Politicians ears deaf to tech's cries, Would tech insider heed call for US competitiveness action?
It’s been more than a decade now that I’ve been reporting on the electronics sector and I can no longer count the amount of content I’ve written over that course of time regarding the cries for action on dwindling US competitiveness. More high-tech industry execs and engineers than I can count have lobbied our political officials for funding, for improvements to the education and immigration systems, for tax cuts and incentives to keep (and now to bring back) manufacturing in the US. Bill Gates, Craig Barrett, George Scalise, Dean Kamen, and Andy Grove are among those who have rallied for government support and who have for the most part had their words fall on deaf ears.
This week’s Technology Policy Institute Forum in Aspen brought more of the same cries for help from Intel CEO Paul Otellini. Otellini, never shy when it comes to calling for government support of tech, is quoted in this article as saying, “the next big thing will not be invented here. Jobs will not be created here. Our research centers were [once] without peer. No country was more attractive for start-up capital. We seemed a generation ahead of the rest of the world in information technology. That simply is no longer the case.”
According to the article, Otellini in his Monday evening presentation went on to question Democrat-majority decisions out of DC, as well as the US’ tax rate, a topic former HP CEO and now Republican Senate candidate Carly Fiorina also made sure to bring up during her presentation at the forum.
Carly, the first and so far only woman to head a Fortune 20 company and also the chair of the Technology Policy Institute’s board, is not the first tech exec to toss her hat into the political ring, but she is one of the better known by the general public, largely promoted by her high-gloss mainstream media magazine cover shots in the late 1990s and early part of this century.
Her statements made at the forum Monday morning included:
“The 21st century is now defined by technology. Now leadership is about brain power and innovation. .. For the United States to confidently move forward in the 21st century as an economic leader, we as a nation need to concentrate on what is necessary for us to be the leader in the world in terms of the brain power we develop, we attract, we keep, we grow, and what is necessary to ensure that we are the leader in innovation in the world in the 21st century.
“We have to recognize that our companies are competing on a global stage. We face challenges from nations like China and India who are investing heavily in innovation and brain power. Our corporate tax rates are now the second highest in the world. Our tax rates on businesses are now just behind Japan, whose economy was recently surpassed by China. Talking about business tax rates and lowering them is not about rewarding companies that ship jobs overseas. It is about acknowledging the reality that companies go where they are welcome. The truth is our companies, in terms of tax rates, in terms of governments helping them form, in terms of access to credit, are now more welcome in places like India and China than they are in some parts of the United States.”
You can watch Carly’s full presentation here.
It’s doubtful that anyone reading this blog post would argue that US competitiveness in tech is fine and that we don’t need government action now, if not decades ago, but I wonder if this audience’s California residents will be supporting Carly in November or will vote for Democratic incumbent Barbara Boxer.
From what I’ve seen from my seat here in New York, Carly isn’t putting heavy emphasis on tech in her campaigning. Instead, she seems to be broadly stressing the likes of energy and the environment, immigration, and job creation. These are all issues tech battles with, but her campaign, as campaigns do, aims to reach a wider and less specific audience of voters.
Does Carly’s perspective as a Silicon Valley insider give her a better perspective on these issues? Would her tech background, with its successes and failures, make her a good choice to represent California in the US Senate? Or will her ears, too, become deaf to tech’s cries if she takes the seat? Share your opinions on Carly, overall US competiveness, and the government and politics influence on innovation below.
savroD commented:
To Concerned Coloradoan....
She is a national disgrace. Have you listened to the nonsense she is spewing in the media or are you a right-wing hack too!
Fading_hope commented:
All of the decisions that have led us to this point in history will take years to correct, assuming that the republic survives that long. In any engineering problem, the first thing that you must do is remove as many variables from the unit under test to find the true cause of the fault. One is the large illegal population. Would be fairly easy to identify and remove, and the ROI would be HUGE! Good fences make for Good neighbors. SIMPLE.
Concerned Coloradoan commented:
To Cor van de Water:
Carly DID NOT run HP into the ground ... I worked there at the time, I know what happened. If you want to assign blame, point at all the HP middle managers - the long time HP'ers - the 50-something white guys just hanging out waiting for retirement. My boss (a 61 yr old HP veteran who had never worked ANYWHERE but at HP) actually said "I'm not going to do what that crazy woman wants us to do ... I'm 4 years from retirement ... she can go jump in a lake". (That's not exactly how he said it - but his language isn't fit for public posting). I quit the next day. Carly wanted to change HP - none of the middle managers who started in the 1970s would have any part of it. So, Compaq bought HP. Yes, Compaq bought HP - not the other way around except on paper. What did HP do? Hired a white guy CEO who did exactly what Carly tried to do ... ever wonder why Carol Livermore always gets passed over at HP? She's a lady. I'm a man in his mid 50's by the way ... and Carly is NOT a national disgrace. She's a bright and honest executive ... and would be great as a politician.
Andy T commented:
I'm well aware of the "third place" table on absolute spend, which was originally alluded to by my buddy arclight, and to whom I was responding. Per GDP is the correct way to look at the cost to a given economy/society, profit or not...that's the level playing field that does not feed the insane agenda of fascists and private-schoolers.
Spending on Afghanistan and Iraq takes priority over education - killing our kids in someone else's wars instead of educating them is more important to America...something is f-ed up with that.
"when the rich wage war, it's the poor who die" - Linkin Park/Jean-Paul Sartre
Fun with statistics commented:
@Andy T .... Sorry, but that graph was per-GDP. You need the near-by actual dollars graph: //www.nationmaster.com/graph/edu_spe_per_sec_sch_stu-spending-per-secondary-school-student, which puts U.S. spending as 3rd place.
At $7800/student-yr, about thats $200k per classroom. Of that, about $50k is for the teacher, and some more for overhead, so the profit margin is just fine, thank you very much.
Cor van de Water commented:
I won't comment on how Fiorina almost ran HP into the ground, so you figure out for yourselves if she would qualify to run California.... But I work for a US company and I had to follow my job to... India, where the entire development now takes place. Mind you, in the city where the devt center relocated there are no less than 25 Universities!
I think the USA has a long ways to go after all the obstructionalist politics caused a standstill in many emerging technologies such as the many fields of renewable energy and energy efficiency - not just in cars but in many areas and that translates into higher qualified jobs and interesting engineering challenges. There are areas where some companies do the right thing, for example Apple with iPhone and iPad are certainly at the forefront, but I see many US companies doing the same thing over and over while convincing both politicians and public that this is the best thing under the sun... Until their competition beats them easily in their own game. See GM and Toyota.
savroD commented:
Carly Fiorina is a national disgrace, along with a whole host of media personalities. These folks rail against government just so they can what? get a government job and get on that dole themselves? Look folks.... the problem is with the unholy alliance between business and government, plain and simple. We've allowed the media to become entertainment based and people lap it up like heroin. It's a sad state of affairs. I'm hoping our youth will have what it takes to turn this around because that is where the future will be written. One last thing folks.. stay away from the distractions like god, guns, and gays!
Andy T commented:
Bingo Markus.
....and don't forget...when all else fails, blame the engineers.
Markus Unread commented:
America's innovation is meaningless without a population that can actually MAKE things. We can, at least temporarily, crank out IP for asian companies to produce and replicate at cut rate prices. After that, as our population get's more and more science, math and technology illiterate, the USA will fall farther into debt. Not just debt but international irrelevance, divisiveness and finger pointing. People will always search for someone to blame before facing the difficult choices.
Andy T commented:
@arclight: you may want to revisit your stats, which are WAAAAAY off...the USA is #21 ( www.nationmaster.com/graph/edu_spe_per_sec_sch_stu_pergdp-per-secondary-school-student-gdp ) ... dismal unless you are sending your kids to private school, in which case you don't care and want to cut the tax-based school funding even further...you're one of those, aren't you?
arclight commented:
There are some good and bad points here.
1. Folks have weighed in on the tax rates as either "too high" or "too low" without providing justification for why they are that way. Taxation is not a single-variable problem, so it's difficult to assign it a single-variable (i.e. too high or too low) rating based on logic. It's very easy to do based on emotion, but we are supposed to be adults and keep our emotions in check. I see no logic in either position.
2. @Andy T.: We already spend more on public education per capita than most nations, and nations spending less per capita produce better-educated children, as evidenced by their performance on standardized tests. How do you justify spending even more on education in this country when other nations are spending less and producing better results?
I'm all for adequate spending in education, but it's got to be effective. Right now it isn't, and hasn't been for a very long time.
The real and sad truth about primary-school and secondary-school education in this country is that it has since about 1965 been another "front" in the ongoing Cold Civil War being waged in this country by partisans of left and right. In their never-ending fight to coerce the country to remold itself to conform to their ideals, those partisans have wrecked far more than public education; however, public education is one of those places where the damage will remain long after the partisans are long since dead. We are now busy destroying the second generation of youngsters in the maw of that great, broken machine.
I used to wish for the day that younger generations would finally frog-march the Baby Boomers off the stage and out to the nursing homes. I realize now that the garbage that so infected the Boomers has now been propagated to their children and grandchildren; if we are given the time, it will take us somewhere around 150 years to finally expiate the rot injected into our society starting in about 1965 (with roots that extend back into the 50s and in some cases back to the 20s and 30s).
Andy T commented:
I'll bite Suzanne. I will argue that US competitiveness in tech is just fine thankyouverymuch - however those empowered to say where innovation is done have chosen to ignore Silicon Valley, Merrimack Valley, and Route 128.
Those of you bringing, or thinking of bringing, partisanship, or left,right, dead-nuts-center, into this debate are clueless.
Otellini and Fiorini are both pirates of the worst kind - buttpirates that are raping the country for its rewards and not returning anything into it to keep it competitive - heck, even alive.
They whine about the taxes they don't pay, yet they have no problem taking a tax deduction against US-only income for the R&D and wages they pay to the jobs they exported to Shanghai - deduction money that comes out of MY US treasury.
Otellini's company, the one bitching about high tax rates in the US, is on the record for paying 24% tax rate the last three quarters - that's combined state and fed rate kids. Can I haz that tax rate?
This is all a whinefest, a headfake, because politicians that have listened to taxpayers like myself, taxpayers whose kids have a curtaile school year because corporations no longer pay their fair share of taxes LIKE THEY USED TO, and are NOW AT THIS VERY MOMENT going after corporate income no matter where it is earned.
And guess what? That TAX rate of 24% that Intel currently pays is on US income ONLY, since no US income is 'realized" or declared for offshored money...the tax rate on total worldwide revenue for a US-based multinational, I'm guessing, is lucky to be single digits.
As a US citizen, I get the privilege of paying taxes on income, even if it's earned on my island in Fiji. Corporations need to be treated the same as individuals....if they think they even have a voice in my government, they damn well better pay its wages.
Fiorina/ Elected? I say, "Nah - just deport the bitch to Shanghai", for being a traitor that is directly contributing to America's demise as a world economic superpower.
"Brainpower" is a euphemism that Fiorina is using to support an asinine and inappropriate H1B program when 15M US citizens and green card holders are UNEMPLOYED. What a blatant insult to American workers and American education....an education system CRIPPLED by her and Otellini's companies dodging of tax payments.
Now, find me an HP employee that disagrees with me. Or better yet, find me an American whose job is threatened by these clowns - you won't, because they are already UNEMPLOYED.
//rant off
Meredith Poor commented:
Crying For Help
This is so bizarre. Microsoft create technology and design centers in India and China, some of which are enormous, and then complains that the US government should spend money that Microsoft won’t spend for the same objective. Duplicated in dozens of other companies, not all of whom are tech firms.
The rationale for this is that companies are profit seeking organizations, and they have to work with the resources at hand. The Feds, of course, are stuck with the same proposition, they don’t manufacture innovators in test tubes. Parents tend to get the luck of the draw, and children tend to regress to the norm, so exceptional talent is distributed at random throughout the world. The US, in the past, was able to attract that talent, but all we’ve done recently is encourage it to go ‘home’.
‘Industry leaders’, of course, play to their stockholders, and what stockholders want to hear is that corporate executives are being ‘responsible’ by asking for the government to throw money at education. The problem with this is that education can be as much of a problem as a solution.
Not everything one learns is in textbooks. The cultural ethos often values conformity (Japan, Continental Europe, South America) and frustrates initiative. This is what kids learn in school. The US, with it’s poor track record in education, sends a somewhat different signal: don’t count on anyone or anything. If you have bad teachers, it’s up to you to figure things out on your own.
As the proportion of the population in college or graduated from college increases, the only given is that college tuition will increase. Were the ever increasing subsidies and supplies of credit to be withdrawn, higher education would retrench, shutting down departments, closing campuses, firing staff, and applying across the board pay reductions. What happens now is they continue to pour money into new buildings, fancier labs, and more exotic technology, which may or may not be lost on the student taking Freshman English.
In comparison to loading trucks or painting the broadside of a barn, it is relatively easy to spend one’s days in an air conditioned building reading books and filling out tests. One would not mistake this kind of activity for improvisation or innovation. The groups of people that do this fit in one of several broad categories: street people, soldiers in combat zones, and entrepreneurs. Often these people have no patience with school.
Economic systems thrive when people are improvising, either to survive or to prosper. The Internet did this: if you weren’t in it you were in danger of going out of business, so it was an opportunity and a threat at the same time. This is more or less a definition of war: people continue to evolve strategies based on accumulating experience. Failure to stay ahead is certain death in the most literal meaning of the term. The entire experience of computerization in the US, starting in the late 1950s, is a similar story.
While 10% of the population is out of work, most of the remaining 90% is not exposed to any immediate threat of annihilation if they don’t change their ways. If you were a retail store in 1995 you were being forced to adapt. If you were a wholesale distributor in the mid-1970s you either automated or died. If you were on a Pacific island in 1943 you thought very carefully about how you were going to survive the experience.
In general, government tends to ‘protect’ people from having to make difficult choices. The last thing industry should be doing is asking for government ‘help’.
Jennifer commented:
Good job Suzanne. You're very brave to mention politicized issue such as employment and competitiveness. The ultra-left which controls the Democrat party doesn't tolerate dissent. They attack and attack until they destroy people's jobs, family, and reputation.
But bringing up important issues is the right thing to do. The tech sector is affected strongly by taxes, tarrifs, and government regulation.
I personally won't vote for anyone who positions themselves as a fiscal conservative without being a social conservative as well. Without the U.S. constitution there is no rule of law but an ever shifting mob rule. Without the social conservative stance of fundamental rights such as free speech, freedom of religion, freedom of assembly, freedom to petition the government for redress of grievances, the right to own property, and the right to trial, we have nothing to base economic policy on and no common goals.
Thanks for writing abou this important topic.















