Americans know well the pain caused by two years of economic turmoil. Despite the economic ups and downs of COVID-19, record numbers of people are embracing entrepreneurship.
This surprising market reality provides President Biden and Congress with an opportunity to promote growth in the face of continued uncertainty. Instead, they have used competition and innovation as a cover to penalize the very business practices they claim to promote.
Biden operates on the premise that markets are closed and a few big companies monopolize key sectors. That’s the rationale behind his executive order on competition along with proposed legislation in Congress aimed at “big tech.”
The data behind new business creation tells a different story.
According to the Census Bureau, 5.4 million people filed new business applications in 2021, an increase of 53% over 2019 and the most in any year. These applications are found in all major industries, reflecting a dynamic and competitive environment that presents new opportunities for entrepreneurs.
But the business application is only the first step in starting a business, and only a fraction of those who apply will launch it. That is why it is critical that government policy encourage new business formation, not deter these entrepreneurs through costly regulatory barriers.
Of the 430,411 business applications filed in January 2022, only 7.3% of these businesses are estimated to be formed within one year and 9.4% will be formed within two years, according to the Census Bureau.
A new survey of pandemic start-ups by the SBE Council identified the critical importance of new technologies enabling entrepreneurs to reach new customers. Businesses can easily sell products across multiple online channels—a company website, a marketplace, on social media, and through apps, to name a few—and reach consumers far beyond a physical location. And most consumers have increased their use of digital tools to enhance, not replace, their physical shopping trips. However, this survey also came with a caveat: 61% are concerned that government actions targeting tech companies will reduce their access to consumers, increase their costs and harm their operations.
Two new Deloitte studies found that consumers prefer a mix of options that allows them to seamlessly blend online and offline purchases. One study notes that 55% of respondents who began their most recent shopping journey online ultimately made their purchase in-store.
Also, while the pandemic has sped up digital shopping, in-person shopping isn’t dead. Many consumers prefer to shop in person for most or all of their purchases, and 90% of shoppers who spent the most time researching in-store ended up buying in-store. The study also found that in their recent outlets, 72% of shoppers visited more than one retailer, 42% shopped at two, and 30% shopped at three or more retailers.
Small businesses are also using their physical store to support online sales, with 61% of small businesses offering “buy online, pick up in store” and 50% offering curbside pickup. Additionally, 46% of consumers will pay more to pick up an item at the store within five minutes of their home instead of waiting for delivery in two days.
Congress has failed to grasp the reality that consumers are benefiting from more choice and convenience than ever before. Legislation like the “American Online Choice and Innovation Act” would replace what consumers want and like with what politicians and government regulators think would work best. The bill, for example, proposes different sets of rules for online marketplaces above a certain size compared to brick-and-mortar retailers, even though our strong and dynamic retail industry is largely driven by the mix of technology and digital tools to improve the shopping experience in the store.
The digital tools and platforms used by entrepreneurs have greatly lowered the barriers to entry while increasing access to consumers. Legislators must not only recognize but also promote this exciting retail dynamic on Main Street.
If congressional administration regulators and Biden move forward with punitive and misguided policies targeting “big tech” that actually hurt consumers and business owners, they could dash the dreams of many entrepreneurs who use digital tools to compete effectively. with big players in many industries. sectors
Karen Kerrigan is President and CEO of the Small Business & Entrepreneurship Council. She wrote this for InsideSources.com.