AFTER years of running from any suggestion of a government-led ``industrial policy,'' many American corporate CEOs and small entrepreneurs not only accept Washington's help, but are eager for more.
They welcome a policy that ``picks winners'' with federal financing, that takes aggressive measures to beef up American exports, and that recasts the relationship between businesses and government.
For many whose worst nightmare has been having Uncle Sam in the company board room, the tough post-cold-war scramble for foreign markets and the distinct disadvantage of American firms vis-ia-vis their often heavily subsidized and government-endorsed European and Asian counterparts made the difference.
This week's Senate debate on the National Competitiveness Act, which advocates call the cornerstone of President Clinton's national technology policy, was really a showdown between industry proponents, who hailed the legislation as a tool to sharpen US commercial success overseas, and Republican opponents, who were out in force.
Paul Allaire, chairman and CEO of Xerox Corporation, fought hard for the legislation, which promotes advanced technologies through government financing, provides cutting-edge-industries with Commerce Department guidance on long-term strategic planning, and aims to boost productivity in small- and medium-sized firms by helping them pay for costly modern manufacturing technologies.
``It is incredibly pretentious to think that politicians on Capitol Hill can better decide what industries offer promise for job creation and technological innovation,'' says Sen. Daniel Coats (R) of Indiana. ``We should let the free market determine which businesses should succeed, not a group of bureaucratic tinkerers in Washington.''
But the Clinton administration seeks to do more than tinker.
``We make choices all the time about what our commercial policy is going to be,'' says David Rothkopf, deputy undersecretary of commerce for international trade and policy development. ``We must have policies that not just open markets, but build market share; not just make trade possible but help us trade more. We must recognize the real economic levers at our disposal and understand our real economic interests.''
One of those levers is government advocacy for US commercial interests. Commerce Secretary Ron Brown set a precedent with his recent successful marketing trip to Saudi Arabia, where he cinched a $6 billion contract for US aerospace companies and helped arrange easy credit terms.
``Almost every other government is pushing on behalf of their firms,'' says Commerce Deputy Secretary for International Trade Jeffrey Garten, who returned last week from a tour of Asia where he pressed regional leaders to award US firms a total of $12 billion in projects now open for bidding. The only way US firms will secure a fraction of the business is if US officials travel to these markets and lobby on its behalf, he says.
The White House wants to better position American firms by providing credits. The US Export Import Bank, which helped to fund $17 billion worth of US exports last year, is more assertive than ever in pushing US goods and services abroad. Ex-Im's Chairman Kenneth Brody says he spots ``real opportunity'' in high-risk markets. Last week, for example, Ex-Im announced its readiness to approve $245 million for a Russian oil project.
``We are aggressively assisting our suppliers,'' says Mr. Brody, who is speeding up the loan process so US firms can respond faster to market developments and offering funds previously unavailable to small firms.
He is blunt about the bank's objectives: Ex-Im ``is needed to level the playing field for US companies facing foreign competition backed with financing from other governments.'' The bank just deposited $150 million - a small but symbolic sum - in its so-called ``war chest'' for this purpose.
It will take much more for the US to measure up. In Japan, for example, private trading companies recommend to the government how much money it should put into a developing country and then the government transfers the aid, tied to procurement of Japanese goods and services.
``Indonesia is the fourth largest country in the world, and the Japan program to aid its infrastructure is $2 billion a year; our's is $90 million and it goes toward `soft projects' that generate scant business for US firms,'' says Mr. Garten. In Germany, he adds, ``the government considers bribes to win foreign contracts a necessary business expense and offers tax deductions to German nationals.''
Murray Weidenbaum, director of Washington University's Center for the Study of American Business, echoes what many detractors say: Business executives may want government to offer strategic help at strategic times, but ``inevitably, the political process will decide which high-risk, long-term strategic projects will be selected.'' Imprudent choices will result, he adds, with politically powerful firms funded at the expense of less ``establishment'' cutting-edge companies.