Silicon Valley’s second-term wish list
By Vivek Wadhwa,
Silicon Valley contributed more to President Barack Obama’s re-election campaign than Wall Street and Hollywood, according to a Nov. 3 San Francisco Chronicle report. The Valley contributed $14.7 million compared to $14.5 million from New York City and $6.3 million from the Beverly Hills crowd. The data were compiled for the Chronicle by the nonpartisan organization MapLight.org. During his many trips to Silicon Valley, the President made a number of promises. Now that he has won, the Valley expects him to keep his end of the bargain.
I asked several notable people in Silicon Valley what they want from Congress and Obama’s second-term administration. The tech moguls I spoke to or exchanged e-mails with include Marc Andreesen, Paul Graham, Heidi Roizen, Ron Conway, Vinod Khosla, Carl Bass, Dan’l Lewin and Jason Calacanis. The bloggers who gave me feedback include Eric Eldon, Dan Lyons, and Om Malik. And I spoke to several of my colleagues at Stanford Law School including Joe Grundfest, Mariano-Florentino Cuellar, and Dan Siciliano. Here, Mr. President, is their wish list:
1.Immigration reform. First and foremost, the technology world finds itself starved for talent. Andreesen, Conway and Graham all expressed the sentiment that if the Valley had only one wish, it would be for more visas for skilled workers from abroad. The Valley needs more H-1B visas to help grow its tech companies. And there is the need for a Startup Visa to allow foreign entrepreneurs to start new companies in the United States. Graham first proposed such a visa in 2009.
2.Education. Californians just voted for a tax increase to fund education. This was a marked change from the tax revolt of 1978, when they voted to limit property taxes. The Valley recognizes the importance of K-12 education, but it also wants to reform and improve the education system, reign in the escalating cost of higher education, and experiment with new models. After all, technology being developed in the Valley is making it possible to change the way we teach and to transform the education system.
3.Freedom and competition. Earlier this year, Silicon Valley raised its voice through social media to stop two ill-defined anti-piracy bills. The Valley wants an open Internet, and it wants competition in broadband so Americans can get better and cheaper connectivity. Without these, “we lose the battle of the future,” said Malik, founder and senior writer for GigaOm, via an e-mail. “Currently, the telecom and cable companies have created a cozy duopoly, and [Obama] and the rest of Washington, D.C. are highly compromised. Thanks to their contributions to the political parties, there is not even a modicum of competition in telecom/broadband markets.”
4.Invest in sustainable renewable energy solutions. True, the government’s investment in Solyndra was a disaster. But Uncle Sam could have spurred a lot more innovation by placing small bets on 100 companies instead of $500 million on a single company, which is how Silicon Valley works. Valley investors take risks by investing in a broad range of promising technologies and double down when they show promise. The government needs to keep investing in energy, but wisely.
5. Abolish software patents. Legal battles over patents dominate the tech industry headlines. It’s not only Apple-versus-Samsung — smaller technology companies are frequently being trampled by patent trolls. As I’ve explained before, because of flaws in the patent system and government leaders’ misunderstandings, there is an arms race of sorts happening in the tech industry, which is sapping billions out of the economy and crushing technology startups. The larger technology companies have invested fortunes in their patent portfolios. But senior executives have said to me privately that they would rather disarm than waste the time and money they presently do on patent wars.
6.Fund basic research and improve research commercialization. Some of the greatest innovations of our time, such as the Internet have their roots in academic research. We need to not only invest in this research, but to strengthen the pipeline for commercializing it.
7.Rewards for investments in innovative startups. The current capital gains system rewards relatively short-term investments. In fields such as biotech, it sometimes takes a decade for investments to bear fruit. Calcanis, a noted Web entrepreneur, wants capital gains rates to drop to zero after a certain number of years. Malik, meanwhile, suggests an “innovation incentive,” so that for every new product invented by a company that creates, let’s say, 100 jobs, the company gets a tax break.
All told, the Valley’s academics and entrepreneurs want what the rest of the nation wants: thoughtful economic policy. Stanford Law’s Grundfest asks for “a sensible balance between revenue enhancement and entitlement reduction that puts the nation on responsible glide path to a manageable level of federal and state debt.” Roizen, a venture capitalist, says “it really is all about the economy. Our entrepreneurial engine can only fuel recovery if it is built on a firm base of rational fiscal policy.”
Congratulations, Mr. President, and good luck.