The Guest Blog

Gary Shapiro: A New Foundation or the Same Old Stonewalling?

Gary Shapiro, President HKSCKPVIamp; CEO, Consumer Electronics Association
Presidential speech pedistal
Photo by: Pete Souza

Like most Americans, I watched the State of the Union address last week with hope.

I want President Obama to succeed. A successful President should mean a successful country. I think that many of the proposals he outlined can be turned into bricks to shape the “new foundation” he so eloquently spoke about Wednesday night.

But we’ve heard eloquence from President Obama before. It’s hard not to applaud, but the question is: Does Washington possess the will to put mortar to brick and build it?

Is Washington ready to cut government spending to help reduce the national deficit? Will President Obama make good on his commitment to push long-stalled trade agreements? Will Washington support a policy environment where innovation and entrepreneurship can flourish?

I was thrilled when the president said: “Now, the true engine of job creation in this country will always be America's businesses. But government can create the conditions necessary for businesses to expand and hire more workers.” Or when he pledged to adopt policies that would allow the United States to aggressively compete (and win) in the global economy. “I do not accept second place for the United States of America,” he declared – as the leader of our nation should.

And I couldn’t help but agree when he pledged to attack the deficit, saying that the federal government should emulate “families across the country (that) are tightening their belts and making tough decisions.”

But I have a nagging feeling about his commitment to belt tightening when he hints that repayments from the bank bailout should be used for the tax relief for businesses. It seems that he’s moving bricks around without patching the hole he left in the wall.

Freezing discretionary spending is just a paint-and-spackle job. It doesn’t get at the structural problems that face the nation. I hope that the bipartisan commission he plans to establish will come up with concrete reforms, but I’ve been around long enough to know how little such commissions can get done.

I found myself cheering when he said: “We need to encourage American innovation.” As a leader in one of the most innovative industries ever conceived, innovation is dear to my heart. We need technology-focused innovation in energy production, distribution and consumption. President Obama must know that Germany, Spain and China are light years ahead of the United States in supporting alternative-energy projects. What’s more, China is expected to build at least 50 new nuclear reactors by 2020 – the clear world leader in nuclear power.

However, we must remind the president that innovation is not confined to energy.

We need to do more to nurture that culture of innovation.

I would have cheered even harder had he mentioned broadband. Broadband is a cornerstone of the information economy. The United States ranks a distant 15th in the worldfor broadband access. If we are going to continue to lead the world in innovation, it must be a priority.

The same is true for our rapidly depleting supply of wireless spectrum. The tremendous popularity of mobile devices has changed our society in wondrous ways, but those cell phones, laptops and other technologies rely on a wireless infrastructure that has not kept pace with the demands that full motion video on the Internet imposes. Federal Communications Commission (FCC) Chairman Julius Genachowski recently told an audience at the International CES that depleting wireless spectrum poses a “looming crisis.”

I loved when President Obama called for a goal of doubling U.S. exports over the next five years. For the President’s first year in office, we sat on the sidelines while other nations made all the right moves. Therefore, I ask the White House to hold Democrats in Congress to account for their blockage of the trade deals with Colombia, Panama and South Korea.

Trade is a key component to maintaining the United States’ global success. In 2009, the World Economic Forum found the United States to now be the world’s second most competitive nation, slipping down a notch to Switzerland. President Obama rightfully acknowledged the challenges we face: “China’s not waiting to revamp its economy; Germany’s not waiting; India’s not waiting.”

“These nations, they’re not standing still,” he continued. “These nations aren’t playing for second place.”

Good fighting words, but I wish President Obama had included a commitmentto revamp the convoluted U.S. visa system that is hurting our treatment of foreign students, talented immigrants seeking U.S. jobs, and international guests traveling to this country to conferences, meetings and other business engagements. Our own trade show, the International CES, attracts 25,000 international visitors buying U.S. products but gets little support from the White House. In fact, the silly ethics laws block our top government officials from hosting their counterparts. This month we had the ridiculous scene of the American FCC commissioner standing outside a cocktail party trying to follow the Obama ethics rules while his counterparts from elsewhere where attending the event.

If we want to stay on top we need to get rid of laws which hurt us--whether it’s the spite of litigation taxing our businesses or our new blockage of the best and brightest professionals. Immigrants founded half of all Silicon Valley start-ups and hold about 40 percent of all U.S. patents. Their companies supported 450,000 jobs and generated $52 billion in revenue in 2005, found Duke University researcher Vivek Wadhwa. Yet our unfriendly visa policies are sending more and more of them back to their home countries to start these job and wealth-generating businesses.

Let’s support President Obama in 2010 in building that “new foundation.” But let’s insist that this new chapter be led not by Washington and Wall Street but by entrepreneurs. We need a national movement that puts innovation at its core. That’s why CEA founded the Innovation Movement, which is already more than 50,000 strong and growing. Our nation needs a commitment to free-market principles and a policy environment that encourages experimentation and enterprise. It also needs a commitment to fiscal responsibility, reducing the national deficit and discontinuing corporate bailouts, so that future generations of innovators have the chance to thrive.

I’m in favor of a new foundation. But I want the house built on it to be strong and survive harsh conditions. Only time will tell if we have the right masons and carpenters to build it.


Gary Shapiro is the President and CEO of the Consumer Electronics Association.  The trade association represents more than 2,000 U.S. technology companies including Google, Apple and Microsoft.  It also hosts the International CES, the world’s largest gathering for consumer technology held each January in Las Vegas.