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Why Silicon Valley needs to go to Washington

Smith in Washington
Silicon Valley technologists and entrepreneurs tend to be way too insular, focused tightly on their own ventures and caring little about politics in Washington, DC.

We need to start caring, because Washington's policy will really impact us. Silicon Valley has the most dynamic economy in the world, and so ensuring an open global economy is in our best interest. We know we can excel on a level playing field.

Now China's Ministry of Commerce refusing to approve a bid (sub required) by the Carlyle Group -- a major private equity firm that has made many investments in technology and has offices in San Francisco -- for China's Xuzhou Construction Machinery Group. It is China's largest producer of construction equipment.

The Chinese move comes, of course, after U.S. lawmakers, in a frenzy of fear about foreign ownership of U.S. assets, put the kibosh on a bid by a Dubai company to acquire P&O Ports, which controls six U.S. ports. And after similar fears derailed a bid last year by China's CNOOC to acquire Unocal, a U.S. oil company.

Our actions make it much easier for foreign governments to start taking protectionist measures. Already, our companies like Google, Yahoo and others are getting hit by China, and now other countries like India are beginning to moan about various things, and calling for international regulations on what Google can and can not do. If they call for such talks, we should respond constructively. Otherwise, we'll be left in the cold. None of this is easy. Moves like Google to finally boost their lobbying efforts in Washington (scroll down) are important, but in our view should have happened long ago.

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From: The 463: Inside Tech Policy
Go to Washington or Whither
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I meant "wither" in the trackbacked headline, of course. Do'h.

But, as to the point of that post, most of the more established tech firms have been involved in Washington outreach for years now. Is this creating a policy-divide that might cause a competitive disadvantage to the emerging Web 2.0 companies?

Sean Garrett on March 31, 2006 9:36 AM
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Sure, Silicon Valley needs lobbyists, but China's nixing of the Carlyle Group might not be the best example to use while pushing that point.

Carlyle is indeed a "major private equity firm," but it's one that's pretty heavily invested in defense, and with connections to past U.S. presidents and assorted officials, it doesn't seem surprising at all that China would balk at a deal. How many companies counseled by former Chinese premiers would the US allow to bid on KBR?

Ryan on March 31, 2006 9:56 AM
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Good point Ryan. But it goes beyond Carlyle. Look at Apple in France, the lists goes on. The less sensitive Washington is in international policy, and the more protectionist it is, the more other countries will feel justified in slapping their own legislation on our companies. That is not in our interest, b/c we have better knowledge/technology (in general, of course not in every case), and do best on the level playing field. Sure, big tech companies have their own lobbying efforts in Washington. But they seem siloed. How do we generate a larger awareness here, and a voice here, to leverage our economic clout in a more constructive way? There are Silicon Valley industry lobby groups like TechNet, but they don't seem to be as visible, or as widely supported as they could be...

Matt Marshall on March 31, 2006 10:05 AM
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My firm works with TechNet so take this comment with that grain of salt...

The reality is that there is more engagement by Silicon Valley companies than ever in Washington. There are innumerable trade groups; many ad hoc efforts and countless individual lobbying efforts.

And, TechNet is taking a lead and working with others on immigration issues, R&D funding, giving greater priority to math and scien Point well taken.ce education, support for an expansion of eHealth technology, greater broadband deployment, etc.

There also are good numbers of events with policymakers for political candidates put on by TechNet and other tech groups every month.

The irony is that six or seven years ago, the industry was accused of being all big political talk and pronouncements and of having little actionable substance in day-to-day Washingon happenings. Now, lots is happening behind the scenes in DC and the hard work of policy enagagement is getting done, but perhaps we need to do a better job in highlighting this and putting into a big picture context to create even more support and involvement from other companies (especially newer ones).

There's a whole new generation of tech companies that shouldn't have to go through the same policy baptismal process as the companies of 1997 did.

Sean Garrett on March 31, 2006 10:57 AM
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