ICYMI: House Small Business Committee Hearing Testimony Highlights The Benefits Of Tech For Small Business
Yesterday, the House Committee on Small Business held a hearing examining the impact of leading tech services on America’s small businesses. The hearing featured positive input from technology experts and small business owners, with an unambiguous main point: leading tech services allow small businesses to innovate and compete in ways that they otherwise couldn’t.
Highlights from the testimony below.
Tech services grant small businesses access to a wider customer base than traditional brick-and-mortar can offer, increasing competitiveness.
Jake Ward, President of Connected Commerce Council: “Digital technology, digital platforms, and digital tools help small businesses start, grow and succeed in previously unimaginable ways — not only locally but way beyond traditional geographic limitations. Digital advertising and online marketing help small companies find new customers — globally and cost-efficiently. Data helps small businesses serve more customers at a lower cost. The digital cloud helps small businesses reduce paperwork, reduce their environmental footprint, and go on vacation while remaining available to colleagues and customers. Digital marketplaces help small businesses sell more products locally and globally.”
Graham Dufault, Senior Director for Public Policy at The App Association: “The competitive conditions over the past 10 years, and presently, suggest that the nature of competition in this space will continue to evolve and benefit consumers on the whole. One of the central markets at issue in the debate around the state of competition in the platform ecosystem — informally, we could call it the market for developer services, where a developer pays a platform for various services including distribution, marketing, etc. — also experiences vigorous competition.”
Leading tech services reduce typical barriers to entry for small businesses, allowing them to channel resources towards product innovation.
Graham Dufault, Senior Director for Public Policy at The App Association: “At first, developers were reluctant to join platforms, worried that the model might not accommodate their ability to ‘launch fast and iterate’ their apps. But successful platforms changed the app ecosystem by providing app developers with ubiquitous access to a broader swath of consumers. Platforms provide a centralized framework for app developers to engage and secure visibility with the 3.4 billion app users worldwide. With lower costs and barriers to entry, both fledgling and established app developers can find success. For example, educational app company L’Escapadou secured 1.3 million downloads and earned more than $1.5 million from app sales between 2010 and 2014, a success attributed to the centralized nature of platforms.”
Joe Kennedy, Senior Fellow, Information Technology & Innovation Foundation: “These platforms often offer a variety of other services, such as handling the payments, shipping, handling returns — thus saving the small business from having to do that itself. Gig platforms match small businessmen and women with potential customers that are interested in their services, thus allowing them to build a clientele without spending more money on print advertising, radio, or mail inserts.”
Excessive regulatory action against leading tech services could be detrimental for the small business owner.
Joe Kennedy, Senior Fellow, Information Technology & Innovation Foundation: “We should not enact new, restrictive laws or engage in new antitrust practices simply to rein in some of America’s most productive companies. Nor should we try the Herculean task of trying to break them up. Both would come with the consequence of less innovation, productivity, and consumer welfare.”
Kennedy continued: “In competitive markets, the lion’s share of the benefit from efficiency is passed on to consumers. The effect of enhanced competition can reduce the market share of smaller, less efficient rivals. Where this displacement is the effect of legitimate competition, public policy should encourage it, or at minimum not hinder it.”
Jake Ward, President of Connected Commerce Council: “We cannot afford to lose the forest through the trees, focusing our attention on only the largest and more prominent companies and issues. Rather, we should try to take the perspective of a small business, seeing the full landscape as we consider who will ultimately pay the price if business models are dramatically changed, costly regulations are enacted, or access to essential tools is limited.”