WASHINGTON--Government leaders need to do more than provide bailout money for America's flailing economy, Google CEO Eric Schmidt said Monday. They need to use the bailout programs as an opportunity to invest in infrastructure and look for more innovative solutions to persistent problems.
Addressing a large audience of academics, government workers, and others in Washington on Monday in his role as chairman of the board of the New America Foundation, Schmidt laid out the myriad ways in which the government could open the doors for innovation and long-term economic growth.
While he claims he is not interested in becoming President-elect Barack Obama's chief technology officer, Schmidt's talk on Monday gave not only technical solutions to problems like the need for new energy sources and immigration reform, but policy-based answers as well.
Google CEO Eric Schmidt on Monday discussed ways the government could spur economic growth through innovation and investments in infrastructure.
(Credit: Stephanie Condon/ CNET News)Google has already made inroads influencing how the government conducts its everyday business, as evidenced by Obama's use of YouTube, and the firm opinions Schmidt offered Monday indicate the company could have a strong voice in the political philosophy of the next administration as well.
"This may be the toughest economic time that most of us will face in our lifetimes," Schmidt said, but it is also a time to look for opportunities.
"Let's not just have bailout programs," he said. "Why don't we use the stimulus money to get infrastructure built?"
Schmidt emphasized the need to invest in infrastructure, both physically and otherwise. He suggested opening up the development of smart electric grids to more innovation and creating more competition among broadband providers.
"We have to find the right balance of incentives," he said. "We've had the most extreme version of the free market approach, and we've seen some of its consequences."
Those incentives, he said, could include giving matching funds to state utilities for energy efficiency programs they already run. It could also mean funding auto companies that meet emissions standards.
Government systems could also benefit from modeling the open nature of the Internet, Schmidt said.
"Open systems have this clear promise of innovation and greater choice," he said.
He called the Federal Communications Commission's decision to open up unused broadcast TV spectrum for unlicensed use an "act of remarkable courage, and one which we applaud."
"You never know where innovation's going to come from, but with an open platform, you welcome it," he said.
With that in mind, Schmidt said it is essential that "the small start-ups with funny names get founded and get funded."
He applauded Obama's promise to double federal funding for basic research, calling it "the core aspect of America's competitiveness," but one that is dependent on government funding.
Other steps can be taken to help the U.S. maintain its competitiveness, he said, such as reforming visa policies for skilled workers.
"We train these people, we bring them to the country, and then we don't give them a visa to work here where they would pay lots of taxes," Schmidt said.
As the government embraces innovative reforms, it should reform its own practices, Schmidt said, to create more public engagement and restore trust in government.
"We can stream almost all public meetings," he said. "The bandwidth is there, so why don't we get more people involved?"
Google CEO Eric Schmidt
(Credit: Stephen Shankland/CNET News)Google CEO Eric Schmidt and Xerox CEO Anne Mulcahy will bring some tech experience to an advisory board for President-elect Barack Obama, according to press reports about an announcement from the organization.
The 17-member Transition Economic Advisory Board (TEAB) also will get a dose of technology experience from Richard Parsons, chairman of the board at AOL parent company Time Warner. Schmidt, who already had been an adviser to the Obama campaign, endorsed Obama in October.
The board is set to meet Friday before Obama's first press conference as president-elect. A report in The Guardian, among others, carried the full list:
• David Bonior (member of the House of Representatives from 1977 to 2003)
• Warren Buffett (chairman and CEO of Berkshire Hathaway)
• Roel Campos (former Securities and Exchange commissioner)
• William Daley (Midwest chairman for JPMorgan Chase; secretary of the U.S. Department of Commerce from 1997 to 2000)
• William Donaldson (chairman of the U.S. Securities and Exchange Commission from 2003 to 2005)
• Roger Ferguson (president and CEO of TIAA-CREF; former vice chairman of the Federal Reserve board of governors)
• Jennifer Granholm (governor of Michigan)
• Anne Mulcahy (chairman and CEO of Xerox)
• Richard Parsons (chairman of Time Warner)
• Penny Pritzker (CEO of Classic Residence by Hyatt)
• Robert Reich (professor at University of California at Berkeley; secretary of the U.S. Department of Labor from 1993 to 1997)
• Robert Rubin (chairman and director of the Citigroup executive committee; secretary of the U.S. Treasury Department from 1995 to 1999)
• Eric Schmidt (chairman and CEO of Google)
• Lawrence Summers (professor at Harvard University; managing director of DE Shaw; secretary of the U.S. Treasury from 1999 to 2001)
• Laura Tyson (professor at Haas School of Business of University of California at Berkeley; chairman of the National Economic Council from 1995 to 1996; chairman of the President's Council of Economic Advisers from 1993 to 1995)
• Antonio Villaraigosa (mayor of Los Angeles)
• Paul Volcker (chairman of the Federal Reserve from 1979 to 1987)
Eric Schmidt, CEO of Silicon Valley heavyweight Google, plans to campaign on behalf of Democratic presidential candidate Barack Obama.
On Tuesday, just two weeks before Election Day on November 4, Schmidt will join Sen. Obama at an event in Florida to moderate a panel on the economy, The Wall Street Journal reported Monday. Schmidt has unofficially been advising the Obama campaign on technology and energy matters.
Eric Schmidt addresses bloggers at the Democratic National Convention in August.
(Credit: Declan McCullagh/CNET Networks)Schmidt says the endorsement of a party nominee is his own, and not a statement on behalf of his company. "I'm doing this personally," he said in an interview with the Journal. "Google is officially neutral."
In August, Schmidt made an appearance at the Democratic National Convention in Denver, though not on the main stage. Rather, he took questions from bloggers in the Big Tent workspace outside the convention center, where he said Obama got a big boost in his campaign efforts from the Internet.
Google has drawn the attention of antitrust regulators in Washington for a proposed advertising deal with fellow Internet giant Yahoo, though the Justice Department has yet to take or recommend any formal action.
Schmidt addressed that issue in his interview with the Journal. "My sense is, the Justice Department makes judgments on these issues independent of politics," he said.
On Sunday, Obama got a surprise endorsement from Colin Powell, who earlier served as secretary of state under President Bush.
Sen. John McCain, Obama's Republican rival, has the backing of Silicon Valley notables including Meg Whitman, former CEO of eBay, and Carly Fiorina, former CEO of Hewlett-Packard.
Google was not immediately available to comment on the Journal report.
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