High Tech, Strangled By the Beltway

[Dave Farber <dave () farber net>]

High Tech, Strangled By the Beltway

By Ken Kay

Saturday, March 13, 2004; Page A19

After 28 years in Washington, I've moved to Tucson. I spent eight years 
working on Capitol Hill and the last two decades representing the interests 
of high-tech companies. I came to Washington looking to get involved in 
thoughtful policymaking. Right now I think there's a lot more of that going 
on outside the Capital Beltway than within.

The current Washington debate on global sourcing is the latest example. The 
trend among companies toward locating service and product development 
abroad is disturbing to many of us as Americans. But the fact is that some 
trends these days are global and simply beyond our control. The strident 
remarks coming from policymakers are likely to lead to little improvement 
in our overall economic situation. In the same way that the Soviets' 
Sputnik satellite woke up the country to the need for math and science 
education, the outsourcing conversation cries out for a constructive, 
long-term solution that ensures Americans have world-class education, a 
world-class workforce and the ability to remain a competitive global leader.

Another area where the Washington debate is more about heat than light is 
export controls. While these outdated regulations are ostensibly designed 
to prevent our most powerful computers from falling into the wrong hands, 
they are largely a fig leaf. They have virtually no impact on the flow of 
raw computing. Their real impact is on U.S. manufacturers who are prevented 
from selling computers worldwide. It's a glaring example of government 
policy that can't keep up with our new high-tech world. Government 
regulations work well for industries that change their formulas every 70 to 
80 years, such as corn flakes or cola. They aren't at all well suited for 
high-tech industries that turn over 80 percent of their product lines every 
18 months.

The same rhetorical flourishes used by those trying to control 
uncontrollable computing are directed toward pornography and intellectual 
property. In fact, proponents know that the regimes are likely to be 
ineffective, because the Internet is a global medium on which purely 
national responses have little impact. U.S. laws by themselves are 
toothless. Policymakers must address the void in our international 
frameworks. It's not clear whether we need an Internet equivalent of the 
Law of the Sea, but we do need comprehensive solutions to global challenges 
when national responses don't work.

Solutions are hard to come by in Washington, though. One of my biggest 
disappointments in my 19-year lobbying career was not being able to get the 
research-and-development tax credit made permanent. Nearly every 
policymaker was for it, but it never got done. The tech industry was 
looking for crispness and clarity of tax policy. Washington functions on 
the spin principle: Widespread recognition equals success. Unfortunately, 
what that often comes down to is that getting things spun is more important 
than getting them done.

To be sure, the high-tech sector is not always a consistent partner with 
government. When I began as executive director of a group of high-tech CEOs 
that I helped to start 14 years ago, one of them said to me, "We'll need to 
bring baseball bats to Washington and bash in some TV sets to get their 
attention." That attitude was representative of a true antipathy for 
government existing in major pockets of the industry.

Today it would be more accurate to describe the high-tech approach to 
government as ambivalent. High-tech wants help in some areas and deplores 
it in others. The tech sector needs to grow up and be clear about the areas 
in which it needs government as a consistent and dependable partner. For 
example, with the global skills race upon us, the computer industry needs 
government to do its part in encouraging investment in technology and 
innovation and in properly educating the U.S. workforce. The information 
technology industry should be clearer about its advocacy of such a 
constructive role for government.

Since moving West, I realize more than ever that those outside the Beltway 
understand the true nature of the evolving global market in a way that no 
one in Washington seems to. The head of economic development for Colorado 
Springs recently named for me the three places he saw as his city's chief 
competitors: They were three comparable cities in India! He said Colorado 
Springs needs policies that will allow its young people to compete with the 
young people of those Indian cities. It was stunning to hear someone from 
the Rocky Mountains get the global challenge better than anyone I had 
talked to inside the Beltway.

The writer is chairman of Infotech Strategies and former executive director 
of the Computer Systems Policy Project.

© 2004 The Washington Post

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