Startup News Digest 12/23/16

Our weekly take on some of the biggest stories in startup and tech policy. To receive this weekly digest in your inbox, sign up at

A Big Year for Startup Policy in 2016. The Startup News Digest will be taking a hiatus over the holidays, but you can still get your startup policy fill on our blog. Yesterday, we began publishing Year in Review posts on some of 2016’s most notable debates in tech and entrepreneurship. Watch this space for reports on capital access, intellectual property, net neutrality, emerging technologies, and more over the coming days. Thanks for all of your support in 2016, and we’ll catch you in the new year!

Working Group Backs Strong Encryption. The House Encryption Working Group released its long-awaited report on Tuesday, and tech found a lot to like in the document. The report explicitly states that “Any measure that weakens encryption works against the national interest,” signaling that policymakers in Congress are moving away from the binary anti­-encryption rhetoric that dominated much of the conversation in DC this year. Established in March, the working group was formed to provide members of the House Judiciary and Energy & Commerce Committees with a venue for exploring issues around encryption in a balanced, non-biased way. The report shows a thoughtful approach by the group’s participants, and we hope that its conclusions convey a clear message to Congress’ encryption critics: Committee leaders in the House with jurisdiction over these issues will not be sympathetic to policies that undermine encryption, such as ill-conceived backdoor mandates.

Women and Minorities Still Underrepresented in VC Industry. Last week, the National Venture Capital Association (NVCA) and Deloitte published the findings from a joint study on the racial and gender makeup of the venture capital workforce. Despite comprising over 45 percent of the total workforce, women represent only 11 percent of investment partners. The racial gap is persistent within the industry as well. Non-white employees comprise 22 percent of the venture capital workforce, but Black employees only account for 3 percent, while Latino employees only account for 4 percent. In addition to these findings, the report concluded that firms with human capital strategies, as well as talent programs, improve diversity on VC teams. The venture capital industry has the power to help transform diversity in tech, and we are glad to see NVCA proactively engaging on these issues.

White House Calls for Growth of AI. With just a month until President-elect Trump is sworn in, the White House released a report this week that examines the future of artificial intelligence. Interestingly, while the report warns of the millions of American jobs that will be displaced by AI over the coming years, the Administration ultimately concludes that we need more AI, not less. Arguing that AI has the potential to massively increase economic productivity and help America stay at the cutting edge of innovation, the White House calls for for proactive engagement by policymakers to advance the technology while mitigating its potential negative consequences. Specific policy recommendations include funding research and development of AI, investing in education and training, and modernizing and strengthening the federal safety net. We welcome the White House’s efforts around AI, and hope that the next Administration will maintain a thoughtful approach to the issue. The AI future is coming, and policymakers should actively embrace and guide it, rather than trying to shut it down.

Uber Moves Self-Driving Pilot to Arizona. In last week’s digest, we covered Uber’s clash with the California Department of Motor Vehicles (DMV) over the ride-sharing giant’s launch of a fleet of autonomous vehicles in San Francisco. A disagreement over permitting led the DMV to revoke the registration of 16 cars in Uber’s self-driving fleet on Wednesday, forcing the company to remove its autonomous vehicles from the road. In response, Uber announced that it was moving its self-driving cars (via self-driving trucks) to Arizona, where the pilot would be re-launched. No special permits are required for self-driving cars in Arizona, and the state’s Governor Doug Ducey promised a more favorable regulatory environment than what the company faced in California.