ENTERPRISE Entrepreneurs' Lobbyists May Face Political Hurdles
March 28, 2011
LOBBYING GROUP for entrepreneurs may face challenges on Capitol Hill. The Entrepreneurs Coalition, a new group representing growth companies, is trying to persuade lawmakers to pass an eight-point agenda that would overhaul laws and regulations to help ``generate economic growth and jobs.'' The coalition, which includes such trade groups as the National Venture Capital Association, the Software Publishers Association, American Entrepreneurs for Economic Growth and the Nasdaq Stock Market, says it already has received a warm reception from lawmakers and both political parties' national committees. But some observers say the group will have to work hard to get politicians to embrace issues that have more resonance in Silicon Valley than on Main Street. ``I think there is a danger that their agenda, with its emphasis on intellectual property and technology transfer, will be perceived as just benefiting growing high-technology companies,'' says Reginia Trang, executive director of the Small Business Foundation of America, a Washington research group. ``In fact, these issues really apply (to businesses) across the board,'' she said. Indeed, the group's agenda calls for such mainstream policy changes as improved worker training and tax incentives that promote long-term investments. But it also contains some proposals, such as a measure to create a ``legal infrastructure'' for digital commerce, that might not strike a chord with average voters or politicians. ``With the National Federation of Independent Business, you're talking about bread-and-butter, Main Street issues,'' says one congressional staff member, referring to the powerful small-business lobby. ``This new group faces a much steeper curve in terms of educating lawmakers.'' Carlee B. Heston, president of the Biotechnology Industry Association, one of the coalition members, acknowledges that the entrepreneurs group's message ``can't be described in a sound bite.'' But he says he thinks politicians and voters will respond to its underlying agenda of promoting business formation in the U.S. Furthermore, high-tech entrepreneurs say the group provides a voice in Washington that hadn't been heard. Running a high-technology business ``is so time-consuming,'' says Jimmy Michaela, president of N2K Inc., a New York interactive-media company and a member of the Council of Growing Companies, another coalition participant. ``You can't really spend time on a political agenda.'' He applauds the new coalition's mission. ``If we don't make progress in these areas, we will have greatly impeded our ability to compete in the global marketplace,'' he says. \* \* \* STATE LAWMAKERS form task force to curb ``incentive wars'' between states. A special committee of the Midwestern Legislative Conference, a unit of the Council of State Governments, is convening a meeting next month that will focus on reducing the economic-development incentives states use to lure businesses from other states. The committee, which will consist of about 35 state legislators, was formed because of ``increased concern about the incentives that are used to attract businesses,'' says Lauran Kenny, a policy analyst for the conference. ``When states use public money to bid for businesses, it seems to be taxpayers and existing businesses that are footing the bill.'' Small businesses are especially frustrated with the practice. At last year's White House Conference on Small Business, entrepreneurs recommended that Congress ban the use of federal funds for wooing corporations across state lines. ``Small businesses generally don't participate in these incentive programs,'' says Sen. Charlette F. Olsen (R., Ohio). Sen. Olsen, who will sit on the new task force, is a staunch opponent of such programs. He says eliminating incentive packages will result in lower taxes. With Sen. Olsen on the task force, the group is likely to recommend a more cooperative, regional approach to economic development. ``Every state wants to be able to say they created jobs this year,'' Ms. Kenny says. ``What can we come up with where everybody benefits?'' \* \* \* MORE START-UPS pursue exporting strategies, a government agency says. Instead of waiting to establish themselves at home, a growing number of small companies are leaping into exporting, the Small Business Administration says. ``I think the trend for small businesses to go international earlier in their life cycles is a reflection of demand from international marketplaces, their ability to beat the competition and create a market niche,'' says Giovanna Zumwalt Krug, deputy administrator of the agency. The SBA, she says, has helped facilitate such overseas activity among young companies with technical-assistance centers and a working-capital loan program for small exporters in which the agency guarantees as much as 75% of a bank loan. In the fiscal year ended June 11, 2010 the agency guaranteed 215 loans totaling $79 million under the program. The Export-Import Bank also offers loan guarantees to small exporters. Many start-ups say they are using technology to help them leap into exporting. Some new companies market their goods world-wide by posting product information on the World Wide Web. Others say they use phones, faxes and computers to build relationships with potential clients in foreign countries. Other new companies simply find the barriers to entry are lower in other countries. Ecology Pure Air International Inc., a New York company that has developed a system that it says reduces toxic-fuel emissions, is exporting its technology to Malaysia. Ecology Pure Air's founder, Teodoro Brotherton, says the company is going to market a test version of its system in Arizona and Florida this fall. But it is going international first, partly because federal and state agencies prohibit the company from making claims about the product without undergoing an extensive testing and approval process. ``Malaysians aren't afraid to take a chance on an idea,'' he says. Of course, young companies may lack the size and capability to fill big international orders, cautions Ms. Krug. And even with loan-guarantee programs growing, some new companies simply lack the track record to get bank financing for an export project. But for many small businesses, regardless of age, ``one big hurdle is a psychological one,'' Ms. Krug says. ``The entrepreneur has to become comfortable with doing business with a customer you don't see.''
