What Should Obama Do?
With the fate of U.S economy in the hands of new administration, industry veterans believe it is time for [...]
January 23 2009 by Fayazuddin A. Shirazi
With the fate of U.S economy in the hands of new administration, industry veterans believe it is time for the new setup to take certain bold decisions to bolster the ailing US economy. Economists are of the opinion that President Obama must encourage an environment which can get American economy back on its track. “Obama must return America to a time which spawned HP, Microsoft, Intel, Dell, Wang, DEC, Apple, Compaq, Cisco, Sun, and many other great companies,” feels Forrester Research Chairman and CEO George F Colony.
In a straight advisory blog posting – “How Can Obama Stimulate the tech economy” – addressed to President Obama, Colony, who believes tech spending correlates closely with GDP growth, says that the new president should build an environment in which the new Steve Jobs and the new Bill Gates and the new Ken Olsen can easily and quickly start companies and not be instantly absorbed or destroyed by the big guys or bogged down by regulation.
Writing for his blog – Counter Intuitive – Colony details how Obama’s predecessors generated healthy competition in tech markets by taking some strong actions. “The new government must take steps that increase competition in tech markets. Nixon charged IBM with anti-trust — ushering competition in the independent software and plug-compatible hardware businesses. Reagan presided over the breakup of AT&T — setting the stage for massive innovation in telecommunications,” Colony writes.
According to Colony Obama should also consider scrapping Sarbanes Oxley; which he says has ruthlessly increased cost and bureaucracy for small tech companies. He says by reforming or eliminating SOX, small companies can do the required reporting at a much lesser cost than it is now.
“Obama needs to reduce regulatory friction by reforming or eliminating Sarbanes Oxley. He should get the accounting profession to reconsider its rules around stock options accounting — non-expensed options were a big part of tech’s golden years. Streamline required reporting so small companies can do it cheaply and quickly,” he says.
Citing further instances on how the new administration can better the economic prospects, Colony urges Obama to enlarge a few of the existing federal government projects that will enhance innovations in technology. “In the 1950s, the building of NORAD spawned the minicomputer business. The Apollo space program of the 1960s fertilized Silicon Valley with people and transistors — ultimately enabling the PC business. And the Arpanet and Milnet of the 1970′s and 1980′s lay the groundwork for the Internet and the Web,” explains Colony.
Colony strongly advocates the need to encourage American businesses to reach out and be included in as many innovation networks as possible, as he believes future technology innovation is open networks driven. “Don’t construct barriers around the U.S. – encourage American businesses to reach out and be included in as many innovation networks as possible — wherever they may be. Innovation is no longer confined behind the four walls of a company or the borders of a country — future technology innovation will be driven by open networks, not skunk works,” reiterates Colony.
Interestingly, Team Obama also wants to make the deployment of broadband Internet networks part of a sweeping stimulus package that it hopes would create new jobs, update the nation’s hospitals, schools and other facilities, and lift the United States out of recession. IBM has briefed the Obama transition team on possible ideas to stimulate the economy. It has proposed a $30 billion plan that would create 949,000 U.S. jobs. IBM estimates that in one-year, $10 billion investment in broadband networks would create almost 500,000 new positions. However, experts point out the real challenge would be to protect and maintain net neutrality.
“In formulating its broadband policy for the United States, the incoming administration ultimately must address the thorny issue of network neutrality. As a recap, private network providers such as Verizon, AT&T and Comcast would like to monitor and control the content that rides across their broadband networks, prompting fears in the content community that the network operators would give preference to their own bits flowing across the network,” a report published in Fortune Magazine said.
Colony calls upon Team Obama to swiftly resist lobbying and keep tech open and available to the public. He says net neutrality should be protected as most of the start-ups need open systems to thrive. “Believe in technology and be a role model to all CEOs and U.S. leaders. Don’t let the bastards take your Blackberry away — it’s a powerful symbol,” Colony remarks. So the target, he says for Obama is: “In eight years 1,000 tech start-ups and 100 tech IPOs.”