A few months ago, Inc. and market research firm MarketTools conducted a survey of entrepreneurial small-business leaders on 2008 political issues. When asked to give their party affiliation, 37 percent went for the GOP and 27 percent said they were Democrats. One quarter of the entrepreneurs surveyed for the Inc.-Zoomerang Entrepreneurial Report identified themselves as Independent voters. Though still conservative on issues such as taxes and regulation, the latter group came out for a Hillary Clinton presidency: Of 1,000 respondents, 22 percent said if the presidential election were held at that time (mid-October), they would vote for Clinton.

In another surprising turnaround, the report shows that this traditionally anti-tax and anti-regulatory constituency today chooses health care as the No. 1 issue affecting their vote. A majority, 57 percent, say that a regulated health care system would be good for growing businesses.

These findings seem to represent an enormous change within this historically Republican group.

"From construction companies to real estate agencies to high-tech firms," the report shows small business leaders are generally unhappy with the current state of national politics. Asked if the current administration was on the right or wrong track, 62 percent of respondents said "wrong."

Moreover, 80 percent of the business leaders surveyed feel that government doesn't do enough to help growing business and is more focused on big business, and 85 percent believe that the current crop of presidential candidates do not focus enough on their issues.

What are their issues?

The New York Times last month began one of its reports with this:

Business lobbyists, nervously anticipating Democratic gains in next year's elections, are racing to secure final approval for a wide range of health, safety, labor and economic rules, in the belief that they can get better deals from the Bush administration than from its successor.

"Hoping to lock in policies backed by a pro-business administration," the NYT went on, "poultry farmers are seeking an exemption for the smelly fumes produced by tons of chicken manure."

A growing sense that the next administration could be Democratic has led to corporate executives, trade associations and lobbying firms not only reevaluating their business strategies, but also trying to secure final approval for a wide range of regulatory changes before President George W. Bush leaves office. Just a few examples:

• Employers want to tighten the rules for employees taking family and medical leave. Democrats, women's groups and labor unions want to expand workers' rights.

• Electric companies want to be able to modify some coal-fired power plants without installing new pollution-control equipment. Environmental groups say increased emissions would harm public health.

• Trucking companies support a rule increasing the maximum number of hours that commercial truck drivers can work. Highway safety advocates say driver fatigue would increase the risk of crashes.

• And coal companies favor a rule to make clear that rubble from mountaintop mining can be legally dumped into valleys and streams, while environmental groups say this will further damage forests, fish and wildlife.

Moreover, exit polls thus far have been showing that the economy is the No. 1 issue for voters in a number of states. And as candidates jockey for position in the primaries, free trade has taken a more prominent role than anyone expected.

After all, the presidential campaign began to unfold during a period of major tests to U.S. trade policy: a surge in the U.S. trade deficit to China; the growing practice of offshore outsourcing jobs; concerns of fallout in U.S. manufacturing towns; a foundered Doha round of global trade talks; Congress approval of several Free Trade Agreements (FTAs) between the U.S. and smaller countries (e.g., Chile, Singapore, Oman); and narrow approval of the Central America Free Trade Agreement (CAFTA).

"Though many of the candidates claim to be in favor of free trade, their rhetoric and voting records vary," as the Council on Foreign Relations has noted.

Yet for state governments and the majority of U.S. industry sectors, the run-up to the 2008 election will mean "business as usual."

This being an election year, leaders in Capital Hill will likely be reluctant to introduce new bills, approve major program expenditures or engage in any activities that resemble risk taking, according to Deloitte & Touche USA LLP in its 2008 Industry Outlook: A Look around the Corner report, released last week. Similarly, the possibility of an administration change and legislative mandates to address global warming will likely prompt energy companies to delay investments in power generation facilities and slow automotive manufacturers' response to fuel economy and other environmental issues.

While this election has the potential to generate a significant level of change at the federal level, it likely will be mid- to late-2009 before the nation sees any associated legislative impacts given the time it takes for a new administration to build Congressional alignment. Therefore, most companies will continue to move forward with current initiatives while they keep a watchful eye on the changing political landscape.

One opportunity that may emerge from the 2008 election is how the U.S. relates to the rest of the world. In the last eight years, the index of trust and admiration for the U.S. that was generated after the Sept. 11 terrorist attacks has fallen significantly. This year's election could help restore that trust and the resulting business that flows from it.

Resources

Small Business Leaders Favor Hillary Clinton According to New Inc.-Zoomerang Report
Zoomerang, Nov. 6, 2007

Business Lobby Presses Agenda Before '08 Vote
by Robert Pear
The New York Times, Dec. 2, 2007

2008 Industry Outlook
Deloitte & Touche USA LLP, January 2008

The Candidates on Trade
Council on Foreign Relations, Dec. 4, 2007

Big Business Wins with Congressional Dems
by Lisa Lerer and Victoria McGrane
Politico, Dec. 17, 2007