Xanthippa's Chamberpot

Perhaps it is no surprise that most ‘big businesses’ could not exist (or become so ‘entrenched’) without the willing or unwitting support from governments.

I am not talking about the big bailouts of banks or car manufacturers during times of financial uncertainty.  While I think these are very ill advised (certainly in the current form), they are not the subject of this post.  To get there, we need to go quite a bit back in time, to when the Western world was enjoying quite stable economy.

Since my background is in technology, I will concentrate on this aspect – though my sources are pretty convincing that this is indicative of an overall trend within both the US and Canadian governments, in multiple fields.  And, to be honest, the ideals are very good!  So, let me get to the meat of the story…

Long time ago, when computers were just becoming the thing in innovation (yes, the buzzwords of the day were ‘automation’ and ‘co-operative’, then ‘innovation’; later along came ‘synergy’…. if you have had any contact with the language of ‘bureaucrateese’ (and much of it has been aped by the mainstream media (MSM) – albeit, with a 6-12 month delay), you know exactly what I mean.  We’ve worked our way through ‘centers of excellence’ to ‘best practices’; from ‘co-operation’ to ‘collaborative efforts’; from ‘synergy’ and ‘quality initiatives’ to ‘governance structures’ and ‘connectivity’. 

I hate buzzwords!!!   But that is besides the point.

When ‘office automation’ first became possible with the use of desktop computers and intranets, we saw an incredible spark of creativity.  People came up with creative ideas, started small companies and developed solutions to specific problems – and governments bought the solutions.  It made life better for everyone!

But, as time marched on, it became apparent that different government departments actually had to interface with each other.  Now, all these original solutions presented a bit of a problem – they were not really set up to interface with each other.

It was a natural maturation of the system that governments started to standardize their equipment across all the departments.  One central decision was made as to the system to be used, then all the departments had to do their best to try to fit their applications into it and migrate their operations onto this centrally approved platform.  It is not a perfect system, but at least the right hand knows what the left is doing, so to speak.  And, since this central solution was so big and important, it was natural that the bureaucrats making the purchasing decisions understood that only the biggest and most important players in the marketplace would be sufficiently large to provide the solution.  Obviously!

The effect of this centralization process on all the small hi-tech companies which had sprung up to develop the specialized applications for the various departments was predictable:  it dried up their marketplace completely. 

The result? 

Those ‘little guys’ who became ‘authorized re-sellers’ of the ‘big guys’ products survived – by turning into remoras… with limited horizons.

Other ‘little guys’ who managed to diversify to applications for the private sector suffered a lot of growing pains, but some of them made it.  Not enough of them survived – and their growth was much slowed down, as they did not have the steady support of the government contracts which allows some risktaking in developing new niches.

I quite understand the requirement for standardization of the government systems.  I have no complaints with this!  HOW it was achieved – that is another story! 

Not only did the government (my knowledge of the  Canadian government practices in this area is quite extensive) failed to support the development of emerging small to medium sized companies (these companies are necessary to keep the industry evolving and healthy), they actively undermined them. 

I have seen cases where the small/medium sized Canadian company bid on a government contract – and satisfied all the requirements in the RFP (request for proposal).  Now, for a large project, a company like this may invest several thousand dollars (depending on the contract, it could run high into 4 digits) in preparing the proposal with which to bid for the contract.  The costs are both in development of the solution (after all, you need to propose a solution!) and in the manpower to prepare the document itself.

And, I have also seen technically superior, more cost effective bids from small/medium sized Canadian companies rejected, on the grounds that on page 53 of the proposal, there was a misplaced comma – or the French translation was not gramatically correct.  A large multinational corporation would win the contract…

It pains me to even write about it – but I have seen this happen over and over and over.  Governments prefer working with one large company rather than supporting the growth of a healthy domestic industry in that field.  This is not a healthy attitude – for the government, for the emerging companies and the industry, but most importantly, this attitude has incredibly detrimental impact on the citizens.

Why?

By granting a ‘preferred vendor’ or ‘pre-approved vendor’ status on one or two large companies, the government can exercise incredible control over them.  Worried about loosing their profitable monopoly (or near-monopoly) status, these companies become willing to do just about anything to keep their biggest customer, the government, happy!

Let’s consider the scenario I described in this post, where the City of Ottawa government granted one large multinational company a monopoly to provide internet service to all the ‘rural Ottawa’ residents.  They kicked a number of smaller ISPs already present in parts of this marketplace out – legislating them out of business.  Really.  And the folks running the city thought this was a thing to be proud of!

Now imagine that someone ‘at the City’ lets it be known to the monopoly holder that all internet traffic must be monitored ‘to prevent hate speech’….  Do you think the ISP will put his monopoly at risk, or set up filters on the network that would ‘monitor and report’??? 

Big business enables ‘big brother’ to have eyes….