Marching On Washington, '80s Style
LET'S FACE IT: WASHINGTON AND the small-business community will never be the best of friends. In a town that worships power and celebrity, the small-business owner is treated like a hick, a nagging constituent to be patronized and placated. The businessperson, in turn, views Washington's politicians and bureaucrats as the source of what he most dreads: regulation and taxes. It's been that way under Democrats and Republicans alike.
In recognition of this problem, Congress and the President occasionally convene a White House Conference on Small Business, to try to improve communications. Back in 1938, when Franklin D. Roosevelt was in the White House and the nation was slowly emerging from the Great Depression, the conference got so heated the cops had to be called in to break up the fistfights. It took Democrat Jimmy Carter to revive the tradition as an election-year gambit back in 1980, generating a good deal of enthusiasm and a list of 60 recommendations, two-thirds of which were eventually incorporated into government policy. Again this month, some 1,800 small-business leaders will gather in Washington for what one observer calls "the entrepreneurial equivalent of the Vietnam peace marches."
Like most marchers on Washington, they will be talking mostly to themselves. Congress, which issued the call for the conference, will be out of town on its summer break. So, too, President Reagan, the nominal host, who is expected to be at his ranch in California. Look for a highly political welcome from Vice-President George Bush, who seeks Main Street support for his own Presidential ambitions.
In private councils, the Administration has been unenthusiastic about this event. "Clearly, they don't care if the thing ever happens," says Jack Rennie, chief of the Massachusetts delegation. The White House concern is over the expected denunciation from the conferees of the Administration's campaign to close down the Small Business Administration. Rennie, in fact, warns that "the whole conference could blow up over it." A 53-person White House staff assembled to run the conference is doing its best to defuse the SBA issue and minimize its importance. It appears that the White House, for example, was behind a story leaked to The Washington Post to the effect that the Administration was quietly backing off its SBA position, at least for the current fiscal year. These efforts, however, have only strengthened the opposition. "Even people who didn't care about the SBA one way or the other are inflamed by the way that it's being handled," says Rennie.
Saving the SBA is only one of 2,200 recommendations forwarded to Washington by 20,000 small-business people who gathered at statewide meetings over the past year. Some of the resolutions are predictable: balance the federal budget and solve the liability insurance crisis. Others are a trifle optimistic: the Maine group, for example, voted to "burn" the U.S. tax code. The conference delegates and staff have condensed the 2,200 suggestions to 300 of the most vital. It will be up to the delegates elected to go to Washington by each of the state conventions to boil those down to the final 40.
The mix of participants is markedly different from 1980. Back then, the list included lobbyists, professors, and even members of the Big Eight accounting firms, who worked their way in under the masquerade that their branch offices were, in effect, small businesses. This time, the field has been narrowed to small-business owners, partners, and officers. That should tighten the focus and keep the business prospecting to a minimum.
Women are playing a far greater role this year. In 1980, they constituted only 16% of the delegation, and gravitated to special women's groups that tended to trivialize their impact. This time, they make up a third of the conference, and they have maneuvered impressively to elect slates of female delegates, capture important positions, and help redefine the conference agenda.
The New Jersey Association of Women Business Owners, for example, ran a four-member slate at its state convention in Cherry Hill, and packed the hall with about 600 businesswomen to assure their selection as delegates to the Washington conference. The female candidates circulated platform papers, worked the crowd like ward healers, and showed up at a cocktail party with napkins that had their names printed on them. "It was a definite plan of attack," says Donna Orr, a restaurant-equipment broker and a member of the female slate. "Women are becoming more aggressive on the political scene when it comes to our livelihoods."
Perhaps one reason for the women's success was that they stayed away from "female" issues. Of the two dozen or so female delegates I telephoned, not one said it ever even crossed her mind to devise a separate agenda for women. In fact, they are put off by the very idea. "Business is business, whether you're black, white, male, or female -- we all have the same problems," says New Mexico delegtate Amy Lawrence, who runs a garden-supply operation in Albuquerque. "I want to be where the action is, and the action right now is not in fighting for women's rights."
But the presence of so many women at the conference has had the effect of tilting the conference agenda much more toward service-industry issues than in the past. Nine out of 10 female business owners are in services, and this year approximately 53% of the conference delegates are in retail, consulting, and personal-service businesses. Among other things, these service-sector delegates will be pushing for an updating of the so-called Standard Industrial Classification (SIC) codes, which form the basis for a great deal of government procurement, and which do not yet reflect the newfound importance of the service and information industries. Right now, businesses owned by women get only seventenths of one percent of government procurement outlays. And there will be a push to improve equal access to commercial credit, where service companies in general, and women owners in particular, too often have found themselves shut out by bank-lending policies that many delegates think are discriminatory.
"Financial institutions are asset-based lenders, and a tremendous number of women are in soft-asset, knowledge-based businesses," says Illinois delegate Susan Winer, president of a Chicago firm specializing in raising equity capital."The banks still have not learned how to lend against brains."
Perhaps the most important contribution that the women will make to this White House Conference is in providing fresh ideas and a fresh attitude about the relationship between Washington and small business. Many of the male delegates have been working the same small-business issues for decades, and by now their complaints are wearing thin, their prescriptions are becoming outdated. The point of view of these male veterans is that of a long-oppressed minority group with a special-interest agenda to peddle.
The women of the White House conference, by contrast, are less interested in settling old scores, winning old battles. And, as women who have learned to deal with minority group status, they have an important lesson to teach small-business owners of both genders: that real power and influence is better gained by climbing out of the special-interest rut and acting and thinking like important players in the main event.
Indeed, when it comes to the new American economy, small business is very much the main event. It generates 80% of the nation's new jobs, and accounts for nearly half of the nation's output of private goods and services. It is at the cutting edge of technological change. With all that going for it, isn't it time for small business to quit whining about the government's lack of attention and stop confining itself to parochial concerns?
Virginia Littlejohn seems to think so. She's a conference delegate frrom the District of Columbia who has long been active in small-business circles, and who is concerned that the scope of the small-business agenda is still too narrow. "There is a big gap in future-oriented issues," she complains. "The recommendations are very piecemeal. There is no guiding vision. It will be incumbent upon the national delegates to up the ante, to raise the level of thinking, to devise more sophisticated policy positions."
Littlejohn makes an important distinction between being small and thinking small. If there is really an entrepreneurial revolution under way, why not take the economic Bastille by storm? Forget the tiny SBA -- why should small business not set its sights on the giant Department of Commerce, with its cabinet secretary and its trade office, its subsidy programs, and its powerful bureaucracy. Rather than worrying about special tax breaks and set-asides, why should small business not move toward playing the dominant role in setting the government's overall economic agenda, from interest rates and money supply to trade policy and the dollar?
The 1986 White House Conference on Small Business promises to be a lively affair. Should it really succeed, next time they'll be calling it simply the White House Conference on Business.