A failure to communicate. That’s one phrase that could be used to describe the meeting between tech CEOs and Congress in early August.
From Sundar Pichai of Google and Mark Zuckerberg of Facebook to Jeff Bezos of Amazon and Tim Cook of Apple, the tech giant executives took on questions from members of Congress on a wide range of topics. The tension between Congress and the tech world was clear, as sound bites about data control and monopolization were met with technical explanations and defensiveness.
The lack of results from the hearing shouldn’t come as a surprise. The tech community and the government are different worlds and they typically don’t understand each other.
A tech leader once told me, with the classic arrogance of a tech entrepreneur, that the industry operates under Moore’s Law, but the government seems to operate under Moron’s Law. I worked for the government at that time, and I didn’t necessarily see it that way.
Whether or not the tech leader’s perception was true really didn’t matter. Either way, the failure to communicate between the government and the tech sector was an obstacle that was holding back the American economy and it needed to be fixed. Now more than ever, as the COVID-19 pandemic continues to wreak havoc, this barrier must be broken down for the benefit of both parties.
Innovation is a critical driver of economic growth, and no industry creates more innovation than tech, particularly in the field of electrical engineering. These innovations happen every day, and we often take them for granted. But in the past 25 years or so this kind of innovation has led to one of the greatest periods of prosperity the world has ever seen. And the process continues — magnetic resonance imaging, smart electric grids for power plants are improving efficiencies, and nanomanufacturing are just a few examples of technologies being developed today that have great promise for the future.
Unfortunately, the differences between the tech and government worlds can lead to problems that stall innovation. But there are ways we can bridge this gap.
Getting these two worlds to understand each other, or at least interact with one another effectively, can help companies of all sizes. Many of the biggest companies hire lobbyists who are familiar with the process of getting things done in Washington. But mid-market tech firms in the U.S., including those in the electrical engineering community, tend to be less involved in the process. They are the ones that can benefit most from some tips on how to effectively engage with Capitol Hill, and their involvement is good for the economy.
Small and medium-sized companies are the backbone of the tech sector, and should have just as much influence, if not more, than larger companies.
I founded the Internet Caucus when I was in Congress and I’ve run a major tech association and several startup companies. It has long been my mission to help the government and the tech community understand each other and work together. Here are a few thoughts based on my experience that I think would benefit both the government and the wider EE community:
What the government can do to help tech companies
Leave them Alone. It’s a bit of an overstatement, but the government can’t micromanage this industry. The government simply has no ability to predict the technology of the future or take the risks necessary to find out what does, or doesn’t, work. No matter how many Rhodes Scholars there are in the White House or Congress, they will never be smart enough to tell Bill Gates to drop out of Harvard and remake the software industry.
Clear and Reliable Rules. To the extent the government must get involved, on issues like taxes, education, antitrust, etc., it should adopt clear rules that don’t change with every new Congress or every new President. It doesn’t really matter what the rules are if they are reasonably fair and, above all, predictable, so tech companies can plan for them.
Fund Basic Research. The one proactive thing the government can do is to fund and conduct “science for science’s sake,” i.e., research that simply follows wherever the science leads it, with no commercial or business application in mind. When this research produces interesting results, the tech industry will be more than ready to find and develop commercial uses for it. This is exactly what happened when research at the Defense Department produced the technology that ultimately created the Internet.
Let them Fail. Doing something new involves risk because, by definition, no one knows how it will turn out. Most new companies will fail, and the government should let them fail. It distorts the market and wastes capital to give in to political pressure and rescue companies whose new ideas didn’t work. On the other hand, when the risk works out, the government must let companies succeed and enjoy the financial benefits from taking a big risk and turning out to be right.
What tech companies should do to work with the government
Think About It One Day Per Year. Tech companies have more important things to do than worry about the government. But they can’t just ignore it – they should do the minimum, so they aren’t completely unprepared if something drastic happens. If they focus on it one day a year, or less than one-third of one percent of the time, that’s about the right amount. They should join a trade group like the WTIA or TechNet and at least meet their local officials, their congressmen and Senators, and any key regulators in state and federal government—but do it once a year.
Don’t Let Them Help Too Much. A tech company needs to create something new, move quickly, and adapt as things changes. The government isn’t designed to do any of this, and it can’t really help with innovation iteration. If a company gets on the government’s radar by asking for special help, it will probably get something that is more negative than positive.
Take What is Available. On the other hand, there are many general benefits available to everyone that tech companies don’t take advantage of. This applies in particular to small to mid-sized tech firms in electrical engineering who are working to create new products and systems. A prime example is the R&D tax credit. Many companies leave significant cash on the table by not consulting an expert and maximizing the benefits this credit can provide. The government specifically sets aside these incentives every year to reward and encourage companies who create new products, systems or processes — and by not consulting an expert, many companies end up forgoing tax credits that can often make the innovation work pay for itself.
Stay Away from Big Company Battles. The big tech companies often fall into the trap of trying to use the government as a weapon against their competitors. This is probably unwise even for them, but smaller companies should definitely stay out of these battles. It may make sense to support an industry-wide initiative with the consensus of most parties, but it usually doesn’t make sense to side with one group of big guys against the other.
About the Author
Rick White is the Former U.S. Congressman & CEO of Technet. As a member of alliantgroup’s Strategic Advisory Board, White works with firm leadership to execute on strategic initiatives for the benefit of American small and medium sized technology firms. White uses his incredible experience as a policymaker and technology advocate to help the firm educate these businesses on how to leverage a multitude of tax benefits that are often underused.