Small business exports currently account for $541 billion and nearly six million jobs in the United States. However, small businesses face several barriers to exporting, primarily foreign regulations, tariffs and customs procedures, and payment collection issues. 73% of small businesses are not aware of digital resources that can help them reach customers around the world. If small businesses had better access to global markets, it could increase the GDP of the United States by $81 billion and add 900,000 new jobs. The report surveyed over 3,800 small businesses across the United States and examined the landscape of small business exporting. In addition, the report provides policymakers with several recommendations to enhance small business exporting and grow the American economy and increase jobs.
Key Findings
Small business exports contribute significantly to the US economy; exports generated $541 billion in output in 2017 and supported more than 6 million jobs. Small businesses say that if they had better access to export markets, their export sales would increase by over 14% during the next three years, which would increase economic output by $81 billion and add 900,000 jobs.
92% of small businesses that export use digital tools such as online payment processing tools, online productivity tools, e-commerce websites, online marketing and other tools. However, only 17% of non exporting small businesses report that they have excellent or good access to technology to solve problems related to exporting and 73% are not familiar with digital tools that would help them tap into foreign markets.
66% of small business owners believe technology can help to overcome the top three barriers to exporting, including tools to help with finance and payment collection, communications challenges, tariffs and customs issues.
Recommendations
Develop a collaborative initiative between the federal government, state governments, the private sector and other stakeholders to assist U.S. small businesses to use technology for exporting.
Building on best practices from the private sector, and drawing on existing governmental efforts to modernize export promotion tools, this initiative would help small businesses increase their digital skills while raising awareness of digital tools that address barriers to small business exports. As part of this initiative, federal agencies including the Small Business Administration , the International Trade Administration, the U.S. Trade and Development Agency, the Export-Import Bank, and the State Department — in collaboration with governors’ offices and state export agencies — should leverage their expertise and resources to ensure that every U.S. small business has access to the latest exporting technologies and is educated on how to use these digital tools.
Encourage innovators and technology providers to develop and distribute digital tools that address barriers impacting U.S. small business exporters.
Only 17% of non-exporting small businesses believe they have excellent or good access to technology to solve exporting challenges, and 73% of those small businesses are not familiar with digital tools that could help address export barriers. By taking aggressive steps to improve small businesses’ awareness of export-enabling technologies — and by optimizing these technologies for the particular needs of U.S. small businesses — larger businesses and technology companies can help ensure that American small businesses are in the best position to export.
Develop data-driven strategies to understand and overcome exporting barriers faced by U.S. small businesses.
This report presents findings from a survey of over 3,800 American small businesses. However, further research should be conducted to assess the specific export-related challenges and opportunities facing U.S. small businesses in different sectors and different regions. It is also important to increase government data that provides a real-time analysis of U.S. small business export performance, including the products and services being exported, to better understand which types of small business exporters are succeeding and which are in need of greater support.
