America Inc.? - collaboration between government and business - Trade

Chief Executive, The, Sept, 1995 by David A. Heenan

Two decades ago, Americans sensed that a once-great nation was in trouble. From declining productivity to double-digit interest rates, reports of the country's demise dominated the news - not just on the business page but on the front page. One common theme to virtually every critique of the dilemma: the failure of U.S. business, government, and labor to build a national consensus. This failure stood in sharp contrast to Japan and West Germany, whose cooperative approaches to economic development were much-ballyhooed.

To the Carterites, the prescription for curing America's economic ills was contained in the heady catchword "reindustrialization." While somewhat vague and imprecise, it did point to the need for greater collaboration between business and government. Nevertheless, Americans flatly rejected this chic, new slogan that begged for the more unified approach of Japan and other countries.

Today there is mounting evidence that the U.S. may be tilting in a more consensual direction. While there are certainly detractors - those who believe that increased government involvement in business could compromise competitiveness - increasingly, Wall Street and Washington are acknowledging the benefits of joining forces, particularly when it comes to international business.

In a sharp break from previous administrations, President Bill Clinton recognizes that an arm's-length attitude toward business doesn't help in the real world, where U.S. firms compete against companies backed by activist governments. Recognizing the old adage, "trade follows the flag," Clinton is directing every arm of government to pursue "commercial advocacy" on behalf of U.S. multinationals. "We have unashamedly become an active partner in helping our business enterprises win contracts abroad," he has proclaimed.

This reshift in focus is directly tied to the White House's economic agenda of boosting growth and creating jobs by expanding American exports. To that end, the president eased export controls on computers and other high-technology gear in 1993. A year later, he swept away bans on the sale of most telecommunications technology to China and the former Soviet bloc. However, it has been the administration's insistence that our diplomats cozy up to American business that is winning converts in many corporate boardrooms.

To its credit, the State Department is rallying around the flag - assisting U.S. telecommunications firms entering Mexico, lobbying for heavy-equipment maker Caterpillar in Syria, and paving the way for McDonnell Douglas in Malaysia.

Today, every U.S. ambassador is trained to promote American business abroad. In addition, the State Department bestows a $5,000 annual award on the foreign service officer who does the most to advance U.S. commercial interests. "When I call the embassy now, I get an ambassador - and the ambassador wants to help. These guys are all revved up to assist the business community," says Roger Sant, chairman of AES, an independent power producer based in Arlington, VA. "I've never seen anything like this in any administration."

Administration cabinet members also are pitching for American business. Whether it is Energy Secretary Hazel R. O'Leary signing $6 billion in joint-venture contracts with China, or Treasury Secretary Robert E. Rubin securing much-sought-after accords for U.S. financial services in India, the Clinton administration is going to bat for corporate America. But the super salesman is Commerce Secretary Ronald H. Brown. Washington must "put the weight of the American government behind U.S. companies," he says. Brown is the point-man on a highly coordinated team, which includes the Commerce, State, and Defense departments, as well as the Central Intelligence Agency and various financing agencies. Brown has been especially effective in leading countless business-government entourages to Russia, South America, the West Bank and Gaza, Africa, China, and India.

Brown's activism is reaping handsome dividends. His team's initiatives on behalf of U.S. exporters have generated contracts worth $19.5 billion, creating or preserving an estimated 300,000 American jobs. Chrysler Chairman Robert Eaton has seen the results: "The Commerce Department today is the most effective and proactive it has been in my business career."

Other beneficiaries of the administration's dollar diplomacy include:

* Enserch Development in Dallas, recently awarded a $450 million, 300-megawatt power plant in the state of Kerala, India.

* Entergy, a power-plant builder based in New Orleans, which signed major deals in Shaanxi and Guangdong, China.

* Exxon, the Irving, TX-based recipient of a $35 billion contract with Indonesia's national oil company, Petramina, to develop a huge offshore natural gas field.

* Raytheon in Lexington, MA, which sold a $1.4 billion surveillance system - satellites, aircraft electronics and computers - to Brazil for measuring the health of the Amazon rain forest.

Understandably, this sudden high-level attention from Commerce is not lost on the captains of industry. George M.C. Fisher, chairman and CEO of Eastman Kodak in Rochester, NY, has said: "Ron Brown has given us more support than anyone I've seen in [the department]."