PublishedJanuary 26, 2023

CCIA Research Center, Engine Study Finds Startups Rely on Free and Low-Cost Digital Tools to Compete

Washington – In partnership with Engine, the CCIA Research Center released a new study investigating the role of free and low-cost digital tools and services in the startup ecosystem. The study finds that 100% of surveyed and sampled startups use at least three tools and services made available for free or low cost by larger firms, and suggests that cost-inducing regulations against key contributing firms could cost startups $3,000 per employee per year. CCIA is hosting a virtual event with Engine on Thursday, 1/26 at 1:30pm ET to explore the findings of the study with startup founders and discuss the implications of the research.

According to the research, access to free and low-cost digital tools like Slack, Google Suite, AWS, and GitHub allow new companies to enter the market, compete with incumbents, and bring new innovative goods and services to consumers. The results show that the availability and proliferation of free and low-cost digital tools and services has “reduced the cost of launching a startup by at least three orders of magnitude in just the past two decades”.

Regulations forcing large firms to restructure or discontinue integrated digital services could separate startups from the tools they need to compete, adding a significant barrier to entry for new and emerging businesses and reducing the flow of innovation into markets.

The Computer & Communications Industry Association has advocated for tech policy that advances innovation for over 50 years.

The following can be attributed to CCIA Director of Research and Economics Trevor Wagener:

“Free and low-cost digital services and tools used by nearly all startups have helped reduce the cost of starting a business from $5 million in 2000 to as little as $5,000 today. Policymakers must keep in mind the interconnected and symbiotic nature of the startup ecosystem when they consider laws and regulations that would prevent leading digital service providers from continuing to offer such services to startups.”

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