Why Obama 2.0 Is Good for Innovation
October 23, 2012
This is an important election for all Americans, but especially for those of us in the tech community since decisions we make in November will impact the state of American innovation both in the short-term and for years to come.
On the one hand there is President Obama, who may be the most tech-oriented president in history, having established the position of U.S. Chief Technology Officer on his first day in office while also adding a Cyber Command at the Pentagon and launching the Startup America initiative. Obama’s challenger is former Massachusetts Governor Mitt Romney whose experience with Bain Capital has some appeal to tech executives.
The two have clear differences when it comes to the government’s role in innovation. Governor Romney takes an ideological view that “government does not create jobs” period, end of discussion. That may have appeal as a slogan but it is a view that simply is not supported by history.
A recent study by the Breakthrough Institute reviewed the role of government in critical technological breakthroughs from the railroads to the Internet and found that “government support was critical… in the development and deployment of these technologies.”
President Obama believes that the government has a role in stimulating the economy and creating jobs and his stimulus plan did just that, adding or saving 3.3 million jobs according to the Congressional Budget Office. Tech executives might have heard how one city used $112 million in stimulus grants to leapfrog over the rest of the nation and become the fastest Internet city in the country at 1 GB per second. The roll-out of this new capability has led businesses to relocate there and even venture capital firms are traveling from Silicon Valley to Chattanooga, Tenn. to take advantage of this ultra-broadband capability.
The Chattanooga grant was just part of $7 billion in stimulus funds spent on broadband initiatives. The president has been aggressive in promoting broadband deployment, which grew from 92 to 94 percent in his first two years in office, a significant jump considering that a recent study found that each percent increase is estimated to increase employment by 300,000 jobs.
Tech leaders frequently express concern about the need for more graduates in the areas of science, technology, engineering and mathematics (STEM) and called for reforms in education and immigration to address this. President Obama has doubled funding for Pell Grants for college students and has changed immigration rules to make it easier for STEM graduates to stay in the United States.
In addition, anti-competitive practices can frustrate and stifle innovation. President Obama has moved forward with net neutrality regulations designed to prevent Internet providers from stifling innovation by discriminating against applications or content, which the Republicans in Congress vehemently opposed.
In comparison, Governor Romney offers a proven economic plan with his 20 percent across the board tax cut. The only problem is that it has been proven to be a failure, as under President George W. Bush such tax cuts yielded very few jobs and left us with a substantial deficit. President Reagan’s budget director, David Stockman calls the $5 trillion Romney-Ryan plan a “fairy tale” that will “do nothing to reverse the nation’s economic decline and arrest its fiscal collapse.”
Like every Republican nominee since Reagan, Romney hopes to seduce voters based on the chimera of painless tax cuts. The reality is that like every “free lunch,” the Romney “fairy tale” ultimately is paid for somehow. In this case it will mean slashing funding for education, research and others areas vital to innovation and economic development. Just as Ronald Reagan’s tax cuts were followed by multiple tax increases by Reagan, President George H. Bush and President Clinton to reverse the fiscal hemorrhaging, the Bush-Romney tax cuts will eventually have to be paid for by all of us.
Governor Romney has also stressed his disagreement with Obama’s promotion of green technology and put forth an energy plan that is a return to the fossil fuel-driven approach of the Bush administration. While not only is this likely to be bad for the environment, but it will cede U.S, leadership in this emerging sector to China, Germany and India, and stall a rapidly growing segment of the job market.
It is said that innovation is the ability to see change as an opportunity and not a threat. President Obama came into office as the nation teetered toward depression and set a new course that emphasized and rewarded technological innovation. Romney, on the other hand, wants to return to the false comfort of the past. Obama’s efforts are starting to bear fruit, while the wreckage of Romney’s approach lay all around us.