Regulations, Digitization, and Networks

Thursday, September 8, 2022, by Dr. Winslow Sargeant, Chair, ICSB

Small businesses in the age of COVID-19 continue to have concerns as many re-open for the first time after many years of disruptions.   The normal business cycle has been far from the norm, and many things remain a concern as business owners seek to operate in this new order.   Three (3) in particular are on the top of mind for many businesses.  These include regulations, digitization, and access to networks.   


Regulations are not only a concern for large businesses but equally on the top of mind for small businesses who must keep up with the number of rules and regulations that have been relaxed during COVID-19 or have been strengthened to lessen the effect of the pandemic on society.   With the relaxation of rules, tax benefits, for example, allowed consumers to expense all of their entertainment and dining at restaurants.  This was a tremendous benefit that encouraged more spending in the economy.  Many small businesses saw their revenues increase.  The question, however, going forward is to understand if this tax break will continue to be in effect or if restrictions will be re-imposed.  Small businesses operate best when the rules are clear, transparent, and predictable because a small business owner will not have time to monitor the ever-changing rules that may come from the government. It is therefore recommended that small businesses work with their industry associations to hear what rules and regulations are being considered that could affect the operation of their business. 


Digitization and the ubiquitous nature of technology have accelerated since 2020.  The use of touchless payment technologies, cash apps, and many other non-cash transactions continues to increase.  The challenge for merchants is to tap into their digital portals that will allow for safe and secure transactions for their clients and customers and enable the experience to be frustration-free.  Using digital tools requires a “wireless” connection.   In some of our urban and rural areas, access to the internet or wireless access points can be intermittent and occur at the worst time.   Some small business merchants, who are mobile, have decided to set up shop nearby mobile “hot-spots” or similar areas where access to a mobile tower (for wireless access) will give the maximum bandwidth possible.  Small businesses are concerned with this connectivity requirement because of the overall cost borne by the merchant.    It is important that digital access be seen no longer as a nice to have but as a utility like water and electricity.  Governments should make it policy that favors reliable broadband and wireless access to those who are categorized as micro-, small and medium-sized enterprises (MSMEs), in particular, those in the rural areas and are led by women and youth. 


Networks are “a group or system of interconnected people or things.”   This definition looks benign but is particularly powerful when you are included with those who are the power brokers and leaders within a particular industry.  One of the most complex challenges for small businesses, especially those led by women and minorities, is the barrier of access to networks.  There is a truth that many of us do business with people we know and like.   The converse is true: we don’t do business with those we don’t know or like.   With networks, it is hard to like someone you don’t know.  In business, structuring partnership agreements, favorable procurement opportunities, or access to bank credit begins (and ends) with a favorable reaction from someone in your network.   This could be your individual connections, those from your advisory boards, and possibly, a customer.   One way to lessen the barrier of access to networks is to have someone in these networks actively invite others to their meetings and other gathering events. Small business owners just want to have a seat at the table rather than just being an “appetizer” on the menu.  Let’s recognize that established networks need to bring in new leaders from underrepresented groups that will keep their events relevant to society at large and make for a fairer playing field for small business merchants.  

Regulations, Digitization, and Networks can become strengths for small businesses and not just impediments.=.  Understanding how rules affect your industry and how to be up to date with newer technologies while expanding one’s network are challenges that small business owners face and are being removed in the push for inclusion and sustainable small business growth.  

Article by:
Winslow Sargeant
Chair, ICSB