Tech Must Surpass Small Politics in 2005

Opinion: The high-tech industry needs to set aside small-time battles and focus on key areas such as copyright issues, outsourcing and tax policy.

Its been just about 10 years since the high-tech industry started to pay real attention to politics. Next year—just a few days away—will mark 10 years since securities reform legislation passed Congress. That means its been 10 years since it occurred to tech folks that they could battle the Federal Accounting Standards Board in Congress.

Tech is still fighting the stock-options battle, a fight that will go into next year. But given the number of other issues looming on the horizon, isnt it time that tech—which likes to pride itself on its economic horsepower—had some kind of broader political strategy?

It is. And since its time for New Years resolutions, here are a few suggestions for the months and years ahead.


Anxious not to offend, equipment manufacturers—TiVo and Replay, along with Roxio, Apple and others—are happy to cut deals to keep Hollywood and the record companies from launching a wholesale effort to ban their products. For a while, its made sense.

But more and more of these fancy devices are in consumers hands. Digital video recorders are here to stay, and iPods are, too. So, denying the advent of sharing video and audio is silly. Thats why all of techs bigger players ought to get behind some kind of copyright scheme that works.

And, what do you know? Theres already one in place. Stanford professor Larry Lessigs Creative Commons license is a good tool that allows for a variety of uses under a variety of circumstances and, more and more, artists and writers are using and endorsing it. Its about time the hardware folks did, too.

United behind Lessigs scheme with copyright holders—those artistic types who make the movies and songs—and consumers at its side, tech would be a powerful entity on Capitol Hill. Even against Hollywood.

Immigration and Outsourcing

Make no mistake, these two issues are linked. Tech workers who have seen their jobs shipped overseas dont see the difference between having a job move to India or having an Indian move to the United States to take the job.

Techs investors and entrepreneurs see the flip side of the coin: an inexpensive and well-trained labor pool that imports innovation. Thats why venture capitalist John Doerr says that a green card—a permanent residents status —should be given to every foreign-born PhD. In expanding the pool of educated people who come up with good ideas, Doerr sees the potential for more innovation and economic growth.

But folks who were trained by techs hype machine to think of midlevel programming jobs as the keys to a glorious digital future see foreign-born workers as competitors. Thats not strictly the case. Jobs are changing as innovation proceeds. And that trends not going away.

Thats just one good reason why techs leadership needs to sit down and think about the role government should play in deciding who comes to this country and how theyre treated once they get here. And not just for PhDs, either. Vibrant thinkers can come from anywhere.

Richard Florida earlier this year wrote a compelling essay on this topic that I discussed in a column. His thoughts on helping recent arrivals at all economic levels should become part of the discussion on these two, related issues.

Tax Policy

The fight over how high-tech companies treat stock options hits on a fault line that separates them from their hard goods-based manufacturing forebears. And it needs to be bridged.

When companies produce stuff—things you can carry around—its easy to reward employees. The more stuff you create, such as more cars down the assembly line, the more money you make. But what if your employees are charged with thinking of new ways to do things, new processes or concepts? Rewards are more elusive, so tech has settled on stock options to keep employees loyal.

But options arent the only issue here. And thats why Silicon Valley needs to wade into President Bushs tax reform debate and fully participate in it.

Startups need different tax treatment than large, established corporations. Really small businesses need help with Social Security and payroll taxes, medical and other insurances and a host of issues that are trivial to large corporations with big human resource departments but crippling to a startup.

And oh, yeah, you could fold stock options as well as some changes in capital gains and other taxes that annoy the self-employed venture capitalist.

Its a long list, isnt it? But its time for tech to go beyond small politics—the quick fight here, the small battle there—and take on the responsibility of being what it says it is: an economic powerhouse of jobs, ideas and prosperity.


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