Author Archives: Karan Bhatia

Strengthening the transatlantic digital space

This week, European and US leaders will convene the first meetings of the Trade and Technology Council (TTC) with the goal of renewing a transatlantic dialogue on critical global challenges and strengthening technological cooperation. As I recently wrote, we strongly support the goals of the Council and believe closer cooperation on digital, trade and economic policy will help achieve shared goals – overcoming the pandemic, achieving an equitable economic recovery, promoting the responsible use of technology, and advancing democratic norms.

The TTC has a wide-ranging agenda, with ten working groups covering a broad array of topics. While it is encouraging that both sides have agreed that all issues should be on the table, the long-term success of the forum will depend on the parties focusing and making progress on the most critical ones. To that end, here are a few that we think merit serious attention:

  • Transatlantic regulatory principles:The digital economy and the millions of jobs it supports on both sides of the Atlantic require meaningful consultation between EU and US decision makers based on shared regulatory principles. While policymakers on both sides are rightly debating new rules around technology in areas like AI, it is essential that these and other new policies governing digital markets and services are interoperable and focused on helping and protecting consumers – adhering to principles of consistent treatment, robust due process protections, and safeguards for user privacy and intellectual property.
  • Secure transatlantic cyberspace:Internet infrastructure on both sides of the Atlantic and globally is increasingly under threat as cyberattacks continue to exploit vulnerabilities targeting people, organizations, and governments. Greater coordination between European and US cybersecurity work, including building shared standards, is critical to enhanced effectiveness. We’re committed to supporting this initiative, including by partnering with government, industry and academia, and we recently pledged to invest $10 billion over the next five years to strengthen cybersecurity around the world.
  • Legal certainty on data flows: In the digital world, where every email and video conference involves the transfer of data, businesses on both sides of the Atlantic need legal certainty that such data flows can continue, subject to agreed protection of consumer privacy. The EU and US urgently need a reliable, long-term agreement on transatlantic data flows. Resolving this issue with a new Privacy Shield will enable Europe and the US to drive trust with allies and globally.  
  • Responsible use of technology:Artificial intelligence and emerging technologies are increasingly critical to the transatlantic economy and to tackling common challenges like climate change. During the pandemic, AI has been used to boost knowledge sharing, enable better prediction of health trends, and support research to develop vaccines and treatments for serious disease. But these same technologies also present new challenges and risks, as well as potential regulatory conflicts. Under the TTC, the EU and US have an opportunity to establish a common approach to AI policy and research that enables responsible AI innovation and adoption around the world. The business community has an important role to play here, which is why we created a set of AI principles that govern our responsible development of this technology and are sharing our progress in implementation.
  • Trade and technology for everyone: All too often, small businesses and workers have been an afterthought when it comes to the international trading system and the technology agenda. A smart approach to trade policy and innovation can bring them back in – and create new opportunities for workers and small businesses on both sides of the Atlantic. The EU and the US should identify access barriers, find new ways to ensure that workers get digital skills, and put digital tools and exporting technologies in the hands of small businesses. At Google, we have launched an updated version of our Market Finder tool, which enables small businesses to sell their goods and services to international markets. And we’re partnering with a range of actors – whether through the European Commission’s Pact for Skills or directly with community colleges, non-profits, and workforce boards – to make our job training programs more accessible. So far, these programs have helped over 100,000 people on each side of the Atlantic to secure new jobs.
  • An open internet that respects international human rights:We continue to believe that an open internet – one that respects human rights – benefits everyone. But the open internet is increasingly under threat. According to Freedom House, governments suspended internet access in over 20 countries in 2021 and dozens of countries pursued content rules that would impact freedom of expression. We need democracies – led by Europe and the US – to continue to stand up for internet freedom and human rights in the online space. We are committed to working with governments, multilateral and multi-stakeholder organizations, and other technology companies to advance those values.  

The historic partnership between Europe and the US faces some profound challenges, but, as in the past, we have always found opportunities to build and strengthen our partnership based on shared values and common principles. The launch of the TTC is proof that our shared values are stronger than any individual difference of opinion. We applaud this initiative and stand ready to contribute to its success.  

Google at the UN General Assembly

Next week, leaders from government, civil society and the business community will convene at the United Nations General Assembly (UNGA) to discuss how we can work together to solve the world’s biggest challenges. If the past two years have shown us anything, it’s that tackling global problems like pandemics, economic inequality and climate change demand global collaboration, across borders and across sectors. At Google, we’re committed to doing our part.

Earlier this year, I wrote about how we are accelerating our partnerships with international organizations in a number of areas. For example, since the start of the pandemic, we've launched more than 200 new products, provided over $150 million to public health officials to promote vaccine education, and enhanced existing products like Google Search and Maps to highlight authoritative information about COVID-19 and local vaccination sites. We’ve also continued to increase our support for the UN by providing over $250 million in Ad Grants, which has enabled it to serve over 1.6 billion ads and reach people in more than 200 countries with messages about COVID-19 prevention, vaccine safety and more. 

At UNGA this year, we will be deepening our collaboration with international organizations as we add our voice to critical policy discussions, share what we have learned from our partnerships, and seek out new ways to collaborate with multi-stakeholder groups.

Here are just a few events at which we’ll be participating next week around key issues.

Economic Recovery 

While the pandemic has exacerbated economic inequality around the world, the data shows that nations that adopt technology are poised to recover quicker. According to recent research, 16 emerging countries could generate as much as $3.4 trillion of economic value through digital transformation by 2030. 

On September 20, Google SVP of Global Affairs Kent Walker will join the Concordia Summit to discuss a new Future Readiness Index commissioned by Google and developed by the Portulans Institute. This interactive tool is designed to help governments use key metrics and data to make sound investments in technology, infrastructure and talent.

Later next week, Kent and I will join the Leaders on Purpose Summit for conversations about how the private sector and governments can work together to help more people prepare for jobs, and how sound digital policies can help governments drive economic opportunity and growth.

Sustainability and Climate Action

Technology has an important role to play in tackling climate change, and we’ve long been committed to advancing the UN’s Sustainable Development Goals and collaborating with UN entities like the Framework Convention on Climate Change to drive progress. We were the first major company to be carbon neutral and match 100% of our annual electricity use with renewables, and now we’re working to be the first major company to operate on 24/7 carbon-free energy by 2030.

On September 24 at theUN High Level Dialogue on Energy, our CFO Ruth Porat will call on other companies and governments to join the Sustainable Energy for All-Google 24/7 Carbon Free Energy Compact. Ruth will also speak at the kickoff of Climate Week on September 20 to discuss how we are working to achieve sustainability at scale and fulfill our commitment to offer 1 billion people new ways to live more sustainably by 2022 via our core products.

Music and Culture

In celebration of Beethoven’s 250th birthday, Google Arts & Culture and YouTube collaborated with other worldwide partners on the Global Ode To Joy project. Through this initiative, which is a fitting contribution to the UN’s International Year of the Creative Economy for Sustainable Development, thousands of users, top-tier artists, and orchestras from more than 70 countries came together to create and share videos of Beethoven’s music. On September 22, Kent will host a panel during the Concordia Summit with participants from the Ode to Joy campaign to discuss how music is bringing people together during the pandemic.

To be sure, with many events this year again virtual, UNGA 2021 will be a little different from years past. But the opportunities it presents for engagement with partners from around the world remain rich, and the need for collaboration substantial. Whether in person or over a screen, Google is “all in” when it comes to supporting the UN’s vision of multilateral and multi-stakeholder approaches to confronting the world’s biggest challenges. 

Technology can strengthen the U.S.-Korea alliance

Tomorrow, President Biden will hold his first bilateral summit with South Korean President Moon Jae-in in Washington, DC. The visit comes nearly 15 years after the United States-Korea Free Trade Agreement (KORUS) was signed, creating a historic economic and strategic partnership between our nations.

As a former trade negotiator for the U.S. government, I helped negotiate this agreement to further the United States’ and Korea’s shared goal of lowering trade barriers and strengthening our economic cooperation. In the years since KORUS was signed, I’m proud to see how much the U.S-Korea economic relationship has matured. Bilateral trade in goods and services has increased from $104 billion in 2007 to nearly $170 billion in 2019. U.S. exports to Korea today support an estimated 358,000 jobs. And KORUS has shown that government leadership can spur private sector collaboration, unlocking new opportunities for cooperation across the Pacific and benefiting consumers. 

Google’s experiences offer a great case in point. Over the past decade, we have partnered with great Korean companies to bring better products to consumers in Korea, the U.S. and the world. For example, we have closely collaborated with companies like Samsung and LG to expand access to innovative smartphones and devices for everyone. That, in turn, has nurtured a digital economy where developers are able to distribute their apps to global markets and grow their businesses. Just this week, we announced our newest initiative: Google and Samsung are unifying our wearable device operating systems, which will provide consumers with powerful health information and the ability to communicate on the go, while creating new opportunities for developers and device makers. We’ve similarly had great partnerships with other Korean technology leaders like SK, Hyundai Motor, Kakao, NCSoft, Nexon and NetMarble.

Today, the U.S. and Korea are at an important inflection point in our economic alliance, as our nations recover from the effects of COVID-19. We can reenergize our bilateral relationship by partnering even more closely on technology. The U.S. and Korea are among the world’s leaders in technology — in everything from smartphones and software to apps and artificial intelligence. These complementary strengths present an enormous opportunity for deeper collaboration. 

There is, however, still a great deal of work ahead to realize that opportunity. There remain a number of areas where collaboration would be strengthened by better alignment on technology and digital regulation and policy. As we have seen globally in recent years, unilateral attempts to regulate the digital economy deter trade and create obstacles for greater investment. Inconsistent regulations make it harder for companies to work together, increase costs for consumers, and risk fragmenting the global, open internet that both countries rely on.

That’s why we believe Presidents Biden and Moon should launch a high-level dialogue on technology issues. Such a dialogue would elevate the importance of technology cooperation, enhance supply chain resiliency and promote common rules of the road for the digital space that will preserve an open, free and secure global internet. This dialogue would also help the two countries jointly address challenges in the technology space that risk deterring trade in our sector and beyond.

An enhanced technology relationship would serve the two countries’ economic interests, including the thousands of American and Korean small and medium-sized businesses that rely on digital tools to reach customers and stay connected. And it's not just our economies that would benefit. Increasingly, technology cooperation is also at the core of our security alliance. A common approach to digital standards and mutual commitment to transparent, non-discriminatory, and interoperable regulatory frameworks would reinforce that alliance, while also enabling digital cooperation across the Indo-Pacific region and beyond. 

The U.S.-Korea alliance has endured because of our shared values and belief that we are best positioned to tackle future challenges working in partnership. Technology represents the future of both our economies. By putting digital cooperation high on the bilateral agenda and launching a technology dialogue, the U.S. and Korea can give new momentum to our economic and strategic alliance, propelling it for the next 15 years. 

Google’s partnerships with international organizations

Whether it’s a pandemic, climate change, or the health of the global economy, many of the problems of our era can only be effectively addressed by collaboration across borders. In an interconnected world, such collaboration depends on international organizations that bring together governments, the private sector and civil society. And we think technology can help.

We’ve recently seen how technology-enabled solutions like smartphone-based exposure notifications can support public health authorities in the fight against COVID-19, machine-learning models can reduce energy consumption, and AI can address cybersecurity challenges posed by hackers and spam.  We at Google are proud to be investing billions in R&D each year to innovate new technologies to help address the world’s biggest cross-border problems.

To be sure, our relationship with international institutions is a two-way street. Our development of new technologies is guided by multilateral frameworks like the United Nations (UN) Roadmap for Digital Cooperation, the UN Sustainable Development Goals and the UN Guiding Principles on Business and Human Rights. More broadly, we, like every company, benefit from the good work done by institutions ranging from the World Health Organization (WHO) to the World Bank in securing public health, strengthening the global economy and resolving conflict. And we value international organizations' ability to shape global agendas and drive multi-stakeholder consensus — like how the OECD is working to reform global tax regimes or the World Trade Organization is working to promote a framework for digital trade.

This year, Google’s plan is to accelerate our partnerships with international organizations on four fronts.

1. Slowing the pandemic and supporting economic recovery.At the beginning of the pandemic, we wanted to help people find answers by surfacing critical information and leading global initiatives like “Do the Five” and “Wear a Mask.” For the first time, we partnered with the WHO to run public service health announcements through Google Search and YouTube. This partnershiphas led to campaigns in more than 100 countries and has driven over 1 billion ads served (impressions, or views) and 115 million clicks to the WHO website, educating users about the disease and fighting the infodemic. In recent months, we’ve turned our focus to helping millions of people around the world acquire the necessary skills to participate in the post-pandemic digital economy, and we’ll continue to support digital transformation of economies and communities to ensure that we step back into a stronger, resilient and more inclusive world.

2. Artificial intelligence and innovation.Building off our longstanding support for the UN Sustainable Development Goals (SDGs), we will continue to work with UN agencies to develop AI in a way that meaningfully improves people’s lives. For example, we’ve partnered with the UN World Food Programme to develop an AI-enabled tool to improve the delivery of disaster aid, and with UN-ESCAP and the Association of Pacific Rim Universities to launch an AI for Social Good report. We believe AI can be a transformational tool to support the goals of multilateral institutions.

3. Sustainability.Sustainability has been a core Google value since our founding. Now in our third decade of climate action, we’re working to help fulfill the vision of the UN SDGs and the Paris Agreement, becoming the largest annual corporate purchaser of renewable energy andcommitting to operate 24/7 on carbon-free energy by 2030. But we are also taking action far beyond our own operations, working with international organizations like the UN Framework Convention on Climate Change (UNFCCC) to create tools like the Environmental Insights Explorer and our breakthrough AI for building energy efficiency that help everyone move towards a carbon-free world.

4. Open internet and human rights. The advent of the internet a generation ago fast-tracked human rights around the world in a way history had never seen. Google's commitment to human rights, including to the UN Guiding Principles on Business and Human Rights, dates back to our earliest years. Cognizant of the alarming realities behind the gendered impact of the pandemic, we have had a particular focus on gender equality. That's why Google joined the Generation Equality Forum as a member of the Action Coalition for Technology and Innovation for Gender Equality; our Ad Grants partnership with UN Women has already enabled over seven million public service announcements in over 237 countries, raising awareness of the outsized impact of COVID-19 on women and girls. This year we also launched the Impact Challenge for Women and Girls, a first-of-its-kind program to empower women and girls to reach their full economic potential.

While we accelerate our work in these four areas, Google is committed to supporting international organizations to tackle the next generation of cross-border challenges that lay over the horizon. In an era of growing skepticism of government institutions, that starts by rebuilding trust and consensus in the value of working globally to solve problems.

As a technology company inspired by the power of human resilience, we can think of no better way to honor the setbacks, sacrifices and hardships of a battle-wearied world than to work with organizations committed to helping everyone — and doing our part by building the tools and technologies to make their vision possible.

The U.S. and Europe should launch a trade and technology council

Two decades ago, countries saw global trade in technology goods and services as an on-ramp to the economy of the 21st century. International agreements to eliminate barriers to trade in technology goods and services helped enable dramatic increases in technology trade, while countries looked to promote foreign investment in the cutting-edge technologies of the future.  Consumers everywhere got access to new, lower-priced technology, millions of jobs were created and businesses from Paris to Pittsburgh have been able to reach new customers around the world, generating trillions of dollars in sales.

Times have changed: We’re all using digital tools, and recognizing the risks of abuse and the need for responsible innovation. But while well-crafted regulation can help unlock the benefits of technology, an explosion in national policies is detering trade in technology. Those barriers include not just tariffs (which have also beset other sectors), but also trade controls, discriminatory taxes, investment restrictions and novel digital regulations aimed straight at foreign-headquartered companies. In short, we’re seeing the erosion of a carefully nurtured global trading system that has contributed to progress and prosperity in the U.S. and around the world.  

This erosion of trade norms isn’t limited to the U.S.-China relationship. Even more concerningly, the technology trade relationship between the U.S. and Europe — once one of the closest in the world — is fraying.  

In Washington, in recent years, “transatlantic tech policy” has been largely reduced to pressing Europe to follow U.S. supply chain initiatives. Meanwhile Europe has undertaken a broad series of unilateral initiatives in areas ranging from digital taxes to market regulation. Transatlantic coordination has largely become an afterthought, if it’s thought of at all. 

These policy trends hurt both the U.S. and European economies, risking the 16 million jobs on both sides of the Atlantic linked to transatlantic trade and investment. They also make it harder for the U.S. and the EU to address new global technology challenges and partner with emerging economies in Asia.

But there’s a better path forward. Coming out of the pandemic, with new momentum behind bilateral cooperation, we have a chance to revitalize the transatlantic technology trade relationship.

The European Commission recently proposed an EU-US Trade and Technology Council (TTC).  The United States should accept the invitation — and build on it. An expedited high-level trade dialogue on technology issues is critical to avoid unilateral approaches on pressing issues like data flows that are essential to commerce, regulation of digital platforms that we all use every day, and other essential components of a modern economy. A TTC could also prevent divergence on emerging areas like artificial intelligence and other advanced technologies and promote cooperation on third-country technology challenges. 

Of course a TTC needs to be set up for success. When entering trade negotiations, each side typically avoids preemptive or unilateral actions that might foreclose meaningful alignment. In entering a TTC, both sides should commit to meaningful consultation before taking any further actions harming transatlantic tech trade. The U.S. should not enact new privacy or technology trade control regulations without consulting with the EU; the EU should pursue bilateral consultation to ensure technology initiatives like the Digital Markets Act reflect the EU-U.S. values-based alliance. Quickly forming a TTC can help drive a consistent and non-discriminatory approach on these challenging new areas of technology regulation.

The need for alignment has never been greater or more urgent. An aligned approach will promote more tech-enabled economic growth; tech-supported measures to tackle other shared challenges like climate change; and new norms to ensure that technology will — in the words of  U.S. Secretary of State Antony Blinken — “protect your privacy, make the world safer and healthier, and make democracies more resilient.” 

The historic partnership between Europe and the U.S. faces a profound challenge — but also an opportunity to re-build based on shared values of openness and connectivity. As European Commission Executive Vice-President Dombrovskis said recently: “The bottom line is simple: whatever challenges the EU and U.S. face, there is no stronger values-based alliance in the world … So, even if the current crisis feeds the temptation to look inward, this is not the answer.” We couldn’t agree more.

Let’s finalize an international tax deal

For several years, governments around the world have been meeting at the OECD to reform the international corporate tax system. Not surprisingly, success hasn’t come quickly. This isn’t an easy task – but it remains a critical one. As the world economy seeks to recover from the global pandemic and governments face new fiscal pressures, an agreed solution is needed now more than ever to ensure a durable framework for cross-border trade and investment.

Tomorrow’s meeting of G20 finance ministers represents an important opportunity to give this process new momentum. For the new Biden Administration, the meeting represents a chance to underscore its commitment to the OECD-led multilateral process and to fair, comprehensive, and coordinated changes to corporate tax policies. And it represents an equally important opportunity for finance ministers from France, the UK, India, Indonesia, and other leading economies to commit to end the headlong rush to discriminatory tax measures that we’ve seen in recent years and work with the U.S. on a durable agreement.

The central question is less about how much corporate income tax companies pay than where they pay it. For Google’s part, our effective tax rate over the past decade has exceeded 20% of our profits, in line with average statutory tax rates. While we’re one of the largest corporate taxpayers in the world, roughly 80% of our corporate income tax has been due in the United States, where Google was founded and where most of our products are developed. The concentration of our tax obligations in our home market mirrors many other multinational companies spanning various industries and countries; foreign firms operating in the U.S. and other countries, for example, also pay the majority of their corporate income taxes in their home countries.

These tax practices are the product of international rules – specifically, international tax treaties that historically have attributed a smaller share of profits to the countries where products and services are consumed, leaving the bulk of taxing rights to the countries where products and services are created.

We have long supported efforts to update international tax rules to arrive at a system where more taxing rights are shifted to countries where products and services are consumed. So, U.S. exports, including a range of technologies, might incur more income tax abroad, while foreign companies exporting to the U.S. would pay more to the U.S. public purse. Like any good agreement, this will require a healthy amount of give-and-take.

Unfortunately, in the absence of multilateral consensus, the world has seen the growth in recent years of taxes targeted at foreign companies. Most prominently, we have seen the growth of so-called “digital services taxes” that aim to raise revenue from a small subset of firms, narrowly defined by revenue thresholds and business models. This selective approach has sparked tensions between the U.S. and some of its allies, pushing countries toward trade disputes that could further damage fragile economies.

Some of the countries imposing these targeted taxes claim they help build momentum for broader international tax reform. But these digital services taxes are complicating efforts to reach a balanced agreement that works for all countries – they’re simply laying claim to income that would otherwise be taxed in the U.S. We encourage these governments to roll back what are essentially tariffs or, at a minimum, suspend them while negotiations continue.

The next few months will test commitments countries have made to reinvigorate international cooperation. Left on the current trajectory, tax discord could quickly yield beggar-thy-neighbor protectionism that would weaken cooperation on many issues. But serious steps forward – starting with the rescission or suspension of existing unilateral taxes – could create new momentum for multilateralism, supporting collaboration on many other important fronts. We urge countries to work together on this critical project, building a firmer foundation for international cooperation in the 21st Century.

The Digital Services Act must not harm Europe’s economic recovery

In this extraordinary year, people and businesses are asking more, not less, from technology and technology companies. For many of us, and for many businesses, digital tools have been a lifeline during lockdown, helping us work, shop, find customers, connect with loved ones and get the latest public health information.

Helpful digital tools that serve millions of people don’t happen by accident—they need investment and rules that encourage that investment and innovation.  Twenty years ago, the European Union created a regulatory environment to do just that. Now it's overhauling those rules, with a comprehensive reform called the Digital Services Act (DSA).  We fully support updating the rules, and think it’s more important than ever that this regulation delivers for European consumers and businesses. 

But a significant part of this reform will impact how digital tools can be built in the future, and by whom. That’s why, earlier this year, we shared our ideas with the European Commission, suggesting ways that existing legislation could be improved and warning of the risks if new rules are poorly designed.

Through the pandemic, people’s use of technology has jumped forward five years, with a 60 percent increase in internet usage. Searches for online shopping and how-to-buy online grew by 200 percent worldwide. Demand for the free digital skills courses that Google offers has increased by 300 percent. And many businesses—like restaurants, fashion designers, retailers and even hairdressers—have embraced digital to survive during painful lockdowns and restrictions. 

Now, just as in every economic downturn of the last 20 years, digital tools will be a vital catalyst for the economic recovery that must come after COVID-19. In rewriting the rules that govern the internet in Europe, the EU has an opportunity to rebuild the foundations so that everybody can thrive online and consumers can benefit from wide choice and lower prices. 

Yet reports suggest that some of the proposals being considered would do the opposite.  They would prevent global technology companies like Google from building innovative digital tools like the ones that people have used through lockdown—and that will help European businesses rebuild their operations. That would be a missed opportunity for Europe as it looks to the post-Covid future.

The DSA will not only affect a handful of global companies, but will also have broader impacts - including on the livelihoods of small business owners across Europe, who use digital services like ours to communicate with their customers, sell their products and services and fuel their growth. 

To take just one example, if you use Google Search to look for  “Thai food nearby,” —Google Maps shows you where the nearest restaurant is located and provides its contact details. And other links let you book a table directly (if local health restrictions allow) or see if you can pick up your meal to take away. 

The DSA could prevent Google from developing such user-centric features. That would clearly have an impact not just on how people use our services, but also on the thousands of restaurants which welcomed millions of diners in Europe using this free feature this year. 

At Google, we put innovation and continuous improvement at the heart of everything we do.  While we support the ambition of the DSA to create clear rules for the next 20 years that support economic growth, we worry that the new rules may instead slow economic recovery. We will advocate strongly for policies that will help ensure innovation and digital tools are at the heart of Europe's recovery and future success.  

Over the past few months, we’ve seen the power of technology as a tool to bring people together, keep them safe and help them get through difficult times. Now, more than ever, we need to focus not on how to limit innovation by a few companies, but on how the full range of digital tools available can contribute to Europe’s recovery and future economic success. The key to that success? Giving people more, not less. 

How we can help more American small businesses export

Technology has made it easier than ever before for small businesses to find new customers abroad. That’s been the experience for Ryan McFarland in South Dakota, who started Strider Bikes in 2007 after inventing a pedal-free bicycle for his young son. He’s since sold more than 2.5 million bikes to customers in 78 countries, and international sales account for over half of the company’s business. Through products and tools like Google Ads, YouTubeand Market Finder, small businesses like Strider Bikes are finding new markets and building relationships with customers around the world.

Still, we know that a majority of small businesses currently do not export their products, and many that do export continue to find it a difficult process. That’s where technology can come in -- helping small businesses access international markets that present great opportunity.

To better understand the opportunities and gaps for small businesses, we commissioned a study from the U.S. Chamber of Commerce and Brunswick Research on small business exports. We wanted to dig deeper into the role small businesses play in U.S. export success, the challenges they face in exporting and the ways new technologies and policy approaches can support them. Their new report, “Growing Small Business Exports: How Technology Strengthens American Trade,” comes out today. 

Researchers surveyed more than 3,800 small businesses across the country to estimate the current and potential impact of small business exports on the U.S. economy. A few highlights: Small business exports support more than six million jobs across all 50 states, and add over $540 billion annually to the American economy. Still, there’s a huge opportunity for more small businesses to sell overseas. If policymakers and the business community can help small companies overcome some of the challenges of exporting—like language barriers, customs issues and payment challenges—we could create nearly 900,000 additional jobs in the U.S. 

Modernizing and updating trade policy is key to unlocking exports for small businesses. But better use of technology also plays a critical role. The survey found that the majority of non-exporting small businesses—more than 70 percent—aren’t familiar with digital tools that could help them reach global customers. Tools like translation services, digital marketing and advertising and online payment platforms can help small businesses reach beyond their local markets. 

Based on these findings, the report offers a few recommendations, including:

    • Develop a collaborative initiative between the federal government, state governments, the private sector and others to train and assist U.S. small businesses in using technology for exporting. This approach would modernize export promotion tools while driving coordination between the numerous federal and state export agencies that have a stake in helping small businesses engage in trade. 
    • Encourage innovators and technology providers to build new digital tools—and broaden awareness of existing tools—that address barriers facing small business exporters. Today, only 20 percent of small businesses use digital tools to export. By increasing awareness of these resources, we can set small businesses up for success.
    • Building on the United States-Mexico-Canada Agreement (USMCA), policymakers should prioritize additional market-opening trade agreements that benefit small business exporters, including through high-standard rules in areas such as digital trade and the removal of non-tariff barriers that disproportionately affect small businesses.

    At Google, small businesses have always been a top priority of ours. (In fact, the first company to sign up for our ads platform was a small business -- a mail-order lobster business from Maine!) By doing our part to lower barriers to exporting, we can help small businesses grow overseas and bring jobs and economic opportunities back to their communities. It’s crucial that policymakers across federal, state and local governments work with large and small businesses to meet this opportunity.