Education, Public Policy Among Challenges Facing High Tech

Technology companies may be the darlings of Wall Street, but they’re in the hot seat in Washington.

The Justice Department is suing Microsoft Corp. for alleged antitrust abuses, and the Federal Trade Commission is investigating similar charges against Intel Corp. The FBI has clashed with high-tech firms over encryption, and some members of Congress were critical of the industry for seeking more visas to import high-tech workers. And fears of widespread disaster resulting from the Y2K bug aren’t helping matters.

That leaves the American Electronics Assn., the largest trade group representing high-tech firms, with its work cut out for it this year. The Washington-based group lobbies for 3,000 software, computer, telecommunications and other companies. Half of its members are based in California.

Bill Archey, the AEA’s president and chief executive, and Joe Dooling, the association’s senior vice president for California, recently spoke with Cutting Edge about the challenges the group faces in Washington and its priorities for the Golden State:

Times: Has the high-tech industry come of age?

Archey: When I met with people in the Congress four years ago, their view was that high tech was Silicon Valley and possibly Route 128 [outside Boston]. Today, high tech is seen as national. The realization of the ubiquity of high tech--its pervasive impact--has become so much more widely recognized. It’s no longer seen as just a bunch of geeks.

Times: Does that high profile help the industry or hurt it?

Archey: The single-biggest problem facing this industry over the next five to 10 years is that technology so dramatically outpaces policy. There’s a whole series of things that are going to happen where the policy realm can’t hope to catch up to the technology.

Times: Is there a specific issue that comes to mind?

Archey: The biggest issue is privacy.

Times: How will privacy be protected?

Archey: The industry engaging in self-regulation is going to be the best answer in terms of privacy. On the Web, if you don’t have some certification that you are protecting the users’ rights, people ain’t going to that site.

Times: Why do you think self-policing is better than formal regulation?

Archey: Whatever the regulation is, it will not be fine-tuned. It will be a broad-based approach like a sledgehammer, and it will have a profoundly pejorative effect on the growth of the Internet and e-commerce-related stuff.

People don’t mind their data being used if they know where it’s going to be used or if they have the right to say no.

Times: The Clinton administration has said several times that the industry’s efforts to protect privacy aren’t good enough. Why aren’t you doing more?

Archey: I think we’ve moved fairly quickly. There’s a learning curve on this stuff.

Times: High-tech firms seem to have a bad reputation in Washington these days.

Archey: Take a look at 20th century history. No industry that has arrived and “made it” has not experienced a major populist backlash.

Times: The AEA last month achieved a significant legislative victory with a new federal securities law aimed at curbing shareholder lawsuits. Will this lead to a greater presence on Capitol Hill?

Archey: When you win, it makes people in this industry realize that the political process and the policy process could absolutely screw you if you aren’t paying attention--and that if you get involved, you might have an impact.

Times: What are the main issues for high-tech firms in California?

Dooling: Our biggest issue--and it has been for the last three to four years--is workplace preparation and education reform. We have the jobs, and we’re not filling them with California kids or California graduates. We’ve got a real spotlight on that this year.

Our companies are very active on the local level. National Semiconductor, for instance, spent $2.5 million on an Internet program to help teachers in the classroom understand the Internet and give them lesson plans to teach it to students. Altogether, our companies are spending tens of millions of dollars on education issues.

Times: Do you think the education system will improve under Gov. Gray Davis?

Dooling: It’s hard to say. So far, he’s been very supportive of what we’re trying to do. He has appointed Gary Hart as his education secretary, and Gary has always worked very well with our industry.

Times: Down the road, what do you see as a threat to high-tech firms?

Archey: The biggest problem we face is ignorance of this industry by people in the public policy world. That ignorance could absolutely kill us on the basis of laws of unintended consequences.

Dooling: We’ve helped California legislators establish an Internet caucus. It’s right in its embryonic stages. Assemblyman [Jim] Cunneen [R-San Jose], Sen. [John] Vasconcellos [D-Santa Clara] and Sen. Debra Bowen [D-Marina del Rey] are the real proponents. We’ll see where it takes us.

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Karen Kaplan can be reached via e-mail at karen.kaplan@latimes.com. Times staff writer Jennifer Oldham contributed to this report.