IT's Future Depends On Public-Private Intervention, Say CEOsIT's Future Depends On Public-Private Intervention, Say CEOs

Information technology's ability to continue innovating the way people work and live requires close cooperation between technology vendors and government to promote IT education, intellectual-property protection, international trade, and cybersecurity. These were the sentiments of CEOs and senators who participated Wednesday in a Business Software Alliance roundtable.

In fact, failure to address education, intellectual-property, trade, and cybersecurity issues creates impediments to critical R&D investments that enrich innovation. The most volatile are intellectual property and offshore trade.

"Intellectual property is under severe attack today," said James Glassman, a fellow at the American Enterprise Institute, at Wednesday's forum. Glassman, the forum's moderator, pointed out that the greatest damage caused by those who steal intellectual property comes when companies withhold investments in new technology because they feel they won't get the proper return.

Microsoft CEO Steve Ballmer agreed that intellectual-property protection is essential for software companies to invest in the R&D required to innovate. He also said that, while software companies are already enlarging their R&D staffs this year, they would like greater assurance from government that the intellectual property created from these investments will be protected from piracy. "Government is doing a lot, but it can do more," Ballmer said, particularly in countries with weaker and emerging economies, including China, India, and Italy, where piracy is more prevalent.

The response of the senators present at the forum, including Robert Bennett (R-Utah), Hillary Rodham Clinton, D-NY, and Gordon Smith, R-Ore., was largely to agree with these corporate interests. Senator Smith, a member of the Senate Finance Committee, said that pressuring the rest of the world to enforce intellectual-property laws would send a message: "If you want to do business with the U.S., you can't steal from us."

Much of the intellectual piracy taking place occurs outside the United States, where laws are not as strict, said Dominique Goupil, president of Filemaker. "Thirty-nine percent of what we produce is ripped off through piracy."

"The reward for fixing this problem is more innovation, as well as businesses that generate millions more jobs and tax dollars," said McAfee CEO George Samenuk. "Government should help us help the economy."

Not surprisingly, the BSA CEOs favor international trade and the freedom to outsource overseas. Most believe offshore outsourcing's impact on the global economy will deliver commerce and jobs back to the United States.

Greg Bentley, CEO of Bentley Systems, pointed out that there's a misconception over the extent to which U.S. jobs are shipped overseas and the benefits that this open trade provides to U.S. businesses. "I don't know why we would jeopardize the [economic benefits] with protective measures" that would discourage business globalization, he said. While two-thirds of Bentley's workers are employed in the United States, more than half of the company's sales come from customers outside the country.

Sen. Bennett, also chairman of the Senate Joint Economic Committee, said at Wednesday's forum that tracking the jobs lost when companies outsource offshore is short-sighted. "Let us not be carried away with the concept that trade hurts American jobs," he said. "One of the ways that Wal-Mart grew to become the largest company in the world was through its ability to buy inventory all around the world at the lowest cost, so that it could sell all around the world at the lowest cost." Still, most of Wal-Mart's employees are in the United States.

Cyber insecurity is another impediment to IT innovation, the CEOs said. While the Internet has helped the U.S. economy flourish, it has also created security challenges undreamed of a few years ago, such as the Cabir cell-phone worm. "For the Internet to reach its potential, people must have trust in it," said RSA Security CEO Art Coviello.

"Ninety-seven percent of the critical infrastructure in this country is in private hands," said Sen. Clinton, a member of the Senate's Armed Services Committee. Both the government and private industry are looking to the software industry for their advice to help with this. "We need a partnership to fulfill homeland and international security," she said.

Although the United States has been criticized for not producing as many math and science students as other countries, the BSA sees this as a reversible trend. Math and science education leads to engineering degrees, which feed the technology industry, said Gary Bloom, CEO of Veritas.

One of the stumbling blocks to promoting information-technology education has to do with the education system itself, which "was built when we had a different economy, not one driven by technology," said John Thompson, CEO of Symantec. Thompson co-chaired, along with RSA Security CEO Art Coviello, the CEO working group that developed the report.

Coviello suggested that secondary schools make some form of IT training a requirement for students and teachers. The key to putting the resources behind developing and selling this technology, he said, is having teachers who understand technology well enough to adopt it into their curriculum.

"Our economy today was built by students from our educational system," said Bill Conner, CEO of Entrust. "We just need more."

The BSA will address each of these issues at length through a series of reports. The first of these, addressing the need for improvements in IT education and training, was published Wednesday. The BSA plans to issue future papers over the next year expected to offer its collective thoughts regarding IT innovation, intellectual-property protection, cybersecurity, and trade.

The forum itself underscores the software industry's optimism when it comes to the power of technology, Ballmer said. "I'm more excited about the next 10 years then the last 10 years, and the last 10 years were pretty good," he said, citing the rise of the Internet and cell phones in particular. Speaking for the other software CEOs, Ballmer said, "Our businesses only survive by innovating."