Author Archives: Karan Bhatia

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.