Artificial intelligence (AI) is changing how small businesses compete, and so is the policy debate around data privacy. As small businesses embrace AI in almost every area, they also need to pay attention to evolving data privacy laws and compliance costs. How those issues get resolved in Washington will matter to every small business in the country.
Joining us on this episode of Business Trends Today is Tom Sullivan, Vice President of Small Business Policy at the U.S. Chamber of Commerce. Sullivan says small businesses are ahead of the curve on AI, but policymakers need to keep up when it comes to data privacy.
AI adoption and data privacy concerns
Sullivan says small businesses are quickly adopting AI. The U.S. Chamber’s small business empowerment report shows upwards of 80% of small businesses are already using it in some form.
"AI is a phenomenal tool, that's all it is... It's just one more tool in your toolbox to win that customer over."
But as more businesses integrate AI into their systems, Sullivan says there is growing concern regarding access to customer data.
“Three-quarters of small businesses say that without access to customer data, they suffer as small business owners… Those are all data issues that become increasingly important with the advent of artificial intelligence,” said Sullivan.
Notably, some states are restricting how businesses can use customer data, creating a compliance burden for any business selling across state lines.
The push for the SECURE Act
Congress recently held a hearing on AI and data privacy that put the costs of state-level regulation into focus. Ashley Watts, President and CEO of the Kentucky Chamber of Commerce, testified on behalf of small businesses and made the case for a national data privacy standard. According to Sullivan, her testimony illustrated both the problem and a workable path forward.
Kentucky passed a bipartisan data privacy law, cleared by a supermajority Republican legislature and signed by a Democratic governor. But Watts told Congress that state-by-state solutions fall short of what small businesses actually need.
“A business owner in Bowling Green… has to spend $16,000 to be in compliance with a California law. That’s absolutely crazy,” said Sullivan.
Twelve different state laws now exist, and compliance costs can add up quickly for any business selling in multiple states.
Watts urged Congress to pass the SECURE Act, which would create a national data privacy framework based on Kentucky’s model. Sullivan says dozens of local and state chambers of commerce have written to Congress in support.
"120 local and state chambers of commerce wrote to Congress ... to say, please stop incentivizing states to come up with their own patchwork because it is already too expensive for small business owners to comply."
“It takes the model that Ashley helped create in Kentucky. It makes it a national standard so that people can feel secure with their data,” said Sullivan.
Help for businesses getting started with AI
The U.S. Chamber partnered with Google to offer AI training through its online platform CO, which is currently running a nationwide initiative for small business owners. Sullivan says getting past the fear factor is the first and most important step for owners who have not yet started.
“Embrace artificial intelligence as the next technology that gives you a competitive edge against some of your larger competitors. I think it takes a lot to get past the fear factor of using artificial intelligence. That’s one of the reasons we’re so proud of our partnership with Google to train small businesses on artificial intelligence,” said Sullivan.
AI adoption among small businesses is already strong and growing. With 120 chambers of commerce aligned behind the SECURE Act, Sullivan says the case for a national data privacy standard is only getting stronger.
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