The Engine of American Small Business

To the American innovation ecosystem, and the American innovation economy, small business is anything but small.

Small businesses employ over 47 percent of the private-sector workforce and create 64% of new jobs. They generate 46% of private-sector output and account for 98% of all identified exporters. In short, they’re an engine of growth unmatched by any other facet of American industry.

Like any engine, the small business sector requires premium fuel and routine maintenance in order to perform. Part of that fuel and maintenance model: strong intellectual property protections and enforcement against the infringement of those protections.

Small business owners rely on robust intellectual property infrastructure – sound policy and enforcement techniques to protect intellectual property – for stability and confidence in their business ventures. Intellectual property protections guarantee: the time, money, and effort you spend inventing has value and that value will be honored when your invention hits the market.

And so the innovation lifecycle keeps spinning. Intellectual property protections provide an incentive, a promised reward for new ideas that power new products and new services. Existing small businesses thrive and new ones emerge.

As Steve Jobs said, without intellectual property protections, “creative companies will disappear or never get started.”

But intellectual property protections alone aren’t enough. Enforcement against the infringement of intellectual property protections completes the puzzle.

Jobs goes on: “If people copied or stole our software, we’d be out of business.”

Too often, American small businesses find their ideas stolen; bad actors infringe their copyrights, patents, and trademarks. In fact, U.S. brands and patents are more likely to be infringed than those of any other nation, making up as much as 20% of all goods seized in the global counterfeit trade. Counterfeiting and piracy alone cost the U.S. as much as 750,000 jobs and $250 billion in revenue each year.

To small business owners, these numbers become much more personal.

Pirates share unlicensed copies of films and songs, their original creators seeing no revenue for millions of illegal downloads. Products that nearly exactly resemble original patented designs find their way onto online retail platforms. Criminals peddle counterfeit goods – from shoes, watches, and handbags to baby formula, laundry detergent, and prescription medicines – and cash in on the goodwill inherent in our favorite brand names.

Small businesses simply can’t compete with infringement – with free and cheap (although inferior) versions of their product or service.

But considering customs officials are only seizing 2.5% of all counterfeit and pirated goods, competition between small business and illicit infringers is a bleak reality.

This week is National Small Business week: small businesses across the country will enjoy recognition of their critical contributions to our global community. As we commend the small business community’s work this week, let’s also commit to some work of our own.

Congress must create, update, and enforce strong laws to protect IP in the U.S. and abroad. Congress must stand up for small business.

Courtney Paul is the associate manager of communications for the U.S. Chamber of Commerce Global Intellectual Property Center.

Subscribe for updates from GIPC