Which Candidate Plays Better in Silicon Valley?

A political split is slicing through Silicon Valley these days, as the region’s digitocracy debates a question of relevance to voters everywhere: Which presidential candidate is best qualified to guide the nation as it rockets into the Information Age?

At issue are the candidates’ views on such esoteric matters as regulation of software encryption and biotechnology patents. But those matters quickly lead to squabbling about the more basic question of what role government should play in the emerging economy.

“I think [President] Clinton articulates a much clearer vision of the future than Bob Dole,” said Macromedia CEO Bud Colligan. “I think he understands how technology can be used to aid all people.”

To which Scott McNealy, CEO of Sun Microsystems, voices a common counterpoint: “The [Clinton] organization has billed itself as very ‘wired,’ but I’d put a ‘hay’ in front of that.”

Future politicians might be well advised to listen to such views. “Whoever first fashions an effective appeal to this new constituency will become the dominant political force for probably the next 50 years,” said Dudley Buffa, president of the nonpartisan Institute for a New California.

By most indications, the current political debate caught fire in historically apolitical Silicon Valley because of California’s Proposition 211.

Proponents contend that the ballot measure would make it easier for shareholders to sue irresponsible companies over stock price plunges. But most high-tech executives say the initiative would make it too easy for unscrupulous lawyers to file costly nuisance suits.

Both Dole and Clinton have come out against the measure. Clinton’s commitment to reform, however, has been in question since his veto last December of a federal bill limiting such lawsuits.

Congress overrode the veto, but many in Silicon Valley aren’t ready to forgive. So, when 75 executives endorsed the president in August, others counterattacked. And by Oct. 1, when GOP vice presidential candidate Jack Kemp whistle-stopped through the Valley, 225 executives had publicly endorsed the Republican ticket.

A poll of 1,013 high-tech executives released last week by H&M; Consulting of Sunnyvale found that nationwide, the group favors Clinton over Dole, 48% to 39%. But recently, Dole’s Silicon Valley backers have taken out full-page newspaper ads, including one in The Times, to counter the perception that their community is Clinton country.

The divide cuts right through many corporations. For example, E. Floyd Kvamme, one of the key organizers of the Dole-Kemp endorsement, is a partner in Kleiner, Perkins, Caufield & Byers--as is John Doerr, an outspoken Clinton backer.

Doerr says that his endorsement of Clinton is based largely on this bottom line: “This administration has the best economic record of any administration in 30 years.”

Pausing to carefully marshal his figures, Doerr lets loose a litany. Clinton, he says, reduced the deficit by 60%, took concrete steps toward balancing the budget, created 10 million new jobs, chopped 300,000 jobs from the government payroll, nurtured the lowest interest rates in two decades, and has governed during the best stock market in two decades.

Dole’s backers, in their endorsement statement, put the former Senate majority leader’s consistent support of securities litigation reform at the top of their list, followed by his positions on tax reduction and economic growth.

They also lauded Dole for supporting deregulation where it affects high-tech industry. As examples, they cited his support of restructuring the Food and Drug Administration to facilitate biotechnology testing and his efforts to relax laws governing the export of encryption technology--an area where Clinton has insisted that government has an interest in keeping a tight grip.

But the most important reason for the endorsement, the statement said, is that “Bob Dole and Jack Kemp believe in less government.”

Indeed, the role of government is at the heart of the debate, in part because that issue is still in flux for many Silicon Valley executives.

For instance, aware that public schools will produce the bulk of “knowledge” or “wired” workers the industry demands, high-tech firms increasingly offer financial and technological support to education. But there is no consensus in the Valley as to where the line between public and private funding should be drawn.

“It comes down to the question of ‘Is there such a thing as good government?’ ” Colligan said. “Clinton and [Vice President Al] Gore are pretty smart about the areas where government should get out of the way and where government should stay in.”

But other Valley executives, who credit the region’s fortunes to a risk-taking frontier spirit and entrepreneurial fervor, see the government largely as an antiquated impediment--one the Democratic ticket would bolster and the Republicans tear down.

Rodgers, of Cypress, for instance, points to what he sees as a fundamental difference between the Clinton administration’s appeal for “corporate responsibility” and Kemp’s pitch for a “socially responsible market economy.”

“Kemp thinks corporations, based on their own choices, have been leaders, that they feed this country, that they’re leading us forward in a positive way--not that corporations are led by bad guys who have to be told what to do by the likes of [Massachusetts Sen. Edward M.] Kennedy.”

Like many of his fellow Dole backers, Rodgers’ aversion to government also means an aversion to taxes, so Dole’s proposed 15% across-the-board tax rate reduction and capital gains tax cuts have financial and philosophical appeal.

As it is, Rodgers says, he invests in about 100 Silicon Valley companies that he has personally evaluated. On the other hand, he says, “if you tax me an extra million dollars, I will mail my money to Washington so that Al Gore can invest it in the ‘electronic data superhighway,’ about which he has no clue whatsoever.”

For his part, McNealy, of Sun Microsystems, sees both parties and candidates as relatively clueless about how to grapple with such potentially overwhelming new realities as his company’s Java Wallet, a virtual network that will use smart cards and digital cash to create “economies that know no boundaries.”

Still, he says, “Dole and Kemp have a better clue.”