Tech Confronts the Reality of a Trump Presidency. It’s no secret that Donald Trump has been at odds with the tech community throughout his campaign. And while much of the industry is still reeling after Tuesday’s results, startup and tech leaders are beginning to come to terms with the reality of a Trump presidency. While a number of the positions espoused by Trump are antithetical to those held by the tech community (think immigration, encryption, net neutrality, etc.), some tech leaders are approaching President-elect Trump with an open mind and expressing a willingness to work with him. Then, on the other end of the spectrum, there’s VC Sherwin Pishevar calling for California to secede. No one can know exactly what Trump’s presidency will mean for startups and tech, but numerous publications are making predictions. A few of them can be found here, here, here, here, and here.
This week, 84 business executives, both male and female, penned an open letter to our next president detailing the steps that he or she should take to bolster the participation of women in entrepreneurship. They grouped their suggestions into three broad categories: access to financial and human capital, access to local and global markets and networks, and help with the changing-face of technology. The lack of diversity in startups and investments is well documented. But it’s also indisputable that improving the landscape for female entrepreneurs will create positive economic and social impacts. As the group pointed out in their letter, if women and men participated equally in the entrepreneurial ecosystem, the United States’ GDP could rise by $30 billion. The business leaders also noted that women invest 90 percent of their income into their communities, meaning that an investment in their careers could easily benefit society as a whole.
Today, Engine Advocacy and Tusk Ventures released their second “Grading the Candidates on Tech” report card, this time grading the positions that candidates for the U.S. Senate are taking with key issues facing startups and the innovation economy. Twenty-two candidates were rated based on their level of support, understanding, and familiarity with technology and the priorities of the nation’s startup community. Final grades reflect candidates' positions on key issues including broadband access and infrastructure, intellectual property, data security and privacy, and talent acquisition.
Three weeks ago, Engine took a look at how the Democratic Party’s draft platform would impact the tech and startup communities. This week, the party released their final platform to coincide with the beginning of the Democratic National Convention (DNC). Building on their draft, Democrats committed to rolling out broadband to every American and added language around the deployment of next-generation 5G technologies and free, public Wi-Fi. Some changes were made around encryption as well. While the initial draft did not even mention the issue, the final platform pledged support for a “national commission” on encryption, an idea that has been championed by Sen. Mark Warner and Rep. Michael McCaul.
As the Republican National Convention kicked off this Monday, the GOP also released the final draft of their party’s platform. The platform, which was written with input from the party’s base sourced via www.platform.gop, included generous mentions of issues important to the startup community.
Startups across the U.S. use stock options to attract and incentivize top talent. But as we’ve written before, the current tax code makes it difficult for employees to exercise those options requiring employees to pay taxes on their options even when there’s no public market to sell them to cover the tax burden. On Tuesday, Senators Dean Heller (R-NV) and Mark Warner (D-VA) and Representative Erik Paulsen (R-MN) introduced a bill aimed at remedying this.
Over 40 technology startups from across the country signed Engine's letter to Congress explaining why encryption is essential to their business operations and their users’ digital security and trust. “Encryption is at the heart of many of our products and services. Without the security and confidence that encryption provides, it would be difficult or impossible for us to find customers and investors, and ultimately, grow our businesses...
Recent headlines from around the country suggest that Silicon Valley has united against Trump...In addition to analyzing what influential venture capitalists and executives have to say about Trump, it’s just as important we take a close look at the issues and positions that impact the industry at large, from the major tech firms headquartered in the Valley to the single-person startups building new technologies and services in cities around the country.
The debate over ECPA reform has come to a standstill in the Senate, with the Judiciary Committee delaying consideration of the Email Privacy Act again this week. The bill, which would require law enforcement to obtain a warrant before accessing digital communications, such as emails, found unanimous support in the House. But a number of Senators have attempted to add controversial amendments that would undermine support for the bill in the Senate.
Our weekly take on some of the biggest stories in startup and tech policy. In the wake of the Apple-FBI dispute, lawmakers have made encryption a top policy priority. Several Congressional working groups have now been established to determine the best approach to address regulation of encryption technologies, but very little of the public debate focuses on the detrimental impact any new rules could have on startups.
It’s safe to say that 2016 election cycle has been like no other and, frankly, disturbing for a number of reasons. We are particularly concerned that the high drama has distracted from the important work of a campaign season—the public debate over the important issues of our time. Nowhere has this debate been more absent than in the tech and startup community, which is ironic, given the importance of tech and startups to our economy.
Today, Engine and Tusk Ventures released “Grading the Candidates on Tech,” the first report card that grades the 2016 presidential candidates on whether they are passing or failing on a number of issues critical to many startups and technology. Candidates were rated based on their level of support, understanding, and familiarity with technology, startups and the priorities of the tech community. Their final grades reflect candidates' positions on major issues including privacy and security, the on-demand economy and intellectual property.
Our weekly take on some of the biggest stories in startup and tech policy.
CISA Sneaks into Omnibus. As Congress scrambled to clear its legislative calendar before leaving DC for the year, it packed a bunch of unrelated bills together into a 2,000 page omnibus spending bill that will need to pass in order to adequately fund the government. This potpourri approach to legislation raises serious concerns about government transparency and access, as all but the most well-connected groups are effectively blocked from the closed-door dealmaking that resulted in the omnibus. This year’s omnibus produced one notably terrible outcome: the resurrection of the much-maligned Cyber Intelligence Sharing Act (CISA), which is meant to allow companies to share information on cyber attacks with government in order to help prevent future hacks. Critics argue that the bill creates more problems than it solves by jeopardizing user privacy, incentivizing companies to secretly monitor user activity, and allowing the government to obtain consumer data without a warrant. With the ECJ’s nullification of the EU/U.S. data transfer safe harbor so fresh in policymakers’ minds, it is a particularly inopportune time to pass a bill that many believe is effectively an expansion of government surveillance authority.
EU Sets New Data Privacy Rules. On Tuesday, the European Parliament and Council effectively agreed upon a negotiated version of the EU Data Protection Reform originally drafted in 2012. The measures will be formally adopted in early 2016 and go into effect in 2018. US businesses are concerned with several of the law’s provisions that make compliance challenging and also expensive. Among their concerns: Companies that violate the rules could face fines of up to 4 percent of global sales; the law also formalizes the “right to be forgotten” statute, allowing users to not only correct inaccurate personal data, but also the right to remove irrelevant or outdated information; the age of consent for data processing is set at 16 years; companies must alert authorities within three days of a reported data breach; and larger “data-processing” companies must designate a data protection officer.
An Uber Union? Seattle has become the first city in the nation to allow on-demand drivers for companies like Uber and Lyft to unionize. The legislation, passed by Seattle’s city council on Monday, is seen as a test case for the changing 21st century workforce and will likely be contested in court. While some have argued that the new policy conflicts with federal law and raises antitrust concerns, others insist that the local law has teeth. Regardless of its merits, the law further complicates the broader debate around worker classification in the emerging “gig economy” and whether policies can support both innovation and workers.
California’s New Self-Driving Car Laws. A month after a study by California’s Department of Motor Vehicles, the state released proposed rules for driverless cars. Some of the rules came as no surprise to driverless car manufacturers such as Google, Tesla, and Ford: consumers must receive special training certificates and the autonomous vehicles must meet certain cybersecurity standards. However, one proposal, if passed, could significantly impede innovations in this emerging industry. The California DMV wants a licensed driver present in the vehicle, preventing the kinds of functions—package-delivering vehicles or transportation for the blind—that could truly revolutionize transit. This rule also complicates the liability question by making the licensed driver legally on the hook for any accidents. Google, on the other hand, has thus far stated that it is willing to take responsibility for any accidents on the road. There’s still room for debate though; these rules open for public comment next month.
BingeOn? Maybe Not Says FCC. In its net neutrality rules from earlier this year, the FCC declined to enact a flat ban on “zero rating” programs whereby ISPs exempt certain data from user data caps. Instead the FCC decided to tackle such issues on a case-by-case basis. Since then, ISPs have begun to test the FCC’s willingness to regulate data exemption policies, such as T-Mobile’s Music Freedom and BingeOn plans. While T-Mobile’s programs do not implicate the most concerning net neutrality problems by allowing any music or video streaming company to take advantage of the data exemption without payment, some net neutrality advocates have taken aim at T-Mobile’s policy of throttling all video traffic regardless of whether it is a part of the BingeOn program. FCC Chairman Tom Wheeler has previously applauded T-Mobile’s programs as creative, pro-consumer innovations, but now, the FCC wants to take a closer look. With the Commission’s data cap inquiry and the DC Circuit’s pending decision on the validity of the FCC’s net neutrality, 2016 looks to be an important year for the future of the open Internet.
Drone Registration Goes Live. The Federal Aviation Administration unveiled new recreational drone requirements this week. Starting December 21, drone hobbyists must register their unmanned aircrafts and pay a $5 fee through a new FAA web page. The registration requirements represent a mostly uncontroversial attempt to maintain safety and accountability in national airspace as more and more drones populate the skies.
GOP Misses on Tech Issues. While many observers called this week’s Republican debate the most “substantive” yet, tech experts heard uninformed positions and misconstrued information on issues such as surveillance, the operation of the Internet, and encryption. For instance, Gov. Kasich inaccurately assumed that encryption prevented law enforcement from collecting information that could have foiled the San Bernardino shootings. Yet, whether encryption played any role in law enforcement’s access to important digital communications has not been confirmed. Meanwhile, Mr. Trump suggested that parts of the Internet should be “closed,” a preposterous suggestion that would not only hinder communication amongst bad guys, but also the good guys who drive ambulances, operate hospitals, and alert the world to vital information. Such superficial positions on high-impact tech policy are disconcerting - legislating these areas will require thoughtful (and, frankly, more complicated) solutions.
Prisoners Turned Coders. San Quentin State Prison just graduated 21 inmates from its tech incubator, which teaches inmates to code as well as the skills it takes to design and pitch a business to investors and peers. The program, made possible by The Last Mile organization, has become so popular that inmates are requesting transfers to San Quentin. Next up: A new program from The Last Mile will provide inmates with paid coding jobs for businesses outside prison walls.
Since the 2016 presidential contenders declared their candidacies and more recently, garnered increasing attention from national media and the electorate, we’ve been listening closely to what they have to say about technology. From where we stand, there’s a lot at stake: the Labor Department expects over 1.3 million job openings in the industry by 2020, cybersecurity and privacy challenges continue to make headlines, and technology itself is only becoming more ubiquitous. That’s not to mention that many of the startups navigating these challenges are an invaluable part of the national economy: new firms are responsible for all net new job growth in the United States. Yet, aside from some vague musings about the gig economy, general statements about immigration reform, and outlandish ideas about the Internet, we haven’t heard much, at least much of substance.
As Engine’s Executive Director, Julie Samuels, explained in TechCrunch, candidates have thus far evaded questions on many of the issues that matter most to technology entrepreneurs and industry leaders, because “many of these tough issues split our traditional notions of the two-party system.” They also don’t have easy solutions.
In an effort to highlight some of these issues, Engine teamed up with the Technology Association of Iowa to host a forum on December 7 in Cedar Rapids. Iowa is not only the first state to hold primary elections, making it a popular destination for campaigns this time of the year, but it’s also home to a vibrant and growing technology and startup community. The tech industry is one of the fastest growing job sectors in the state and accounts for 8.8% of Iowa’s GDP.
The program started off with a panel discussion among Julie Samuels and local tech entrepreneurs to address why policy matters to this community in Iowa and all over the country. Eric Engelmann, founder of the Iowa Startup Accelerator, spoke about the importance of capital access to entrepreneurs building companies outside Silicon Valley. Helen Adeosun, CEO and co-founder of Care Academy, discussed the great need for industry diversity, and Bruce Lehrman, CEO of a Cedar Rapids-based data center company, noted the urgent challenge of finding technically trained workers.
We were later joined by 2016 candidates Gov. Martin O’Malley and Carly Fiorina who shared their own views on the talent shortage and access to capital, among other issues. As the Cedar Rapids Gazette reported, the candidates agreed that education is “vital to innovation” but, not surprisingly, disagreed on the federal government's role. O’Malley’s address focused on his track record as governor of Maryland; under his administration the state was rated number one for innovation and entrepreneurship by the U.S. Chamber of Commerce and expanded STEM education offerings in Maryland schools. When pushed on his specific policy prescriptions for supporting innovation and the country’s entrepreneurs, however, his answers were less direct.
Fiorina took a different approach in her address, strongly condemning the recent attacks in Paris and San Bernadino before turning to the role of technology “as a tool and a weapon” in national security and cybersecurity efforts. “Having led the world’s largest technology company, I know what it will take for America to lead in this realm,” she added. When Engelmann asked about whether she’d repeal the Affordable Care Act, which he said allowed entrepreneurs to start their own ventures, she affirmed she would, arguing the free market could better provide healthcare solutions. And in response to how she’d support more women entrepreneurs, Fiorina underscored the layers of the bureaucracy that slow down all new business owners.
This week’s forum offered us a glimpse on where at least two candidates stand on a handful of these important issues. As we look to 2016, we hope to hear a lot more.
This afternoon, Engine, in partnership with the Technology Association of Iowa, is hosting the first ever Presidential Tech Town Hall. We’ve invited presidential candidates to address over 200 entrepreneurs, technology leaders, and caucus-goers in Cedar Rapids. Former HP CEO Carly Fiorina and Gov. Martin O’Malley will join us to share their platforms for supporting technology innovation and entrepreneurship.
Iowa is not only the first state to hold primary elections on February 1, but it’s also home to a vibrant technology and startup community. Major industry leaders including Google, Facebook, IBM, and Microsoft all have offices in Iowa. Norand Corp, now part of Intermec in Cedar Rapids, developed the core technology for Wi-Fi. Entrepreneurs in Des Moines, Iowa City, and Cedar Rapids are also building new startups every day.
What will the presidential contenders have to say to these tech-savvy and entrepreneurial-minded caucus-goers? You can join the conversation on Twitter at #IowaTech2016 and follow along by watching the livestream starting at 4pm CT at www.TheGazette.com.
This piece was originally published in TechCrunch.
Despite the unprecedented growth of the tech sector, none of the 2016 presidential candidates has really stood out when it comes to technology and entrepreneurship policy.
Given the importance of many of the issues that the startup community faces, this is really unfortunate. But not necessarily surprising. Let’s start with the data:
New firms – startups – are responsible for net new job growth in the United States.
Each new tech job is responsible for 4.3 local non-tech jobs.
High-tech startups, and their attendant job creation, exist all over the country.
All of which is to say, this community is of vital importance to our national economy. And it faces real problems that the next president will have to address. So where are the candidates?
For starters, many of these tough issues split our traditional notions of the two-party system. Take for instance the gig economy, which has pitted traditional unions against many newer tech firms. Or cybersecurity, which seemingly puts privacy advocates, law enforcement, and tech companies at odds.
And that’s not to mention the very real lack of diversity in this industry, which continues to be a serious problem without a real and promising solution in sight.
Even though allowing for more high-skilled immigration reform or doing a better job at educating American youth in STEM fields actually does have the potential to unlock scores of diverse talent for American companies, there has been little appetite in D.C. to do anything about it.
It’s true; none of these issues has an easy answer. They are hard problems that need real solutions. Many of those solutions will require bucking traditional political supporters (not to mention funders). Policymakers will have to make tough – and sometimes, unpopular – calls.
It’s only going to get harder as every company transitions to becoming a tech company, or at least a company that increasingly relies on technology.
We’ve already seen that start to happen, as traditional retailers have online stores, coffee shops and hotels provide Internet access, and banks implement online banking services. And that’s not to mention how much of people’s personal and social lives have moved online.
These issues will affect every aspect of our society and economy and more stakeholders will be at the table, demanding answers.
So you can understand why the candidates have attempted to evade these questions so far. But we should not let them do that anymore.
Election season presents an important opportunity to push candidates to go on the record, which may prove valuable for years to come.
Take then-candidate Obama, who in 2007 promised he would support net neutrality, saying unequivocally: “I am a strong supporter of Net neutrality.”
Fast forward to 2015, when President Obama followed through on that promise, strongly and publicly signalling his support for net neutrality in a moment now largely considered to be one of the most crucial in the leadup to the FCC’s historic action.
It’s not all up to the candidates, of course. This community of entrepreneurs must do its job, too. We must remind the candidates that our community – which was largely responsible for stopping SOPA and for sending 4 million comments to the FCC in support of net neutrality – is listening for answers. And voting.