Monday, September 23, 2013

The Slow Bleed From Slashing Government Meetings

While I was absorbing a new report on government-initiated meetings and conferences in the days following the twelfth anniversary of the 9/11 attacks, I was struck by the results of a new poll showing that confidence in the federal government and its ability to solve problems has fallen to fewer than 5-in-10 Americans.

With the exception of 83% in the months after that event, this Gallup measure has averaged about 61% since 1976, following a similar high level of confidence in 1973 which seems ironic because that was a pivotal year in the Watergate investigations.

Confidence has lagged overall since the “oil crisis” later that year.  The measure has fallen nearly as low as it is today before, just prior to 9/11 and again during the financial crisis.

What is more remarkable is that half of Americans still have confidence in the government in light of what has been done done since the early 1980s to emasculate government.

It was demonized during the Reagan years and then much of its expertise and capacity was contracted away during the Clinton years in the 1990s, an unintended consequence of so-called streamlining.

Whatever our collective impressions of government may be, as the “old saw” goes, you get what you pay for. 

Most recently, unimpressive journalism has further incited resentment of and stigmatized both government-sponsored meetings and attendance by public servants at private sector meetings by super-generalizing isolated behavior.Value of Government Meetings

Last summer, Rockport Analytics which is headed by a friend of mine, Ken McGill, conducted an in-depth analysis of the costs and benefits of these meetings. 

The benefits overall from  conventions and meetings of all types, includes the contribution of about 10% of overall visitor-centric economic development from this sub-segment.

In 2009, nearly 1.8 million meetings-related events including those initiated by government were held across the nation generating $263 billion in spending.  Half of the attendance at these meetings was non-local.

About 15% of the events were national, regional or state conventions and conferences including 8% that were likely to meet in convention or conference centers, a tinier fraction of which were likely to rotate geographically enough to be interested in communities still obsessed with an arms race to build mega-centers.

Rockport was asked to take a closer look at government initiated meetings or those attended by public servants after officials have singled out conventions and meetings for budget cuts.

Few Americans understood these types of budget cuts ended up costing taxpayers millions more than if they had been held, not to mention the further damage it did to the economy.

Nothing is so inviting a target for politicians because it almost always rouses feelings of envy among voters and visions of junkets among the more than two-thirds of the workforce shown to be disengaged or actively disengaged.

The Rockport report reveals that in 2011, government initiated meetings generated $17.9 million including $7 billion in production costs and $10.9 billion in travel-related expenses.  This is 7% as much as the private sector spends on conventions and meetings.

This spending on government meetings added $24 billon to the nation’s GDP, supported 344,000 jobs across the US economy and generated $14.5 billion in employee wages and income for proprietors.

Meetings initiated by government also generated $5.5 billion in federal, state and local tax revenue, offsetting a third of their cost.  The Rockport analysis also breaks down this impact by state.

Spending on meetings-oriented travel was about 36% of government travel expenditures in 2011, compared to the 48% meetings represented of private sector travel.

Government meetings are much more frugal than the private sector with the government spending about half as much per employee.  Using wages as the comparison, government meetings spending was about one-third as much as the private sector.

The government also spends 20% less per diem per delegate on meetings.  Government travel policies are much stricter than the private sector.  Overall, government-initiated meetings are .2% of total government spending.

The part of the report I found most interesting includes survey results of government supervisors on what they find most beneficial about the meetings to public servants and to citizens and a similar survey on how productive private sectors executives and business owners perceive the meetings to be.

A third of government supervisors cite employee development and training as the most essential benefit followed by nearly a quarter who cite knowledge transfer and bridging information gaps.

When it comes to the benefits to citizens from these meetings, 67% cite communication of government services and programs and 66% cite knowledge transfer followed by several others including private sector business development and incubation.

By a more than 5-to-1 ratio, private sector executives and business owners see meetings attended by both government employees and private sector employees as having a positive vs. negative return on investment.

Of greatest impact from a private sector view is that the joint attendance by both government and private sector employees results in the generation of new partnerships and new ideas and insights which are perceived to be far more important than developing leads or converting prospective customers.

When asked how the private sector benefits, executives and business owners cite knowledge transfer.  More than 4-in-10 note the opportunity to gain information and awareness not available elsewhere and a third cite establishment of best practices and market development.

It is clear to me that the small savings from cutting back on government meetings is far outweighed by their stimulus of economic activity, but even more by the intangibles noted above.

Cutting government meetings or attendance by public servants at other meetings won’t result in immediate harm but it will create a slow bleed that will show up in lost productivity, innovation and collaboration.

In August, an excellent report by the New York Times noted that due to the sequester, government travel budgets have been slashed by 30%.  One result is that there is only enough money to send investigators to one country out of the 41 accused of violating intellectual property rights.

Americans won’t see the effects immediately or dramatically, but over time the loss of expertise, capacity and knowledge transfer will undermine America in ways no enemy could.

Here is a link to a fact sheet, but the full report is well worth reading in detail.

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