Case, Cerf & Edelman: Keeping America Innovative

Session Description:
The federal government’s role in spawning the Internet age is unquestioned, but that role is much different today, as government steps back and the pace of business innovation accelerates. Can leaders of tech, business and government collectively work together to insure that conditions for invention and innovation remain strong?
Kirkpatrick: I’m joined onstage by three extremely eminent and appropriate people to start the day. And I’m going to start from the far side: Steve Case, who, being here is really important and meaningful to us at Techonomy, because Steve’s been part of our discussions quite a few times at Techonomy, and I think really represents a unique person in the country because you’re kind of like the biggest Internet celebrity in the Washington area. And you have made a longstanding commitment to nonpartisan advocacy for the power of technology in government and governance. And so I thank you for that, and I’m really glad you’re here. I don’t think you need to be introduced beyond that. He runs Revolution now. Of course, he ran AOL and created it into a monster back in the day.
Next to him, David Edelman from the White House, who is a special assistant to the President for economic and technology policy. David got involved in tech because he was an expect in Korean nuclear weapons negotiations. And that led him, when he was in the State Department, to become interested in Korean cyberhacking, and one thing led to another and now he’s involved in provision of broadband in America. Anyway.
Edelman: Couple of steps in between there.
Kirkpatrick: But, you know, it all fits together somehow. And finally, Vint Cerf, one of the great eminences of tech. Vint is one of the people who literally created the Internet. And chief Internet evangelist at Google is his official title.
I wanted to start with Steve. You know, when you think about keeping America competitive and the way technology intersects with government, what do you think are the urgent issues we all ought to be focusing on?
Case: Well, I think there are a lot. I think it’s great that you’re bringing Techonomy to D.C. to kind of kick-start that discussion, or accelerate that discussion. I think number one is, I think we have the opportunity to remain the most innovative entrepreneurial nation, but it’s not guaranteed. There are a lot of countries that have figured out, sort of, the “secret sauce”—the power of the American story that led to its rise over the last 250 years—is innovation and entrepreneurship. So we need to do some things there. Some things have happened, but more things need to happen.
And we need to recognize—and your intro, I think, did a good job of this—that the next wave of the Internet is going to require more dialogue, more partnership. I think this last wave has been more of a go-it-alone app-centric kind of focus, and I think the next wave is going to require entrepreneurs to partner more: both with large companies because some of these sectors ripe for disruption are going to need that kind of connection with some of the incumbents; and also partner more with government: have a genuine dialogue around policy. Because these issues are tricky and we’re not going to get them right unless we have a real discussion, as opposed to everybody kind of focusing on their simplistic talking points—or, as you say, the tech industry just showing up periodically to lobby for specific issues in their self-interest, as opposed to things more in the broader national interest.
So I think it requires recognizing how we got here as a nation and why we need to continue to kind of double down on entrepreneurship. And recognizing where we’re going is going to require a different kind of mindset around entrepreneurship: a different kind of mindset around how large businesses and government connect with entrepreneurs. If we get it right, I think it’s a huge opportunity. If we get it wrong, I think we will lose our edge, lose our way, and 50 years from now be saying, “What happened here? How did we lose the momentum we had? We were kind of asleep at the wheel.”
Kirkpatrick: What’s your general prognosis about how likely we might be to get it right, or to lose our way?
Case: Well, I’m an entrepreneur, so entrepreneurs are always optimistic. The glass is always half full, not half empty. And I think if people—I’m sure a lot of people attending a conference like this do understand the importance of it, do care about it. I think if people really do engage, I think we can get it right. But it requires that kind of focus, and passion, and persistence. Because these are complicated issues, and the process of getting clarity regarding the problems as well as the opportunities—and clarity regarding solutions—is part of it. It’s even more difficult to then figure out a way to knit together coalitions of the willing to actually get stuff done, particularly if it requires congressional approval. But that’s going to be required if we’re going to have the right framework for this next third wave of the Internet.
Kirkpatrick: Great, thanks. David, summarize a little bit about how you think about this and how the White House thinks about this. It seems like the executive branch has been quite a bit ahead of Congress in some of these matters, which is admirable. But then again, you know, we have a long way to go. What’s your general perspective?
Edelman: Sure. I mean, first of all, thank you for that. We try to pace ourselves ahead of Congress at every possible opportunity.
You know, this is an issue that has, for the White House, I think emanated from the top on down. I started in government in the Bush Administration, and over the course of even just ten years, there has been a tremendous revolution in how technology issues are seen and the way in which they are considered as part of the broader public policy ethos. What I mean by that is, you know, it used to be, when I first started in government, convincing senior policymakers that technology could possibly matter, that the Internet was important for the future—whether it was of the State Department, where I was at, whether it was of the Defense Department and our national security. There were those sounding the alarm and there were those trying to speak the language, but there was not a recognition at the senior level that this was something that was essential to our public policy moving forward. I think there was a sense that it was important to our economic competitiveness, but even that was sort of an early sense.
The difference I would say is that today, technology is no longer an acceptably foreign language to senior officials in the government. You know, you don’t hear cabinet officials in the Administration, or anywhere else for that matter, say, “Well, you know, I just don’t really understand economics. You know, I’m just not really an economics guy.” You don’t hear that, because to not get economics would be to not get one of the core pillars of what we’re doing in public policy. And I think increasingly, the same is true of technology. I think for any incoming cabinet official, and really among the whole senior team in the Administration, you either need to have an understanding of technology or know enough to know what you don’t know and surround yourself, in your inner circle, with those that really do.
And so, as I’ve seen this issue transform from one in which there were a small number of us—and I was the State Department’s first hire from the outside to do technology pretty much ever—o have that be an issue that was esoteric and foreign, to one where now we’re not only able to take this on at a very senior level—I mean I think the number of cabinet meetings, deputies committee meetings that are focusing on technology issues went from one in a blue moon to one a week, two a week, three a week. I mean this is just at the very center of things that we’re focusing on.
Kirkpatrick: So it comes up almost every meeting, is that what you’re saying?
Edelman: I think it absolutely does. But it’s also important that we’ve been able to recruit people who matter. I mean you talked before about Megan Smith. We had just recently hired the co-founder of Twitter to run the White House digital apparatus. And the list goes on and on. You know, it’s a two-way street, that we’ve been able to focus more on these issues, develop more of a farm team and internal expertise, but also elevate their importance. So we’re not starting from first principles. And I have to say, just in my own personal experience, I really do think that emanates from the top. You know, in our case, we’re very lucky to have a President who really gets technology, who uses it, who I think from the campaign has spoken very personally about what technology means for social movements—in his case, his own campaign. And I think you saw that carry on through in some of the technology policies that we’ve been working on. And certainly I could talk more in depth about some of the details.
Kirkpatrick: Yes, I want to pursue a little bit more on that. But that’s impressive. And I want you to talk, before we finish, about some of the specific initiatives you’re working on.
Edelman: Sure.
Kirkpatrick: Although, I guess, if you don’t mind, I want to push back on one thing before we go, because the President was elected in large part because of technology tools and social media. Facebook in particular was highly important in his first campaign. But it was widely felt among the world that once he was in office, he did not take advantage of those same tools in governing that he did to get elected. Any comment?
Edelman: Well, you know, I don’t want to speak for the communications folks. Because I think a lot of that perception comes from the perception of whether or not the President was engaging with social media, engaging with these technologies in a way to communicate with the outside world. And that’s not my space. I’m a policy guy fundamentally. But I do think it is true that the rules of social media, the rules of engagement change a lot when you get on the inside. I mean anyone who follows a Twitter stream sees that—
Kirkpatrick: They seem more threatening when you get on the inside.
Edelman: Well, there’s a sense of stream of consciousness, right? There’s a willingness to be freely out, commenting on things as they happen. And there is a certain—and I think an appropriate—obligation that accompanies public service, that accompanies whether you’re a regulator or whether you’re the President of the United States, that your errant thoughts matter a great deal. And whether the result of that is being overprotective from a communications standpoint—and I think many people would say that the President felt he might have been overprotected early on—to now where I think there’s been a real effort, in part by hiring Jason and others, to engage more in a freely unscripted way. I mean, look, it took six years for the President to get his own Twitter handle that was his own. And yet, now we’re at a place that that kind of engagement is happening.
I think from the policy side, we saw it behind the scenes. I think that recognition was there. But, you know, I’ll be the first to admit that I think in communicating the way in which technology policy happens inside the government, trying to map that onto the world in which the technology world is used to communicating has been a perennial challenge for us.
Kirkpatrick: Okay. And I’ll just give you a quick tip of the hat—before we get to Vint. Talk quickly about the We the People platform, because that does actually go to my exact critique, although it’s a quite recent development.
Edelman: Yes. So here’s a great example of a way in which digital tools actually effected social change on a policy issue. So many of you may be familiar with the We the People platform. This is the online petition platform at the White House—
Kirkpatrick: Which started when?
Edelman: It started early in the Administration. I think it must’ve been three, four years ago or so. And that platform had a similar premise. You get—then it was 10,000; now the threshold’s been raised to 100,000—people to sign a petition and you’re guaranteed a response by the Administration at some point in time. And one of the issues that was absolutely not at the top of the radar screen for any of us in policy, but should have been, was one of cellphone unlocking. Do you guys remember this whole thing? We were talking earlier about the copyright laws and the expanding creep of copyright into places that occasionally it doesn’t even mean to be. And one of these cases is that, through the incredible intricacies of copyright law, for a brief period of time it reverted to be illegal to unlock your cellphone to move it to a different network. I won’t go into the details of how. It has to do with the Library of Congress and this exceptions proceeding. But the issue is that this was a huge public issue that suddenly individuals were saying, “Wait a minute, I’m a criminal for going to the corner store and getting my cellphone unlocked, even though I’m out of contract, I’ve paid for my phone and now I want to”—you know, how fundamentally—
Kirkpatrick: Who does own that phone, by the way? Yes, right.
Edelman: Deeper question. But fundamentally, it is so inherently American to want to take your technology, take your business wherever suits you best. And so there was a petition on the White House platform, immediately hit the threshold—I think it was 100,000, and we owed them a response. And this was a classic case of, you know, this came across my desk the day before it hit threshold. Our digital guy said, “Look, this is about to happen. We’re going to owe them a response.” And instead of just sitting on it and thinking, “Okay, well that’s very nice. We’ll see when we get to IP policy,” we took it on. And this is a case where government really can move quickly. We held, I think, it was three meetings—two of them were over the phone—and we took a whole poll of the inter-agency at the deputy secretary level and said, “Does anyone have a problem with us articulating a position that is—we agree with petitioners. We think this is crazy.” And more than that: actually articulating, Here are the three steps that we think are necessary to fix this problem. One, this can happen at industry. Two, the FCC can regulate it and make sure that carriers can’t have these undue regulations themselves that prevent people from switching. And three, Congress can change the damn law so that there isn’t this completely unnecessary case where cellphone unlocking is illegal.
Well, we posted that about—I think it was maybe two weeks after it crossed threshold, which in government is light speed. And we published that policy. That actually created a snowball of press attention. We were on the front page of pretty much every outlet, all over social media, and—lo and behold, two weeks later four bills were introduced in Congress to change this. Industry came knocking, emailed us and said, “Look, we don’t want to prevent people from switching. We get a lot of our business from switching.” And they actually said they want to come up with an opportunity for them to commit, in a public enforceable way, to have transparent unlocking policies. And then the FCC got involved as well. All of that happened because there was a petition on the White House website and we were able to articulate a way forward that people rushed towards.
Kirkpatrick: And the law finally happened how long after the petition?
Edelman: So the law was passed August of last year. And so it was one of—a friend of mine on the Hill who worked on it said—I’d have to verify this fact. I think he said it was one of five substantive pieces of non-appropriations legislation passed by the last Congress. Which is not encouraging, to be clear.
Kirkpatrick: But it was within months of the petition.
Edelman: It was. You know, considering the pace of legislative change that we’re in right now, it was incredibly fast.
Kirkpatrick: Okay. Vint—
Cerf: Before you ask, I have some reactions to some of these—
Kirkpatrick: You can say anything you want. I was just pointing to you to say whatever.
Edelman: We’re all here because of you, so.
Kirkpatrick: That’s true, to some extent.
Cerf: Well, it’s not just because of me. It’s because of a lot of people who decided they wanted to make the Internet happen. I just got lucky that—you know, it’s like the Tom Sawyer thing, you know, where he’s painting the fence and he gets a bunch of other people to paint it for him because he says it’s fun. Well, we got lucky and a lot of other people decided it was fun.
First point, lesson, from what he just said, freedom of choice is probably the most important policy we can adopt and remember in this government and in this country.
Kirkpatrick: About almost everything.
Cerf: About almost everything, that’s exactly right. So that’s point number one.
Second, with regard to awareness of technology in government, this is a self-solving problem, because over time younger generations will become part of the government just like you have, and so they will have experienced the technology and know something about it just by simply being younger. And so that will help. It’s not necessarily that we shouldn’t do things now to accelerate the process, but it’s a self-fixing problem.
Third, you mentioned biotech and your interest in that. I’m going to suggest that the session that you do on that be called “DNA Meets DNS.”
Kirkpatrick: Great. I love that.
Cerf: I tried to do that back around 1999, when Hillary [Clinton] was doing the Millennium Evenings, and they said it was too geeky so they didn’t do that. But I think that you guys would get it.
Kirkpatrick: Someone write it down.
Case: It is a little geeky though, let’s be honest.
Edelman: We’re in a geeky moment.
Kirkpatrick: We’re okay. We can handle it. Keep going.
Cerf: So Steve said something I think is very important, and it was slightly contradictory, which is why I wanted to bring it up. We talk about American competitiveness all the time. We have acts of Congress that speak to that. And yet, Steve correctly mentioned that collaboration and cooperation were going to be important among the various sectors, government, private sector and the legislative branch. I would like to suggest more generally that competition is sometimes viewed as a zero sum game, and it need not be. I think that collaboration and cooperation can sometimes produce positive sum outcomes. This is the bigger pie argument. And so I think we should keep that in mind and not be overly focused on competitive rhetoric if it isn’t necessary.
Kirkpatrick: Why, because the whole world can rise together kind of thing?
Cerf: Yes, a rising tide raises all boats. And we hear this competitive thing a lot. Europe of course is all up in arms about its inability to compete with creative and innovative American companies. And they spend a lot of time—it feels to me like they spend a lot of time trying to tear down American business instead of simply engaging by being innovative. And they have. And this is true in Asia as well, and in Europe. We have an advantage that you successfully took advantage of, Steve, and that is a willingness to take risk, a willingness to reward people for that, and an acceptance of the possibility of failure and recognition that it’s not fatal. This is not the case in the cultures in Asia and in Europe. This is a huge cultural barrier.
So to be quite frank, in terms of our staying ahead, we should remind ourselves of that. And while I remind them of this need to change the culture, culture change is slow, which means we should take advantage of that and run as fast as we can, while they finally figure out how to catch up. But they are going to have to decide that failing does not leave a permanent mark on your forehead.
Kirkpatrick: But, Vint, does that willingness to fail apply more to government perhaps than it has been seen to apply, looking forward?
Cerf: That’s a scary proposition for someone—and you might want to respond to this. You don’t necessarily want to hear somebody in government saying, “We feel free to fail.”
Kirkpatrick: Well, they’re politicians, they’re not—
Cerf: Because politically that doesn’t sound too good. On the other hand, Megan and her US Digital Service is filled with people who recognize that sometimes you have to try things out that might not work in order to figure out if it does work. If you’re a scientist, that’s how you learn. You have theories, you do experiments, and one of two things happens: the experiment reinforces the theory and you’re all happy, or the experiment shows that the theory is wrong and you’re not as happy, but you realize that you can improve the theory now based on what you’ve discovered. So failure is a source of education if you let it be that way.
Kirkpatrick: Good. I would like to see that attitude a little more embraced in this town, frankly.
Edelman: Well, and if I may on that point, I think that’s really important. There is a difference between those issues in which failure in government and public policy can and should be tolerated, like the development and debuting of a new website or a user-interfacing tool, versus in areas that we consider to be more seriously regulatory. I mean minimum viable product doesn’t work in the world where health and safety is involved, right? Then you’ve got drones falling and killing Fifi, your little dog, right?
You know, so there’s a world in which I think we in government have to realize that not every issue in which we engage, particularly those that are early in their development cycle, are existential crises. There are worlds in which maybe we need to be thinking about helping the private sector develop safe spaces. I mean we can go—I’m sure you’re going to on a later topic talk about drones, right? And here’s a case where—
Kirkpatrick: We have that very much on the schedule.
Edelman: Exactly. So I hope in that panel you’ll talk a little bit about these testbeds that are being built all over the country as an area where, look, you can’t necessarily be testing in Central D.C. the viability of new drone products, but you should be elsewhere.
Kirkpatrick: Right. Something with self-driving cars too.
Edelman: Right, exactly.
Kirkpatrick: Like in Ann Arbor, there’s 200 of them, supposedly.
Cerf: So this actually reinforces the notion that you should look for ways to try things out safely if you’re not sure what the policy should be, or you’re not sure what the technology should be, and we should find a way to tolerate that—even when it comes to government policy, as long as the elements of government, speaking very broadly, recognize that if you discover that this idea isn’t working or doesn’t work, you should feel free to change it. And we should give people in government the latitude to do that.
Case: David, I want to go back to something that Vint said because I think it’s an important nuance. While it is fair, I said at the beginning that this country kind of remains in the lead, most innovative entrepreneurial nation, and it’s fair to say that Asia and Europe have not shown the same level of creativity in this last wave, it’s also fair to say that there are many parts of this country that have that same conservative, risk-averse perspective. It’s not evenly spread across the country, which is partly why—there’s also some other reasons and I think we need to fix them. Like last year 75% of venture capital in this country went to three states.
In Europe—there are many parts of Europe that are not super innovative, but Berlin and Stockholm and London are on fire and are quite competitive with some of our great cities in this country. So I think it’s important to look overall what’s happening against sort of this national level or regional level, but also dig a little deeper And I think if we’re going to remain the most innovative entrepreneurial nation, we’ve got to level the playing field. We’ve got to make sure everybody with an idea, wherever they happen to live—if it’s not in San Francisco or Boston or New York, it’s in Des Moines or Detroit or Atlanta, they too have access to capital. Level the playing field in terms of more inclusive entrepreneurship. Most of the money doesn’t just go to those three states, it goes to white guys, and so how do you make sure everybody who has an idea has a shot? If we do that, then I think we’re going to be much better positioned. We’ll have a more broadly dispersed innovation economy. We won’t have all our eggs in certain baskets. But to generalize and say somehow we’re like a super innovative nation and Europe is kind of fuddy-duddy, you know, that’s not what’s happening now. And even Google and others are opening centers in London and Madrid and other places because there’s unbelievable innovation happening in those cities, and there have been some iconic companies. You know, one of the most innovative companies in the last ten years in music is Spotify. Came out of Europe. One of the most innovative communications companies was Skype. Came out of Europe.
So this is a global battle for entrepreneurship. We’re seeing that—just as we saw capital globalize, we saw manufacturing globalize, we’re seeing entrepreneurship globalize. We have to figure out at a national level how to make sure we win that global battle—which is why immigration, for example, is important in how you win what’s now a global battle for talent—while at the same time recognizing there’s a lot of work we have to do within this country to spread this innovation and entrepreneurship idea and access to talent and capital and mentoring and other things all across the nation to really kind of level the playing field.
Kirkpatrick: And, again, you’ve been on a tour, effectively, of the country. I think you were recently in Tennessee, and also New Orleans, and I know in past months and years you’ve been—and you’re basically preaching the gospel of entrepreneurship and inclusion in innovation. Just quickly summarize why you’ve been traveling around.
Case: So we’ve done three of these bus tours. Last year we did two. We started in Detroit, then Pittsburgh, then Cincinnati to Nashville. Then the second one was Madison, Minneapolis, Des Moines, Kansas City, St. Louis. Just last month we did Richmond, Raleigh-Durham, Charleston, Atlanta, New Orleans.
Kirkpatrick: And who is ‘we’?
Case: It’s a group of people. Google for Entrepreneurs is a part of it, you know, UP Global, an initiative I chair, is part of it. Salesforce was part of it. A variety of different groups kind of joined together to do this thing. And it basically is, in each city, how do you create more mashups, more connections within the city, get entrepreneurs working with bigger companies, get the mayors, the governors involved in what’s happening at the startup level, create more network density within each of these regions.
Kirkpatrick: So you’re trying to seed new thinking in each city.
Case: In each city, create more of those connections, more vibrancy. And then secondarily, absolutely, shine a spotlight on the great entrepreneurs building great companies in those places, with the hope that people like you—although, you’re doing it, because you’ve done stuff in Detroit and other places—and investors sitting in San Francisco or New York actually get on planes to visit some of these cities, and they’ll be surprised by some of the companies that are being built there. There’s a perception—I love Silicon Valley, I’m proud of Silicon Valley, I think it will continue to do awesome things, will continue to be the envy of the world—but there are great companies being built all over the country and there’s not enough of that story being told. And that’s not good for those companies, not good for those regions. It’s also not good for the country overall.
Cerf: That basically says that not only is all politics local, but entrepreneurship is too. And I really like this idea of stimulating local governments to recognize the value and to create conditions under which entrepreneurs are successful.
Kirkpatrick: We’ve done Detroit four times—this September will be the fourth—and we’d love to be extending that to other cities, so we should talk to you more about that.
I want to ask you one quick question, and I want to make sure you talk about the role of government as an innovator, because I know that’s something you’re passionate about, and then I want to hear from the audience.
But, Steve, if you were going to get one button you could push and have Washington do something that you feel would help the country in the long term, what would that one thing be?
Case: Well there’s a big thing and then a more narrow thing. I think the biggest thing, and a lot of people in this room understand it, is that I think our political system is broken. It is dysfunctional. The ability to get stuff done has gotten much too difficult, and the partisanship and hyper-partisanship really has become an issue—and the center has been hollowed out, and even the word “compromise,” which I think is core to democracy, somehow has been a bad word. Somehow you’re selling out.
Cerf: It means lose—yes.
Case: And so that actually affects a lot of things. I actually find, when I talk to folks in the White House, or Republicans or Democrats in the House or Senate, they often do have a sense of where things are going. They actually often do have solutions to get there. Their frustration is they can’t get that done. And so it’s more about building the relationship, building the trust, building the dialogue, and I think one thing as a nation we need to do is figure out ways to celebrate the people that are willing to come together and find that common ground. That cuts across all these different issues.
Within entrepreneurship specifically, I think access to capital is one of the key things that does level the playing field. I was pleased that Congress did three years ago pass this Jumpstart Our Business Startups Act. The President led the way with the Jobs Council, and Eric Cantor and others were very supportive, so it came together in a bipartisan way. It did result in an onramp for IPOs. It has resulted in a lot more IPOs in the last couple years than we saw previously, so that’s been great. It unleashed some capital around some new regulations, including related to crowdfunding. Now, the FCC still hasn’t finalized some of their regulations to really take that to the next step, but that’s really important in terms of leveling the playing field, not just in terms of the regions, but in terms of people. I think last year—I mentioned 75% of capital went to three states. I think it was 85% of capital went to men. And there’s not much capital that goes to African Americans or Latinos. So there are a lot of people with great ideas in cities all across the country who just don’t happen to have access to the same networks that they have if you went to Harvard and then moved to San Francisco. And if we’re going to continue to be innovative, we need to make sure everybody’s in the game, so that access to capital, doing other things around that to make sure that that is more broadly spread. And the first step was the Jobs Act, but I think there’s more to be done.
And the last one is the thing I’m most nervous about, that I’ve spent a lot of time on, is this issue of immigration.
Kirkpatrick: I wanted you to say that, yes.
Case: I understand it’s complicated and I understand it’s sensitive, I understand it’s multifaceted. I get all that. But we will not remain the most innovative entrepreneurial nation unless we win what is now a global battle for talent, and we cannot win that battle for talent with our current immigration system. So there are different theories, you know, do everything comprehensive, step by step—you know, whatever it takes to get it done, we should do, but we need to deal with that. And it is politically charged—and now, presidential election season, it’ll get even more politically charged. But we are crazy to allow what’s happened. There are many, many, many entrepreneurs I’ve met who start a company in this country, one who started a company in Cambridge, couldn’t stay, moved to India, now has thousands of employees in India, a company worth billions of dollars. He wanted to stay in this country. We educated him and kicked him out. It’s ridiculous.
Kirkpatrick: Yes, that’s crazy. You know, we are ending today with a Republican senator and a Democratic senator together onstage, with Sean Parker, which will make it even more interesting.
Cerf: Do you have the Red Cross coming as well?
Kirkpatrick: No, we don’t, because actually, Senator Fischer and Senator Booker have already worked together on several issues. They’re both new, and they kind of agree with a lot of what you just said.
But quickly give your thoughts on the government as an innovator. We’re running short on time, but I do want to hear from the audience.
Cerf: All right. So first of all, the government has a role in long-term R&D, both basic research and applied research. It can afford to take long-term risk in spaces where no business would choose to do so.
They could also do something else, which is sometimes a charged point, and that is to move laboratory results far enough along that the venture capital people are willing to take the rest of the risk. And it’s often the case that the government stops short. We were lucky with Internet in some respects, because there were private sector organizations that got interested in building these services five or six years after we turned the Internet on in 1983. We started to see commercial services in 1989. We saw commercial equipment even sooner, like 1984 and 1985. But there are other situations where the government could have provided funding to push the technology out of the lab and far enough along for venture to pick it up the rest of the way.
So we have two roles: long-term R&D, which is high risk stuff with high payoff, and second, pushing it farther along.
Kirkpatrick: Okay. Can we get the mic to this person right away?
Hartsock: Thank you for doing this. My name is Ximena Hartsock and I am the founder of Phone2Action. It’s a civic engagement platform. So I was at CS Asia a couple of weeks ago, which was in Shanghai. It was fabulous. First one.
Kirkpatrick: That’s a conference in Shanghai?
Hartsock: It’s like CS International, but the first one in Asia. And something that was incredibly impressive to me was the passion of the Chinese for technology right there. I’ve been to International CS many times but this was just a different energy. And many of them youth. The third day they opened it to consumers and you couldn’t get in. There was traffic jams outside. They created fake tags to come in, I think, on the afternoon of the first day. It was really incredible, the energy. So we had a meeting with the consul of United States in China and I asked him, “Why don’t we have a visa program for the Chinese?” We have one for Singapore, we have one for Chile—I’m Chilean. We never meet the cap in these two countries. Why don’t we have one for China? And he didn’t really answer the question. And then the next day, pretty much in every paper it was something in the media about the efforts the Chinese government has to keep the students there. The University of Beijing has a program, you know, there are all of these programs. And so I tweeted about it several times and never got a response from the consul. So I am very, very concerned about the specific efforts the government actually has to create these programs. You know, it’s something that can be done through legislation, but also just agreements between countries, that probably can help us also move the needle. And I know these agreements are happening between countries, like China signed an agreement to Chile.
So my question to Steve Case is, one, what is the pressure that we’re putting directly to government on that?
Number two, I hear a lot of people talking about immigration reform, but for Latinos—I’m Latina—it looks like something else. So it’s the Indians, the Asians—which is fine. You know, I’d love to have anyone that’s smart, doesn’t matter the color of their skin. But for Latinos that are struggling, that are just learning a little bit—you know, dropping out from school, etc., but they’re trying. They’re trying. It’s very difficult for them to find the immigration message compelling from Silicon Valley when it doesn’t speak to them.
And then on the investor side, the investors, when you come to meet with an investor and they deal with an accent like mine for example, it’s very difficult for them to forget that. The mental model is there, they’re looking for Zuckerberg to walk in the door. So my question to you is, what are we actually doing to change that? First, putting government pressure for these programs—and number two, on the investor side, to actually change the mentality that is really not trying harder to understand the different—you know, the culture, how the Latino or the other cultures are when it comes to innovation?
Case: Well, first—several quick comments. First, I think your example of China should be a wake-up call that this battle for talent is being waged globally, and a lot of countries are pretty aggressive in trying to develop and keep and attract talent.
Kirkpatrick: And the passion for tech in China is massive.
Case: And there’s also a certain kind of hubris in some parts of this country that, you know, somehow the DNA of America is always going to be more innovative than other places. And I remember growing up in Hawaii, when the first Japanese cars arrived, and everybody said, “Oh, these cars are like—nobody’s going to take that seriously.” And then, you know, 25 years later they had significant market share. So I think we need to be careful not to presume that somehow we have this manifest destiny, we’ll always be the most innovative. I think we can be. I think there’s a lot of reasons we should be. But not if we don’t take it seriously.
On the issue of access to capital, that’s one of the reasons why I think crowdfunding is very important. I mentioned that most venture capital goes to men. On crowdfunding sites, like Kickstarter, Indiegogo, it’s split more evenly. And the reason for that, I think, is people are then focused on the idea more than the person and the power of the idea really drives the willingness to commit to that and fund that. And so as we open up crowdfunding in other sectors, and getting the FCC to do its part around the equity and debt crowdfunding, I think that will help level the playing field, not just in terms of where you are, but also who you are.
Kirkpatrick: We’ve got to wrap, but David or Vint, any closing thoughts?
Edelman: Let me just say one point, which is that the gridlock in Washington can be a tremendous Achilles heel or it can be an opportunity. I mean we have, for the last six years, taken this moment of gridlock as a way to reinvent the playbook for government and what we’re able to do. And, you know, you talked earlier about equity, this idea of who’s going to benefit from technology, and one of the areas that we’ve been focused on is education technology and who’s going to have the benefits of technology in the classroom. I won’t give the whole song and dance on it, except to say that this is an example where, without an act of Congress, without any particular step, we’ve been able to deliver what is now $10 billion of not only infrastructure—because there’s no one but the government that is going to actually be able to provide the core infrastructure in classrooms—
Kirkpatrick: For broadband access to schools?
Edelman: Yes, broadband access for schools, in the classrooms—not just broadband, but wireless.
Kirkpatrick: It is a national disgrace that we don’t have broadband, real broadband in every school. It’s idiotic and self-destructive.
Edelman: Completely agree.
Kirkpatrick: And I think that’s what you’re working on.
Edelman: Exactly. The President’s quote on this is like, “In a country where we expect free Wi-Fi with our coffee, shouldn’t we be giving it to our kids”—I mean shouldn’t we be giving it in schools?
Cerf: Well, just to build on that, you have to—if you want broadband access, it’s to what? And it’s to the Internet. And the whole point here is that if we don’t keep the Internet open, accessible, we will ruin an engine of innovation and GDP growth which has been substantial over the last 30 years. We’re seeing governments interfering with that, we’re seeing all kinds of policy issues arising, all of which could potentially torpedo what has been a wide open system. We need to make it safer, we need to make it more secure, we need to make it more private, but at the same time, we need to keep it end to end open so that everybody has access.