U.S. Innovation in Danger, Software CEOs Warn

At the Global Tech Summit, top software CEOs urge policy-makers not to let the U.S. software industry lose its leading position.

WASHINGTON—Even as many software companies have outsourced jobs overseas in recent years in response to growing competitive pressures, some of those same companies were in Washington last week urging policy-makers to do more to protect American jobs and promote U.S.-based innovation and expertise.

The tension between short-term corporate fiduciary duties and long-term market goals was demonstrated in the seemingly divergent message of the countrys top software CEOs, who gathered here for the Global Tech Summit sponsored by the Business Software Alliance.

On one hand, the CEOs presented a promising vision of the world in 2013, where vast networks of small sensors track inventories across the globe; computing is a utility like electricity; and any broadband connection can be transformed into a voice telephone line. On the other hand, they warned that inadequate intellectual property protection, insufficient funding of research and development, and subpar education in science and engineering threaten to blunt the cutting-edge of U.S.-based software development.

Intel Corp. board chairman Andy Grove, warning that software companies will be inclined to outsource if public policies do not provide reasons not to, urged policy-makers not to let the U.S. software industry lose its leading position.

"Do we have the national will to take purposeful action?" Grove asked, styling himself as the "skunk in [the] garden party." "The part that depresses me most is not that we havent done these things but that we havent even articulated the problem."

While in Washington the software executives sought more help from Congress not only for intellectual property protection and research and development, but also for tax breaks and class-action reform. However, they made it clear that they are not interested in other IT-related federal mandates.

"Theres plenty of legislation today. The critical ingredient missing is a framework and a way to apply it," William Conner, chairman and CEO of Entrust, said. "There needs to be context to the legislation thats out there."

The industry has not fully convinced the government that more requirements are unnecessary, however. Addressing the summit Thursday, Department of Homeland Security Secretary Tom Ridge said that policy-makers should consider new security disclosure requirements along the lines of requirements put in place before Y2K.

The industry is fighting the initiative. "Theres already an audit standard out there for reporting internal weaknesses," said Art Coviello, president and CEO of RSA. "What were talking about here is a change in environment."

Ridge, urging industry representatives to do more to promote information-sharing with the government, said that the administration will continue to invite more companies to join Information Sharing and Analysis Centers.

"Homeland Security is about building bridges to one another even as we build barriers to terrorists," Ridge told the software executives. "We will need for more collaboration with the private sector."

To encourage improved voluntary securities practices, the software CEOs Wednesday unveiled a task force to elevate the importance of cyber-security among top executives in the private sector and at government agencies. Echoing a theme of the Bush administrations National Strategy to Secure Cyber Space, they complained that too many corporate chiefs and boards leave IT security to their technology experts when it should be a matter of governance.

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