Nine years ago, I was seated at a long dinner table in a rather nice home in Santa Fe. Around the table were Cyrix's executive staff and board of directors, which included Jack Kemp, quarterback and politician extraordinaire. Jack, who can really work a room, eventually turned the conversation to politics. The question put to the table was whom did we like in the upcoming Republican primaries and why.
I instantly panicked. I didn't even know who the candidates were. Not that I was a Democrat; I just didn't care much about politics. I'd always thought presidential elections were kind of like beauty contests that also affected my tax rate. Thankfully, the inquisition went the opposite way around the table; by the time it came around to me, I was able to fudge a pretty good answer.
I know it's sacrilege to be a political atheist, but I ask you, with respect to the tech industry, does it really matter who wins in November? Now, I'm not talking about issues like human rights, women's reproductive rights and the war on terror. I'm talking about tax rates, stock option>expensing and the war on outsourcing.
As a longtime Silicon Valley executive, my view on tax rates is as subjective as it is predictable. Likewise for stock options, but I would add that if intellectual property is the flywheel of our technology leadership, then stock options are its grease. And stock options play a critical role in keeping technology jobs on our soil, which leads us to a key issue of the campaign: outsourcing jobs overseas.
I'm sure this won't help my approval ratings, but I don't think outsourcing jobs overseas is a bad thing for the tech industry. Here's why: In 1980, I was a young engineer driving my first and last brand-new American car. What happened next is automotive history. Japanese car manufacturers outpaced their U.S. counterparts, who blew a gasket over the offshore competition, and the feds responded by levying import duties.
So, when I bought my first Japanese car in 1981 it cost $3,000 more than I should have paid but I still bought it. I wasn't alone. The feds eventually removed the duties, allowing economics to run its course. Without the safety net, U.S. automakers were forced to do something unthinkable make better cars.
Likewise, when National Semiconductor started manufacturing overseas, and the Japanese threatened our semiconductor leadership, many thought the end was near. But that's not the way it turned out. We're still leaders in chips and we survived the move to offshore manufacturing. The point is that overseas competition can be a wake-up call that brings positive change.
The moral of the story is that federal sanctions will not significantly change the economics of outsourcing, our industry's reaction or the end result. Moreover, outsourcing non-differentiated or non-core engineering functions to mitigate the peaks and valleys of our economic cycles will not materially affect our industry; failing to develop and protect the technologies that will drive our future growth, such as biotech, nanotech and fuel cells, will.
Our industry's future is to drive the knowledge-based economy; candidates and legislation that will enable and protect that future are absolutely worthy of our political activism.
Steve Tobak can be reached at email@example.com.