The president’s annual State of the Union address Tuesday night touched on a lot of tenets that are central to his administration and his campaign for re-election, one of which includes promoting the creation of high-tech jobs in the U.S.
President Obama talked about how the tax laws should be adjusted so that Warren Buffett doesn’t pay a lower tax rate than his secretary. Mr. Obama called for more control over interest rates for student loans and breaks for homeowners struggling to pay their mortgages. He stressed the need for investment in renewable energy sources.
And of course he talked about jobs, emphasizing the need for high tech jobs to be created at home. “If you’re a high-tech manufacturer,” he said, “we should double the tax deduction you get for making your products here.”
It’s not surprising then, that today the president is scheduled to tour an Arizona plant operated by Intel, the maker of computer chips. The visit is intended to draw attention to an operation that is manufacturing high tech-components at home. According to Brooke Crothers, writing in CNET, “In Chandler, Intel will make its next generation of 14-nanometer (nm) processors that will be its most highly-integrated and power-efficient to date. Those chips–many of them a so-called SoC or system-on-a-chip–will power future ultrabooks, tablets, and smartphones.”
A tour of Intel is fine but what about bigger tech companies? What about Apple, the company that just reported earnings that blew away all of Wall Street’s expectations? Apple does most of its assembly work in China. Could any incentive program be enough to bring those jobs back to the United States?
“The devil would be in the details, but I think that’s a pretty tough road to hoe,” says Jonathan Zittrain, a professor of law and computer science at Harvard and founder of its Berkman Center for Internet & Society. “Because any form of permanent subsidy is going to run into free trade issues, into sustainability issues – for how long does the government want to subsidize particular things? I think the kinds of proposals with luck the administration would have in mind are proposals that are designed to get the avalanche started, and then let the weight of gravity carry it the rest of the way, and that would include educational ideas, getting a workforce that is going to be able to do the sort of innovation that really is important.”
Obama tied the creation of high tech jobs to the need to invest in education so that there would be people in the United States to take the tech jobs of the future. “Pound for pound, there’s a sense that building the iPhone overseas is not as worrisome as designing, conceiving of the iPhone overseas,” says Zittrain. “We want the big ideas happening in America, and then being able to spread throughout the rest of the world, hoping that the future is banking on that, rather than on who can provide the absolute rock bottom labor in producing the physical product associated with the high tech job.”
Also on today’s program, we talk with Cotter Cunningham, the CEO of WhaleShark Media, which operates the popular coupon website RetailMeNot.com. It has a new shopping app coming out today that lets you go into a store, find an item you might wish to buy, and then look for coupons. The coupons might be from the store you’re in or from a totally different store. “It’s a great point and I think stores are really struggling with that,” says Cunningham. “We don’t offer bar code scanning, but I think it’s a big issue and one we struggle with too.”
So I asked him how his company struggles with it. “I think it’s a very fair point to say stores are going to the trouble of building and staffing and having the inventory there.”
But that didn’t stop the company from building that into the app? “Exactly, but consumers are going to do what they’re going to do, so we have to instead find a way to help consumers get the best deal possible and hopefully the stores will come along.
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