Infotech Gathers Statistics for Lobbying Campaign

Poor government data on the information economy undermines infotech lobbying

The American Electronics Association has developed a new weapon to support its 1997 lobbying campaign -- an exhaustive survey highlighting infotech's growing role in the nation's economy.


The innovative survey, to be released in January, is expected to help industry officials persuade Congress and the White House to push ahead with legal reforms and turn back calls to cut government support for U.S. industry, said Bill Archey, president of the AEA, which has 3,000 member companies throughout the United States. Archey revealed portions of the survey at a Nov. 13 breakfast.

Preliminary conclusions from the nearly complete survey show the U.S. electronics industry generated $337.6 billion in sales during 1995, high-technology services generated $133.6 billion in '94 sales, while communication services generated $265 billion in '94 sales, Archey said.

The industry produced 1.2 million jobs in computer services and 1.9 million manufacturing jobs -- more than the 1.34 million in auto manufacturing, he said. Infotech and electronics also produced 24 percent -- $141 billion -- of 1995 U.S. exports, Archey said.

Reliable data about the infotech industry is difficult to find because government statisticians use outmoded criteria, dubbed Standard Industrial Classification codes, to measure the impact of established industries, such as manufacturing and agriculture, industry executives said.

But the SIC codes -- and thus the data -- miss much work performed by the fast-growing infotech industry, which includes new types of businesses, such as online firms and systems integrators, said industry officials. To correct this problem, government officials launched in 1995 an ambitious effort to modernize their data gathering, especially of data about the information industries. However, the new statistics won't be available until after 2000.

At the beginning of the survey, AEA officials identified 52 existing SIC codes that most closely match the work performed by electronics and infotech companies. The AEA than combed through federal and state statistics until it had accumulated enough data to gauge the economic contribution of electronics and infotech companies.

"Obviously, data on anything means a lot" when industry lobbyists come calling in Congress, said one Senate staff member. For example, the software industry has used data on its own sales, jobs and exports to boost its clout on the Hill, the staff member said.

"Having knowledge about the impact of jobs, competition and investment is very important" to achieve public-policy objectives, said Dan Greenfield, spokesman for MCI Communications Corp., based in Washington.

"If I am a member of Congress and I have someone in my office that represents a $500 billion industry ... that certainly will weigh on my mind," said Charles Cantus, chief lobbyist for the Vienna, Va.-based Professional Services Council, which represents a variety of Washington-area high-tech companies. To aid his lobbying, "we're trying to put that [data] together for ourselves .... It is a time-consuming task," he said.

However, lawmakers in the House pay more attention to the number of affected jobs in their district, while senators and committee chairmen are more likely to focus on the total contribution of an industry, he said.

The AEA's survey also shows infotech and electronics contributions to each state's economy. New York is third behind California and Texas in total electronics and infotech jobs, said Archey.

That state-by-state data will help the infotech industry approach critical legislators during 1997 congressional debates, said Lorraine Lavet, the AEA's chief operating officer. For example, Lavet said the industry could highlight New York's ranking to seek support from Sen. Alfonse D'Amato, R-N.Y., for a new nationwide legal reform designed to help infotech firms. D'Amato chairs the Senate's Banking, Housing and Urban Affairs Committee.

Infotech executives say they need legal reform because lawyers are sidestepping Congress' 1995 securities-law reform by taking their lawsuits to state courts. The 1995 law was intended to curb such lawsuits, which infotech executives say unfairly cost them tens of millions of dollars per year.

To prevent the proliferation of state-level lawsuits, industry executives want Congress to replace the states' law with a nationwide law. "We have a prayer in the first session" of getting such federal pre-emption, Lavet said.

However, "if you are weighing [AEA's data] against the federalism principle, all the data in the world may not count," said the Senate staffer. Senators may prefer to let states decide local rules, regardless of the AEA data, the staff member said.

According to Archey, the data should also help the infotech industry defend valuable government-backed programs such as the Overseas Private Investment Corp. and the Export-Import Bank, both of which offer U.S. government-backed financial support for exports.

These and other government programs, including the long-standing subsidies for overseas advertising, several defense programs and President Bill Clinton's Advanced Technology Program, have been tagged as wasteful "corporate welfare" by various members of Congress.

During 1997, a loose alliance of Democrats and Republicans, such as Rep. John Kasich, R-Ohio, chairman of the House Budget Committee, will try to cut programs they can label as corporate welfare, said Archey.

Pressure for cuts to these programs will intensify as Congress moves to balance the federal budget by cutting popular programs such as Medicare and Medicaid, said Lavet.


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