Tech politics and the 'Governator'

SACRAMENTO, Calif.--A few hours after Arnold Schwarzenegger took office here last week, the state's technology industry, as represented by the TechNet policy group, held its own private welcoming ceremony in a private club across from the capital building.

Notably absent: any top-rung Silicon Valley CEOs--and the muscle-clad new governor himself.

In the cracked-mirror world of politics, this wasn't necessarily a bad thing. Top staffers from each side were there, sipping drinks and eating jumbo shrimp with cocktail sauce, forming relationships that need to deepen if tech companies are to work closely with the new administration. But if the conspicuous dearth of the two groups' bigwigs from this TechNet gathering is telling of future such bridge-building efforts, the technology industry and California itself will have lost a unique merger opportunity.

Schwarzenegger's election win, paradoxically, gives Silicon Valley a chance to grow up politically.

Technology companies and executives have a bigger chance than ever before to help form the backbone of an administration trying to dig the state out of a fiscal and political hole.

The celebrity governor comes in as more of a political blank slate than any predecessor in recent history. Technology companies and executives have a bigger chance than ever before to help form the backbone of an administration trying to dig the state out of a fiscal and political hole.

The technology industry has traded on a combination of star power and apathy for the last half-decade of its political life--an improvement from an almost complete disengagement previously but still not the hallmark of a mature industry. The few executives who have participated actively and consistently in policy debates are exceptions.

Tech's perpetual disengagement from the tools of government has been in part ideological and in part practical. Many entrepreneurs are too focused on the constant crises of "business building" to spend resources or thought on Sacramento or Washington, D.C. The old maxim that government moves too slowly to keep up with the pace of technological innovation is usually true. And young industries have less to protect, unlike the older steel or textile industries so powerful in legislative circles.

But those aren't good excuses anymore. There have been too many signs that government matters, from antitrust cases and copyright legislation to the tax and regulation policies executives such as Intel's Craig Barrett say are driving companies out of California and out of the United States.

That's where Schwarzenegger comes in. He's already reached out to the tech industry to help him form his own opinions, starting with putting Hewlett-Packard CEO Carly Fiorina on his transition team.

A few weeks ago, he came to a TechNet board meeting in Silicon Valley, and it was there that the real connection started to take place.

Fiorina told him that California was the last place on earth where her company would expand.

Attendees said he told the group about selling ice cream as a child (establishing his entrepreneurial bona fides), along with the work he'd done branding and marketing his own image as a body builder and actor. Savvy marketing heads nodded in recognition of a semi-kindred spirit.

Executives gave a little show-and-tell apropos their priorities--reinstatement of the manufacturers' tax credit and tort reform, for example. Fiorina told him that California was the last place on earth where her company would expand. He went away, and TechNet staffers say he left them with the idea that his administration would keep an open-door policy for them.

That's fine and good, but if Silicon Valley is to play the role it deserves as the catalyst for growth in California--and the rest of the United States--executives and companies need to play a more active role by doing more than just lobbying for marginal improvements in tax policy.

The history of Los Angeles, troubled as it is, provides a model. Throughout its history, city government and top business interests have periodically worked together to revitalize the downtown area or reinvent the city's image. That's admittedly had a checkered record of success at best, but Silicon Valley companies should nevertheless take a page from that book.

Whatever the dire warnings of Barrett and Fiorina, tech isn't leaving Silicon Valley or California any more than Hollywood is leaving Los Angeles. There are too many pluses here: critical masses of skilled employees, university facility access, proximity to Asian business markets and a simple quality of life, to name a few.

That means that Silicon Valley companies should stop complaining and start engaging. They are citizens of California and the United States, no matter if they have workers and factories overseas. Budget shortfalls in the tens of billions of dollars mean less money is going toward local roads, public schools, police departments and other services on which technology employees and companies depend.

Schwarzenegger has staked his nascent political life on the ability to revitalize a California beset with crippling financial difficulties. Technology companies and executives should be deeply involved in helping him craft plans that go beyond shaving a few dollars off their own manufacturing costs, looking at how the state--and from there, the country--can avoid blowups in education, health care policy and other areas that ultimately affect everyone.

And who knows, there might even be fringe benefits. Technology companies and Hollywood have been at odds for years now over the conflict between copyright protection and high-tech ways of copying movies and music. Maybe Schwarzenegger's weird administration can be a bridge between the two, allowing Silicon Valley and Hollywood to work together on projects that affect both of them.

Either way, it's time for Silicon Valley executives to be visionaries in earnest and help create something bigger than the next fast microchip.