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What Does Our High Tech Industry Really Want?

Last month the American Electronics Association, the nation's biggest technology industry group, issued a 20-page report entitled "Public Policy 2001." The report was given to the new administration and the new Congress. It was a result of a survey of more than 300 technology companies around the country, and the findings are at least worth considering, since, I think, most people would acknowledge that this country's long-term economic future is tied to our high technology industries.

The whole report could probably be summed up simply with the plea from our high tech industrial group to improve the math and science skills of students who will be needed in the future to help run these companies. And at the same time, the industry is hoping the government will resist the temptation to invent layer upon layer of new regulations, which they think will only slow it down.

The association said in its report that free markets and skilled workers are the key to keeping our technology industry growing and maintaining its worldwide leadership. Economists can see that while technology accounts for 5-10% of the nation's Gross Domestic Product, it also accounts for somewhere between 1/3 and 1/2 of the economy's recent economic growth.

To that end, the group compiled a list of public policy priorities that it presented to the 107th Congress. In order, here is what the Technology Trade Association hopes that the administration in Congress will concentrate on over the next few years:

• 1. Better math and science education
• 2. Protection of privacy
• 3. Resist the temptation for more Internet taxation
• 4. More tax credit for research and development
• 5. Get the IRS regulations on stock options improved
• 6. Develop international trade
• 7. Specifically, open Chinese markets further
• 8. Minimize export controls
• 9. Give the president fast tracking trade powers so that more trade can be freer on an international level
• 10. Develop and deploy broad band communication which will, of course, expand the Internet's power and influence

A couple of these points are interesting. Some are, of course, obvious. The association says that in asking for an extension of the internet tax ban, which expires later this year, the group notes that e-commerce is still an infant compared to the rest of the economy, and needs time to develop on its own. This gets into the argument concerning the myriad rules and regulations involved in state and local tax systems. At the same time state and local officials say they are losing billions of dollars annually in e-commerce that is continuing to thrive without taxation. A recent study from the University of Tennessee says that states stand to lose 10-11 billion dollars a year by 2003 due to lost e-commerce sales tax. The Congressional Budget Office puts the loss at somewhere between 2.5 and 20 billion a year. The National Governor's Association estimates the loss to be somewhere between 25 and 30 billion. These are all, of course, estimates and they vary widely-largely because no one can get their arms completely around the size and growth rate of e-commerce. All everyone knows is that it is growing by leaps and bounds. In fact, the Cato Institute Center for Trade Policy Studies in Washington estimates yearly sales on the Internet will top 100 billion in just the next two years.

So, there you have it. At the bottom line, the American Electronics Association representing some 300 high technology firms, setting out a preferred agenda for the White House and Congress. Will they follow it? Probably not. And no industry or association, no matter how powerful they are, or what promise they show, should go merrily along unobserved or totally unregulated by Washington. It's just that at this point, this still relatively new industry with so much promise is asking for some room to run and some time to breathe.

(Tom Butenhoff is a First Vice President with J. E. Liss and Company, Inc. in Milwaukee. The views are his, and not necessarily those of Liss Financial Services or the Job Connection/Hiring Network.)

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