Education: the competitor's key

Education: The Competitor's Key The quality of learning is the concern of every firm that wants to succeed in the global marketplace, says the U.S. Chamber's new chairman.

No business large or small can afford not to be terribly concerned about the education crisis facing the United States today," declares John L. Clendenin, chairman and chief executive officer of BellSouth Corp. "It bears directly on our competitiveness as a nation."

With that statement, Clendenin spotlights a major theme he plans to pursue as 1989-90 chairman of the U.S. Chamber of Commerce: education reform as the key to successful American competition in today's global marketplace.

Clendenin assumed the top elected post of the world's largest business federation at its recent annual meeting, moving up from vice chairman. He succeeded William S. Kanaga, chairman of the advisory board of Arthur Young, a major international accounting firm.

As head of the U.S. Chamber, Clendenin will represent the business community at the highest levels of government on the wide range of public-policy issues affecting the enterprise system.

His concern about improving educational quality, Clendenin says, will be part of the emphasis he wants to place on "competitiveness in all its aspects."

Other issues affecting America's ability to compete in global markets, he explains, include:

. Making sure American business is not disadvantaged by the economic unification of Europe, which begins in 1992;

. Achieving federal budget balance through spending controls, not tax increases;

. Preventing imposition of mandated benefits that would add to operating costs of American businesses, putting them at a disadvantage in world trade.

Clendenin comes to the Chamber chairmanship with a background of leadership in the telecommunications industry, which has been on the cutting edge of the information-management revolution that has made major changes in the way Americans work and live. He has been chief executive officer of BellSouth since its creation on Jan. 1, 1984, and chairman of the board since April 1 of that year. A native of El Paso, Texas, he graduated from Northwestern University in 1955.

With time out for service as a pilot in the U.S. Air Force Strategic Air Command, Clendenin has spent his entire working life in the telecommunications industry. He began in sales and marketing with the Illinois Bell Telephone Co., advancing there and through subsequent service at Pacific Northwest Bell Telephone Co. in Seattle, American Telephone & Telegraph Co. headquarters in New York, and Southern Bell in Atlanta, where he became president in 1981.

In 1984, Southern Bell and South Central Bell became part of BellSouth Corp., the largest of the seven telecommunications companies established in the historic restructuring of the American telecommunications industry. Under a consent decree settling a federal antitrust suit, AT&T retained its long-distance and equipment-manufacturing components but divested the 22 Bell operating companies, which emerged as seven independent companies.

In addition to the two telephone operating companies, BellSouth also includes BellSouth Services, which performs staff and planning functions, and BellSouth Enterprises, which includes worldwide mobile communications, directory publishing, telecommunications systems, and computer leasing and maintenance.

BellSouth revenues went from $9.6 billion in 1984--its first year of existence--to $13.6 billion last year. The company ranks behind only AT&T and General Motors Corp. in total number of shareholders.

Clendenin points out that to most of its publics, BellSouth is "still `the phone company,' but we now conduct business in some 45 states and 20 foreign countries" because of explosive growth of telecommunications services in the Information Age.

Another activity of BellSouth reflects the company's commitment to improving the quality of education. It's the BellSouth Foundation, now endowed with $35 million to seek out and support innovative programs that encourage excellence in teaching and learning at the elementary, secondary, and college levels.

Appraising the current state of American schools, Clendenin says: "There is an urgent crisis in education in this country. Everybody knows it. The negative statistics keep rolling out in an avalanche. As the chairman of a company which employs 100,000 people, I worry about the educational product our schools pour each year into the work pool. We see young people coming into our employment offices who lack the qualifications needed to pass tests for even the entry-level positions.

"We know that the highly technical jobs of the Information Age are going to make the problem even worse because the skill requirements are going up.

"If our young people don't have the skills necessary for the kinds of jobs existing in the year 2000, then both our domestic and foreign customers for our products and services will look elsewhere in the world, and the American economy will suffer."

There is a role for all businesses in the effort to turn that situation around, Clendenin says: "Smaller and medium-sized companies can join this effort. They can volunteer to be part of the fixing process at the local level. They can adopt a school or join with others in adopting schools. They can work hard to understand what some local problems are, what has to be done to fix them, and they can offer career guidance to young people."

While improving educational quality is among Clendenin's chief concerns, he also will be discussing other issues under his agenda of "competitiveness in all its aspects."

The economic unification of the 12 European Community nations taking effect in 1992 will be a crucial competitiveness issue, he points out: "American businesses need to spend a lot of time fully understanding and planning for the changes that will occur." (See the cover story, Page 18.)

He links that development to the long U.S. campaign for "a level playing field" in which no trading partner creates barriers to a bilateral flow of goods and services.

The quest for the level playing field, Clendenin says, is becoming a more urgent goal as European unification nears. "I think that 1992 may indeed compound some of the problems that exist in that area," he says. "We can't afford to let EC92 evolve into the `Fortress Europe' that many people are concerned about--the closed market that favors its own products to the exclusion of others. That concern is real. A Fortress Europe would be very damaging to the economic health of our country. We have to speak forthrightly and early to make sure that doesn't happen."

How much success is this country having in its efforts to achieve the level playing field? "I think we are making some progress," Clendenin says, "but I think that it is still a lot easier for foreign companies to play in the American ballpark than it is for American companies to play overseas."

He rejects protectionism as an answer and calls for a top-level U.S. effort "to emphasize the urgency of this problem and work with foreign governments. I'm not too sure that we put enough heat on some of these countries."

Turning to domestic issues as factors in competitiveness, Clendenin says that the budget deficit is one of the most pervasive: "Business is totally impacted by the continuing need to deal with the deficit problem. We haven't licked it. I don't think we have really bitten the bullet on government spending in a way that we're going to have to."

His response to calls for tax increases to balance the budget: "It is a simplistic notion that you can solve all economic problems by imposing taxes. We can't afford to do anything that causes a loss in competitiveness by saddling American businesses with additional tax burdens."

On the question of whether the federal government should require businesses to provide benefits such as health care, parental leave, and a higher minimum wage, Clendenin says that such proposals "are well-intentioned. They suggest ways of dealing with issues that are surfacing as concerns in the minds of many Americans.

"We haven't quite accommodated some of the dramatic shifts in the working population, such as the impact on children when both parents work. But the question is whether we can saddle American business with additional economic burdens and expect them to remain competitive. What do we gain by driving several hundred thousand workers into unemployment because the small and medium-sized businesses that had employed them were unable to absorb the costs of these new mandates? Does that put us ahead as a nation? Clearly, it does not."

The goal, he says, is finding "a middle ground that recognizes the reality of the problem but doesn't make that problem worse. I am not sure that I have yet seen any proposals that pass muster on that basis."

Clendenin points out that the U.S. Chamber has been pressing the various issues associated with competitiveness for some time now, and he will be reinforcing those positions in his year as chairman of the business federation.

It will be a busy year. In addition to his duties with the Chamber and his continuing responsibilities as head of one of the world's largest companies, he also is this year's chairman of the U.S. Savings Bonds Volunteer Committee, which heads up the effort to encourage Americans to purchase savings bonds. Clendenin came to that job through his company's strong commitment to the program and his own service as chairman of the campaign for the telecommunications industry. James A. Baker III, then secretary of the treasury, asked him last year to take the top job in the volunteer effort on the savings bonds.

The results of the bond campaign are "absolutely" worth the time and effort required, Clendenin says: "Over and above the critical importance of cultivating a positive attitude toward savings in this country, which I think is really justification enough, our government depends heavily on savings bonds as a source of revenue."

To look at it from the savings perspective, he explains, "you must realize that in the 1980s, the American personal savings rate dropped to 3-4 percent, compared with about 13 percent in West Germany and more than 20 percent in Japan. A lot of dreams can be achieved if people adopt a habit of personal savings."

Then there is the revenue impact: "For every $1 billion in bonds we sell, we save the government $70 million in interest charges on the national debt. So if we reach this year's $8-billion goal, we will save $560 million in interest.

"People who buy bonds are saving for their own futures and helping the country. It's a painless way to save. If you don't see it, you don't spend it. The obvious advantage is that today's bonds earn market-driven rates."

He sums up his service in the drive: "It's not hard for me to get enthused and involved about a program that achieves such results."

That enthusiasm extends to his other activities. It takes the form of both optimism and a warning when he is asked whether, despite problems and challenges, the U.S. retains the ability to compete aggressively in today's global marketplace: "Absolutely. America has the raw capabilities that should permit us to do very, very well in the competitive arena."

Clendenin also offers this caveat that is the basis of his agenda as a principal spokesman for American business: "We have to work at it. The world is charging ahead, and technology is charging ahead, and we have to keep competitive. Status quo won't do it."

COPYRIGHT 1989 U.S. Chamber of Commerce
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