Technology firms and Barack Obama
End of the
silicon honeymoon
The love affair that technology firms had
with America’s president is fading fast
Oct 28th 2010 | SAN FRANCISCO
PASSING through California on a mid-term campaign swing,
Barack Obama made a point of stopping off to see Steve Jobs,
the boss of Apple. He also hob-nobbed with executives from
Google and other Silicon Valley companies. More than any of
his predecessors, Mr Obama likes to pay homage to the titans
of technology. They, in turn, have lavished him with praise
and political donations. But now many tech folk are worrying
out loud that his government is not as serious about
supporting innovation as it purports to be.
The tech crowd thought the latest occupant of the White
House was one of their own. An enigmatic politician with
strong convictions, Mr Obama in many ways resembled the
driven young spirits that venture capitalists love to take a
punt on. [ "take a punt on" ? Can anyone explain
this Britishism ? Sounds like someone is kicking the ball
downfield, which makes no sense in this context ]
And during the presidential campaign he wowed Silicon Valley
with an elevator pitch that envisaged using social media and
other technologies developed there to fashion a new and
radical political order. Everything from Mr Obama’s
addiction to his BlackBerry to his keenness to see maths [
what is with "maths," plual ? "Math," by itself, is
either singular OR plural, the "s" is redundant ]
and science promoted in schools suggested he would be the
most tech-friendly president in history. Small wonder, then,
that the techies swooned over him.
Nor is it surprising that many of them are now starting to
feel badly let down. “There’s a strong feeling that this
government really lacks direction,” says Gary Shapiro, the
head of the Consumer Electronics Association. Many of its
2,000 members, he adds, are unwilling to invest in new
initiatives while there is so much uncertainty about future
policy.
That is a familiar refrain. Michael Splinter, the boss of
Applied Materials, which makes equipment for the
semiconductor industry, is one of several prominent
executives who have called on the government to do far more
to tackle measures that deter investment. Another source of
friction is the reluctance in Washington to reduce hefty
taxes on foreign earnings repatriated to America. As many
American tech firms make a large share of their revenue and
profit outside the country, they are particularly exercised
by the government’s reluctance to lighten this burden.
To make matters worse, tech leaders have been outraged by
Mr Obama’s willingness to demonise employers for outsourcing
work to foreign countries, which is especially popular
within the IT industry, and by his grating sermons on the
evils of corporate greed. “We’re praised for creating jobs,
while being spanked at the same time,” complains Mark Heesen
of the National Venture Capital Association (NVCA), which
represents funds that invest in technology start-ups.
This may seem like sour grapes. After all, the tech
industry has been a big beneficiary of the Obama
administration’s efforts to stabilise [ Can't Brits
ever get spelling right ? As everyone knows, it is
"stabilize"with a "z." ] the economy. The
government is investing over $100 billion to spur innovation
in everything from renewable energy to health-care IT and
electric cars. And it has at least taken some steps which
the tech companies have long been lobbying for, including
appointing a chief technology officer to promote technology
innovations within the federal government, encouraging the
Federal Communications Commission to roll out a national
broadband plan and stepping up efforts to promote science
and engineering skills in schools and colleges.
What about cleantech?
Tech firms and venture capitalists welcome these
initiatives, but are deeply frustrated by a lack of action
in other areas. For instance, many cleantech start-ups and
their backers were betting that Mr Obama would push through
an energy bill that would force America to embrace
alternative sources of energy more aggressively. But that
came a cropper in the Senate.
Entrepreneurs complain bitterly about the government’s
failure to deal with frustrating red tape. Luka Erceg, the
boss of Simbol Materials, a start-up that produces lithium
and other metals from brines and effluent, reckons he has
spent hundreds of thousands of dollars in legal and other
fees applying for funds from the federal stimulus package.
“There is just too much friction in getting capital to
flow,” he says.
Then there is the thorny issue of trade. Some tech firms
accuse the government of failing to put enough effort into
trade agreements that would help to boost their sales. “We
need fair and open markets and that takes a lot of work,”
says John Chen, the chief executive of Sybase, an American
software firm owned by Germany’s SAP. There are also worries
that friction with China over exchange rates and other
issues could damage the interests of American tech firms
which have Chinese subcontractors and factories.
The tech industry is also concerned about the difficulty of
importing skilled labour. [ "labor," cie vous plait
] Tight visa controls on highly qualified
immigrants have been a huge headache for firms such as
Microsoft and IBM. And they infuriate venture capitalists,
who claim the controls are robbing America of
entrepreneurial talent. Demand for visas from skilled
workers dipped during the recession, but it is likely to
become a problem again as the economy recovers.
Here again, Mr Obama has proved to be a disappointment.
Many hoped he would try to convince Congress to separate
skilled people from broader immigration issues, but he has
been reluctant to do so. Might that change after the
mid-terms? Mr Heesen of the NVCA points out that the notion
of making it easier for America to attract the best and
brightest has already won some bipartisan support. John
Kerry, a Democratic senator, and Dick Lugar, a Republican
one, have sponsored a proposal to give visas to some
immigrants keen to start new businesses.
Tech folk have not given up on Mr Obama altogether. The
Valley’s campaign donations to Democrats still greatly
outpace those made to Republican candidates. No doubt they
are hoping that the first “tech president” will at last live
up to their expectations. In a speech in Silicon Valley, Mr
Obama reiterated that he wants to create the conditions in
America that would give rise to the next Google and the next
Hewlett-Packard. But he will have to do much more to
convince the tech industry that he really means it.
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I also wonder what tech people think of BHO gutting
the NASA manned space program since it has produced a
plethora of high tech innovations BR
