Sir John pointed out that "most people in public life do find the ambience, the style, the trappings of big business very reassuring -- the dining rooms, the imposing offices, and perhaps most important of all, the sense of remoteness from anything which could be ernbarrassing or undignified, in particular things like customers, competitors, and cash."
He spoke admiringly of people who "choose to be paid by results, by performance, by achievement," as against those who just want to get paid. He mentioned that in big business and in big government there is the same desire to "drift toward Head Office where life is rather safer, rather like being on the General Staff in World War I." Like Sir Charles he called for a "break out of this culture in which people settle for a way of life rather than a life of achievement."
Barry Baldwin, of Price Waterhouse, peppered Lancaster House with more data, confirming the plight of Britain's small business sector. "Japan, with twice our population, has five times as many small firms as we do," said Baldwin. "Although the relative economies of the United Kingdom and West Germany are about the same size, West Germany has over 40% more small businesses than we have in the U.K. . . . Central and local government expenditure of all kinds in the United Kingdom now accounts for about 50% of our gross domestic product." He was tough and direct on opponents of small business procurement setasides. And he proposed a barrage of tax and loan policy recommendations.
Still, three interesting developments, reported in the London press within days of the conference, may indicate that the U.K. entrepreneurial climate may be changing. First, a British Venture Capital Association, modeled on the U.S. National Venture Capital Association, has just been organized. Second, the work load of the Monopolies and Mergers Commission, modeled on our Federal Trade Commission, is expected to soar, both because of pending mergers and because the government has asked it to conduct "efficiency audits" of at least half a dozen nationalized industries every year. If these industries are not efficient, they will either be made efficient or be turned over to private industry. Third, one of the major government workers' unions is planning to organize private sector employees. These union leaders obviously think Mrs. Thatcher has put an end to future government growth and expect the private sector to expand. (Pretty heady news for a visitor from the United States, where government worker unions are still overwhelmingly the fastest-growing segment of the labor movement.)
If you have trouble seeing the connection between a change in another country's entrepreneurial climate and your own business, think of Hoskyns's "customers, competition, and cash." At one time, U.S. companies had to worry only about U.S. customers and competitors and the cash flow of U.S. banks and businesses. Now all of these concerns are part of an intricate worldwide web. If, for example, large banks in the United States and Western Europe lend enormous sums of money to Third World countries, there are far fewer funds available for small businesses at home. Doing anything about that situation means influencing central banks in all of the lending countries involved. To do this would take a level of international small business cooperation that does not exist yet.
The EC countries, the United States, and Japan are probably going down parallel economic railroad tracks. Sometimes one of us reaches a policy station, a turn, or a crossing before the others. This fact alone is reason enough for each of us to watch the progress of the others more carefully. It is one way of anticipating what probably lies ahead. Our awareness of others' progress also helps ensure that no one of us is going to jump the track, sideswipe, or crash into the others.
A March 3 announcement by the United Kingdom's EYSME organizing committee shows how we learn from one another to read thye worldwide small business map more accurately. Acting on a suggestion from this side of the Atlantic, the committee is sponsoring a comparative study of the small business climate in the 10 EC countries. The Economist magazine's research group, the Economist Intelligence Unit, has been retained to do the work. The group will use both statistical and interview data, and results will be evaluated by a three-member committee: Vernon Weaver, banker and ex-SBA administrator; Diarmid McLaughlin, a senior EC staff official; and W. G., Poeton, convener of the Lancaster House conference and chairman of a medium-size electroplating company with three plants in the United Kingdom and one in Germany.
The committee's announcement generously credits this writer with suggesting the project. It points out that INC. has completed two comparative studies of the small business climate in the United States.
On the day I learned of this development The Washington Post carried a front-page article under the headline: "Basic Revisions in Trade Laws Sought by U.S." As the story reported:
The United States has instigated private talks with some, but not all, of its major allies seeking a basic overhaul of international trading rules, because the existing system is not coping with growing tensions worldwide. . . . The administration's move is directed at the 88-nation General Agreement on Tariffs and Trade, which was formed after World War II to regulate international trade.
Maybe next time around, small business will be ready to take a hand in shaping important foreign economic policy. Certainly it has yet to play any role in talks such as these. But can U.S. small business afford to take on protectionism, the international monetary system, and other difficult issues when it has not yet won its critical fights at home? It has no choice. The home issues are themselves becoming internationalized.
