To Keep America Safe, Policymakers Must Empower Small Businesses Through Innovation

Today, the House Committee on Small Business is holding a hearing titled “Restoring America’s Industrial Base: The Role of Small Businesses in National Security.” It’s increasingly clear that America’s national security is not determined solely by aircraft carriers, fighter jets (especially $2 trillion ones), or missile defense systems. It also depends on the strength and resilience of its supply chains, and the ability of entrepreneurs and small businesses to innovate, grow, and compete. Without thousands of smaller suppliers, manufacturers, technology firms, logistics providers, and distributors—and platforms such as Amazon Business to get their goods and services out into the world—the U.S. simply would not be able to handle an array of emerging security threats. Policymakers must recognize the importance of these digital marketplaces and avoid heavy-handed rules that would keep them from serving consumers, taxpayers, and small businesses.

Every day, the Pentagon relies on digital marketplaces such as Amazon Business to procure essential supplies. As Mark Fox, former Director of Federal Sales at Amazon Business, notes, “Today, down at the squadron level, they have challenges leveraging traditional prime contract mechanisms in getting [general use consumables such as wooden tongue depressors, epoxies, and sandpaper] fast enough at a price that is realistic, so that planes are not sitting there waiting on $20 worth of commercial items to be fully mission capable.” Digital platforms allow agency purchasers to quickly filter and set preferences—in line with federal requirements—and get products far more quickly than conventional alternatives.

These digital marketplaces not only make federal procurement faster and more cost-effective; they have become one of the most important facilitators of small-business growth in the United States. More than 60 percent of sales in Amazon’s store now come from independent sellers, the vast majority of which are small and medium-sized businesses. In 2025 alone, more than 75,000 independent sellers surpassed $1 million in annual sales, while U.S.-based sellers averaged more than $375,000 in annual sales. Independent sellers also support more than two million American jobs.

These figures are significant not merely because they reflect commercial success, but because they demonstrate how modern digital platforms lower barriers to entry for entrepreneurs. Historically, a small manufacturer seeking national distribution faced enormous hurdles, including warehouse costs, logistics challenges, marketing expenses, and limited access to customers. Today, a small business can leverage Amazon’s marketplace, fulfillment network, and digital tools to compete with much larger firms. This democratization of commerce strengthens economic resilience by creating a broader and more diverse industrial base.

The national-security implications are substantial. A healthy—and taxpayer-friendly—procurement ecosystem requires more than a handful of dominant suppliers. It requires a wide array of firms capable of scaling production, adapting to emergencies, and supplying both commercial and government customers. Many small businesses that sell products through digital marketplaces also manufacture tools, electronics, safety equipment, industrial supplies, and other products that can ultimately support government agencies, first responders, and defense-related activities. By helping these firms thrive, innovative platforms help preserve productive capacity that will almost certainly prove critical during times of crisis.

America’s dynamic economy rests on its ability to harness innovation. Ranging from smartphones to pharmaceuticals to advanced plastics recycling, the U.S. is responsible for virtually all the world’s technological breakthroughs. Getting these technologies to consumers and government agencies takes digital marketplaces that facilitate the free flow of information and offer flexibility on delivery and payment terms. Companies such as Amazon have been instrumental in creating these platforms—and consumers and taxpayers have benefitted tremendously. Instead of demonizing “big business,” policymakers should recognize the innovators that empower small businesses.