Technology: Obama Wants A CTO; McCain, Risk Capital

One of the most interesting and unique things about Obama is his concept of a national level CTO (Chief Technology Officer). Alright, it's not all that innovative. CTOs have been around since technology. A CTO is a common upper manager in industry, but not in government. Certainly not as a presidential adviser or cabinet member. As least not until now.

Obama seems to have a good grasp of the fact  that you have to find good trustworthy tech people to handle technology and then then let them do their job, unlike McCain who has Wall Street "market-based solutions" in mind. Sounds expensive. If McCain worked in the industry, he'd be the kind of manager that tech guys would take advantage of, and then he'd then try to micromanage them when it's too late. It's a common management problem in technology.

One thing that I find consistent in this fast evolving industry is that managers seldom have a grasp of technology. They depend on people they hire, and on contractors to make good decisions and recommendations. What this often results in is a corruption where the techies spend more money and time on projects than they need to; or the managers will try to control them by micromanaging. It doesn't work because managers make bad decisions that tie the tech people's hands. Because of this lack of understanding by management, you often find inflated tech budgets or projects that are far from efficiently completed. This could be why you see a range of situations now, where one company is doing well with technology and another is looking to cut back.

Could these things happen on a wider scale, like the national levels of government?

Obama wants to appoint a CTO to manage and guide technology on a national level. Considering how fast things change in the industry, this makes a whole lot of sense. What was true yesterday isn't true today, has never been a more appropriate phrase than in technology.  VentureBeat published Obama's entire technology plan and his hopes to appoint a national CTO:

The CTO's mandate would be quite different from the Cybersecurity czar appointed under the Bush Administration. Bush's czar helped defend against cyber attacks. Obama's CTO, by contrast, would ensure government officials hold open meetings, broadcast live webcasts of those meetings, and use blogging software, wikis and open comments to communicate policies with Americans, according to the plan.

Obama's website (barackobama.com) states the following:

Barack Obama believes that America should lead the world in broadband penetration and Internet access. As a country, we have ensured that every American has access to telephone service and electricity, regardless of economic status, and Obama will do likewise for broadband Internet access. Obama and Biden believe we can get true broadband to every community in America through a combination of reform of the Universal Service Fund, better use of the nation's wireless spectrum, promotion of next-generation facilities, technologies and applications, and new tax and loan incentives.

Obama will appoint the nation's first Chief Technology Officer (CTO) to ensure that our government and all its agencies have the right infrastructure, policies and services for the 21st century. The CTO will ensure the safety of our networks and will lead an interagency effort, working with chief technology and chief information officers of each of the federal agencies, to ensure that they use best-in-class technologies and share best practices.

Obama goes on into detail about the steps he will take to accomplish this, including investment in science, research and R&D; and then protection of intellectual property. Obama is also very concerned about open access to the internet and wants to guard against any corporate concerns that would thwart this to their advantage. In an early primary interview, as reported on TechCrunch, Obama states:

I will prevent network providers from discriminating in ways that limit the freedom of expression on the Internet. Because most Americans only have a choice of only one or two broadband carriers, carriers are tempted to impose a toll charge on content and services, discriminating against websites that are unwilling to pay for equal treatment. This could create a two-tier Internet in which websites with the best relationships with network providers can get the fastest access to consumers, while all competing websites remain in a slower lane. Such a result would threaten innovation, the open tradition and architecture of the Internet, and competition among content and backbone providers. It would also threaten the equality of speech through which the Internet has begun to transform American political and cultural discourse. Accordingly, network providers should not be allowed to charge fees to privilege the content or applications of some web sites and Internet applications over others. This principle will ensure that the new competitors, especially small or non-profit speakers, have the same opportunity as incumbents to innovate on the Internet and to reach large audiences....

I will confront the entrenched Washington interests that have kept our public airwaves from being maximized for the public's interest. As president, I will demand a review of existing uses of our wireless spectrum. My bottom line is that rural America needs more and better wireless broadband service, networks should be as open to innovation as possible, and the consumer needs greater freedom and choice.

John McCain has similar, almost identical, statements on his website (johnmccain.com) about open government and more and better internet access. But it is preceded by a lot of talk about funding and investments in technology, and a lower corporate tax rate. Don't ask me why technology needs lower corporate taxes to flourish, or why it should be part of a discussion on McCain's technology plan, unless you're concerned about cutting into those big CEO salaries and bonuses that Obama's tax on high income would affect. Technology ventures can succeed with very little investment, unlike many other industries.

A lot of the big internet players like Google or Yahoo were started by a couple of guys with computers. Microsoft was started in Bill Gate's garage. Hardware manufacturers, like Dell, might require a bit more of an investment, but still nothing like the auto industry, for example. It was Dell who came out with their build-on-demand process, where they are able to keep a zero balance inventory. That means they don't purchase parts until an order is received. That is a way to greatly reduced overhead since you don't need to warehouse parts, or overstock parts you may not end up using. Even innovations in chip manufacturing don't required a mass infusion of capital. Some super MIT type geeks maybe.

It's nothing like retooling GM for the next year's model, or backing a big part of the national mortgage industry. Technology requires knowledge and expertise, more than it requires money. Obama seems to understand that with his proposal for a CTO. We're talking about an industry with the innovation history to evolve and create startups without a lot of capital, but with technological expertise.

It would seem, then, that McCain's stance on providing technology for everyone is an after thought (possibly just a cheap copy of Obama's plan?) and his real plan is to make big companies bigger. It's that same tired old story. McCain's website states the following:

Innovation requires risk capital to turn bold ideas into reality. A ready supply of capital willing to invest in innovative ventures has been a hallmark of America. To maintain our innovative edge, our next President must promote conditions favorable to investment. John McCain knows the stakes - and he knows what it will take for America to remain competitive. Federal tax and fiscal policy must create and protect the incentives to innovate.

CNet News, a popular website among techies, did an article on John McCain's views on technology, where McCain states:

I have been a leading advocate in the Senate for seeking market-based solutions to increasing broadband penetration. We should place the federal government in the role of stimulator, rather than regulator, of broadband services, remove state and local barriers to broadband deployment, and facilitate deployment of broadband services to rural and underserved communities.

Risk capital? Market-based solutions? Are you freaking kidding me? Sounds like more of the same mess that got us here. Where have I heard that before? What's more important is who gets this risk capital? Who comes up with these solutions? You? Todd Palin? Trac maybe? He's played video games.

Sorry Senator. We don't really need to float all that capital to private companies, do we? Or if we do, it's an economics discussion, not a technological one. Forget the banks. Get a garage, a safe, a computer, and start a company. What millennium is this guy living in? Technology is not same as building cars or lending mortgages.

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Comments

[rjmiller]

I'm not sure you know exactly what you're talking about. While you're right that web app developers don't need huge government investments, research groups do. DARPA grants funded decades of computing research that led us to the 80s/90s tech explosion, and those grants are dwindling rapidly. And jumping on the term "risk capital" seems silly, particularly when talking about expanding broadband access which would require investment into network infrastructure.

Of course, none of this has anything to do with the corporate tax. That is an obvious ploy that McCain loves to slip into any conversation about anything.

It would be better to jump on the McCain camp for the "market-based solutions." For broadband access, I'm not sure I disagree. I don't think the government necessarily needs to lend Comcast a few billion to run lines out to every farm house. But in overall science and tech, research needs more funding. Obama is putting this forward with a CTO to oversee these increased investments, and that is a great step.

McCain wants to lower research expenditures in the hope that the increased corporate profits will fund research as the market demands. This is, of course, the fundamental inefficiency of supply-side economics. If we want research in a particular area it is more efficient to fund it directly instead of cutting tax revenue an equal amount and only having a portion of that go to research.

[JonRaymond]

What you say makes a lot of sense. I got the impression that McCain is talking about investments into tech companies and not necessarily R&D. He seems to lump everything together. His statements are really quite nebulous on pinning this down.

I just wanted to make a point that tech companies very often don't need a lot of capital to start up,and once they are started they can usually grow on their own. R&D is a whole other thing. Of course that needs investment and Obama specifies this.

Obama is more to the point especially with his CTO concept, which is the major distinction between them.