WASHINGTON — One of the great lessons of the Internet is that innovation can come from anywhere. It’s spontaneous, it’s unpredictable and it harnesses the collective intelligence of a vast base of users to solve some incredibly difficult problems.
So, with the country facing what seem to be unprecedented challenges, why can’t government work the same way?
“It’s a cliché to say that this is one of the great crises that we’ve faced, but this may be one of the toughest economic times that most of us will face in our lifetimes,” Google CEO Eric Schmidt said during a policy talk before a crowded audience here in the Ronald Reagan Building amphitheater. Yet despite the grim assessment, Schmidt declared himself an “optimist,” owing to the Internet’s potential for opening up conversations around policy decisions to anyone who’s interested.
“Every American can now create and publish their ideas,” he said. “I don’t think we fully understand how liberating that is.”
The list of problems that a more open, receptive government could tackle is long, he said. Clean energy, the subject of much of Schmidt’s talk, is at the top.
For Schmidt, who speaks of an energy revolution in almost evangelical terms, the path to clean energy would uncover the solution to some of the most urgent problems of the day. It could blunt the effects of climate change, create new growth industries to reignite the nation’s economy and sharpen its competitive edge, while at the same time reducing dependence on foreign oil.
“Think about what that does to … oil-producing [nations] and their ability to set oil prices, and have us go through the kind of teeter-totter that we just went through in the last six months,” Schmidt said. “Why don’t we figure out a way to never let that happen?”
Not surprisingly, his company is also exploring how it can leverage cleaner energy. Google has developed an energy plan of its own that calls for carbon-free electricity by 2030, and has launched an ambitious partnership with General Electric.
But Schmidt is hoping to see action taken at a policy level on pushing clean energy. For instance, policymakers have lately been debating the merits of a second economic stimulus package — which President-elect Obama supports — as well as a bailout of the nation’s slumping auto industry.
Schmidt,said that if a second stimulus plan is deemed necessary, an appropriate use of the money would be to jumpstart the green-energy revolution by putting the infrastructure in place, creating a wellspring of jobs in the process.
[cob:Special_Report]At the same time, he suggested that any bailout for Detroit be tied to incentives to produce more fuel-efficient cars, particularly plug-in hybrids.
But he argued that we can’t count on the industry heavyweights alone to solve the energy problem, or any great challenge of the day. After all, the Internet has proven that innovation can come from unlikely corners.
“It’s really important that small startups with funny names — the next generation of Googles — get founded, get funded, and become successful in this new regime,” he also said. “Because that’s where the wealth will be created.”
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Can Web 2.0 launch Government 2.0?
Schmidt is wearing many hats these days. As an economic adviser to President-elect Obama and the chairman of the New America Foundation, a Washington think tank, his interests range far beyond the pressure of maintaining an investor-friendly balance sheet at one of the world’s most prominent tech companies.
While Schmidt reminded the audience that he was not appearing as a representative of Obama’s team, he praised some of Obama’s policies and president-elect’s use of technology to spread his message and solicit new ideas.
“It seems to me that you want to encourage debate,” Schmidt said. For the average citizen, “basic information that government uses is not available. You still can’t fundamentally see the information sources that are in use.”
In that spirit, Schmidt imagines the government moving in a more Web-friendly direction, embracing Web 2.0 technologies like blogs and YouTube-style videos and live-streaming all public hearings. That could also entail publishing its data in a format that could be indexed by search engines like Google.
Schmidt held up the U.S. Patent Office as an example. One of the critical shortcomings of the system has been the staggering backlog of the pending patents. As a way to better cope with that backlog, however, the Patent Office is conducting a trial program through which it taps into the wisdom of the crowds.
In the program, pending patents can be viewed online, so interested parties can comment on their merits or shortcomings — sort of a prescreening process so patent officers have some critical information when they come to evaluate the invention.
Of course, those inventions begin further up the pipe. Patent reform, for instance, sits high on Google’s policy agenda, although major legislation that Google backed didn’t clear Congress this session.
Schmidt, who made the delicate balance between the free market and prudent regulatory policy a theme of his talk, touched on another hot-button issue for the tech industry: tax credits and government funding for research and development.
[cob:Pull_Quote]Just like the Internet itself grew out of a government-funded project, many of the core breakthroughs that find their way to market years down the road come from universities and national laboratories. But funding is a perennial issue.
“The situation in R&D in the last few years has not been good. It seems obvious, but let me state it: Why do we fund R&D? Because no one else does,” Schmidt said. “It’s actually pretty simple. Businesses by law have to serve their shareholders. They’re not going to fundamentally invest at the level of pure research. It makes no sense for them.”
The proposition is simple for Schmidt. The next wave of innovation, with all the economic spoils it will bring, will either come from the United States or one of its economic rivals overseas — whoever’s willing to spend for the research.
Schmidt hit on another pain point for the tech industry: foreign workers. Tech companies have lobbied for years to raise the cap on the visas allotted to foreign workers, known as H1-B visas — a cap that aims to protect the jobs of U.S. workers.
In many cases, however, those workers come to study at U.S. universities, but struggle to secure the visas they need to stay here and work, Schmidt said — a condition that left him fuming.
“We train these people, we bring them to the country. We have the best university system in the world, bar none, and then we won’t give them the visa to work here — where they would then pay lots of taxes,” he said. “Help me with this reasoning.”
“It’s bizarre. It’s disgusting. Sorry, I have a strong opinion.”