfers and arbitrary regulatory impositions. For decades, both Democratic and Republican administrations have supported international trade regulations, recognizing the importance of fostering innovation to enable our small businesses to thrive in the global marketplace.
American technology is instrumental in enhancing lives and bolstering our economy, even more so for small businesses. Tech empowers small business owners and employees to make well-informed decisions and adapt to market trends. Additionally, digital platforms facilitate seamless communication and collaboration, even among remote teams, fostering innovation and elevating customer service standards.
Technology positively affects every piece of our economy.
Political leaders at all levels of government must acknowledge the symbiotic relationship between technology, innovation and the competitiveness, specifically as it relates to small businesses. Efforts by any presidential administration or Congress that hurts America’s technology innovation should be quickly re-evaluated. Big tech may be a pejorative term to some; however, small businesses benefit most from technology.
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Marc Ang is President and Founder of Los Angeles-based Asian Industry B2B.
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