Barriers Hindering 'Tremendous' Growth Opportunity for Small Business Exporters, Study Says

While small businesses face several common export obstacles -- including foreign regulations and complex customs procedures -- there is “tremendous opportunity” for export growth, according to a study released Oct. 30 by the U.S. Chamber of Commerce and Google.

The study, which surveyed more than 3,800 non-farm small businesses, explores the state of trade for small business exporters and recommends several policy efforts to boost export growth. The U.S. should collaborate with state governments, private industry and other stakeholders to help small businesses use technology for exporting, encourage technology providers to distribute digital tools to reduce barriers for small business exports, prioritize negotiations of trade deals that open markets for small businesses, and ensure the availability of trade finance opportunities.

The study said the “vast majority of small businesses do not export” partly due to trade barriers that disproportionately impact small companies. The most pressing obstacles include the tax challenges and unclear privacy rules and liability risks of foreign regulations, a lack of resources to enforce contracts and resolve disputes, complicated tariffs and customs procedures, and a lack of knowledge on how to find new customers in foreign markets.

Communication and language barriers were the top concern among small exporters grouped as “goods producers,” the study said, while tariffs and customs procedures ranked as the most difficult barrier for service providers. The lowest ranked barriers to exports for survey participants were production and trade-related logistical issues and product development and support, such as challenges that arise when trying to adapt products to standards of foreign markets.

Reduced barriers for small business exports will lead to “more economic growth,” the study said, and technology may be the best way to reduce the barriers. “Many of the barriers that impede small business exports can be reduced and mitigated through digital tools,” the study said. “However, many U.S. small businesses are unaware of these tools, and in other cases, these tools are not optimized for small businesses.”