Economy & Jobs

VC Tech Insider: Nation Will Thrive When Middle America Gets Its Fair Share

Ronald Klain is executive vice president and general counsel at Washington, D.C.-based venture capital firm Revolution.

Much of Silicon Valley may be mourning Hillary Clinton’s loss to Donald Trump last month, but at least one tech insider believes Silicon Valley itself helped hand Trump his victory.

Economic anxiety outside of the technology centers was a major factor in Trump’s victory, says Ronald Klain, executive vice president and general counsel at Washington, D.C.-based venture capital firm Revolution. When voters heard Clinton talk about adding jobs in clean energy — an industry tied more closely to California and New York than to any part of the Rust Belt — they felt excluded. Their wariness may well be justified, according to Klain. “We bear some responsibility for this in the sense that the tech community has largely been focused on funding companies in just three parts of the country,” Klain said during an interview for CALinnovates’ “A Step Ahead” podcast, adding that those areas — Silicon Valley, New York and Boston — receive an estimated 75% to 80% of all venture capital funding in 2015. “This industry hasn’t done a good job of funding growth and innovation in the other 47 states, and it’s time to change that.”

How? For starters, Revolution has a program called Rise of the Rest, which invests primarily outside of Silicon Valley. Twice a year, the firm rents a bus and visit places such as Ohio, Indiana and Michigan to hunt for promising startups that need money.

“Silicon Valley is a national treasure; it is a global resource,” says Klain. “But we can’t have a country where only one or two or three parts of the country are thriving.

Listen to the full interview here:

 

Like what you hear? Subscribe to A Step Ahead on iTunes.

Welcome To The Resistance: Assemblywoman Lorena Gonzalez Prepares To Fight Back Against Trump

Assemblywoman Lorena Gonzalez is not going to take Donald Trump’s presidential victory sitting down. The California state representative has spent her career protecting the rights of the many immigrants who live in her district (the 80th) south of San Diego. She’s not about to let an anti-immigration administration trample on those rights.

“California is a laboratory of the left, and we’ve shown you can move forward with a progressive agenda and it will work,” she told CALinnovates Chief Evangelist Kish Rajan during an interview on the podcast “A Step Ahead.”

Although she views Trump’s plan to build a wall as mostly symbolic, she’s still worried about what his actions will mean for people such as the Dream Act kids, who willingly handed over their parents’ addresses (even though they are here illegally) to secure their own visas. Now the government has that information and may use it to deport people.

“They’re scared the government is going to break up their families,” she said.

Gonzalez also plans to fight for people in the service industry. While she acknowledges that the technical marvels that employ so many people in Silicon Valley are costing jobs in other parts of the state and country, she believes there’s still hope. Automation doesn’t mean an end to human workers — it means people will still need to operate and service machines and provide some human contact in settings such as stores and salons.

“You could have a robot cut your hair, but there is a social aspect to the service economy,” said Gonzalez. “We don’t talk about that a lot.”

To prepare the workforce of the future, Gonzalez believes we also need to rethink education. The idea of everyone going to a four-year college is a lofty one but may not be realistic or necessary, she says. She would like to see more apprentice programs, not just in tech but in industries like child care and health care.

“Going to college and studying sociology might not be the best path for everyone.”

Listen to the full interview below:

Like what you hear? Subscribe to A Step Ahead on iTunes.

Silicon Valley Rejected Trump. How Will The Industry Work With The New Administration?

Steve Westly moves easily between the worlds of technology and politics. The venture capitalist, who was an early investor in Tesla, served as state controller and chief financial officer of California between 2003 and 2007.

Now, like many in Silicon Valley, he is watching cautiously as President-elect Donald Trump forms his cabinet and starts to signal what his priorities will be over the next four years.

Despite Trump’s rhetoric during the campaign, when he railed against immigrants, called climate change a hoax and threatened to start a trade war with China, Westly believes that when it comes down to making real policy, Trump will back down on some of his most damaging rhetoric.

“I think Silicon Valley will fare just fine,” Westly told CALinnovates Chief Evangelist Kish Rajan. “Silicon Valley is getting bigger, not smaller. It is the tech center of the world, and I don’t think Trump wants to slow that growth for any reason.”

Immigrants have proven to be the secret sauce of Silicon Valley helping build companies that have created thousands of jobs. Renewable energy is quickly getting more affordable than coal and natural gas, and almost every economist agrees that a trade war with China would be a disaster.

But that doesn’t mean the Valley should be complacent. The economic dislocation that swept Trump into office is a growing problem.

“The 800-pound gorilla in the room is that new technology is coming,” says Westly. “But we have to get smarter about re-educating the American workforce. We have not done that nearly well enough in the past.”

Listen to the full interview here:

Like what you hear? Subscribe to A Step Ahead on iTunes.

After The Election: What Is Silicon Valley’s Responsibility?

Silicon Valley is just starting a long conversation about what the technology industry will look post-election. There’s no denying that things like fake new stories and filter bubbles strengthened the digital walls that are dividing the country. But that’s not where the conversation should end.

Over the coming months, we will be using A Step Ahead to explore questions around how much responsibility Silicon Valley should bear and what the industry can do going forward to help unite the country and build a stronger economy for everyone.

“This is a real opportunity for the technology community at large to force correct a little bit,” said CALinnovates founder Mike Montgomery on the latest A Step Ahead podcast. “Silicon Valley needs to fully embrace that the world changed on election night.”

In addition to thinking about social media, the industry will have to reckon with what role hacking may have played in the election and how it might hurt politics going forward. Tech titans will have to think carefully about how technology can help everyone, not just the people who are profiting from venture capital money, and we will all have to continue to talk about the ways in which government can harm or help the tech industry’s growth.

Listen to the full podcast here:

Like what you hear? Subscribe to A Step Ahead on iTunes.

Graham Richard Is Bringing Business And Government Together To Encourage Clean Energy

There’s enormous potential in clean energy. Not only will it finally wean us off of harmful fossil fuels, but it will create an entire new industry with lots of new jobs.

But in order to make this vision of the future a reality, businesses and government need to work together. That’s where Graham Richard comes in.

The former mayor of Ft. Wayne, Indiana, Richard is now chief executive of Advanced Energy Economy, a San Francisco-based advocacy firm that is working to bring about a “prosperous economy based on secure, clean, affordable energy.” Richard works with companies such as Apple and Facebook that want to purchase more clean energy. He also works with federal and local governments to put policies in place that encourage the growth of the clean-energy sector.

“I’m more optimistic today than I have ever been,” Richard told CALInnovates Chief Evangelist Kish Rajan during an interview for the podcast “A Step Ahead.” “Because of innovative forces, the job-generating and economic impacts are becoming more effectively understood.”

Richard understands that in order to bring about a truly robust renewable economy, we need more than clever entrepreneurs coming up with great ideas like Nest and Tesla. We need the government to make fundamental changes in the way utilities are built and regulated. Instead of siloed regulations that look at things like the energy grid and renewables as different beasts, we need system-wide regulation that can bring lots of different players to the same table.

“Innovation in environmental technology is creating a $200 billion market,” says Richard. “That could climb to a $1 trillion market by 2030 and create new jobs all across the country.” If everyone comes together to make it happen.

Listen to the full interview below:

Like what you hear? Subscribe to A Step Ahead on iTunes.

The 3 Words Shaking The Tech Sector: President Donald Trump

Donald Trump’s election to the U.S. presidency was a political earthquake that leaves the structural integrity of Silicon Valley’s economy in question.

“It’s the dawn of America that I think everyone is trying to put their finger on,” CALinnovates Executive Director Mike Montgomery told Chief Evangelist Kish Rajan on a special post-election episode of their podcast, “A Step Ahead.”

Right now, it’s hard to say what a Trump presidency portends for innovation, technology and public policy. Whereas Clinton had a detailed section in her policy platform dedicated to technology and innovation policy, Trump’s campaign hasn’t offered such guidance.

One thing we have some insight into, however, is Trump’s stance on immigration, which Montgomery says could have grave implications for talent acquisition, entrepreneurism and economic growth in California. For example, the H-1B visa program brings in a large portion of the talented coders who keep Silicon Valley humming. If he restricts skilled visas to make jobs available to Americans, that could hinder growth at high-tech companies. And the lack of a robust talent pipeline, already a concern for the tech sector, could become even more dire if the state’s top universities no longer matriculate STEM students from foreign countries.

If the new administration doesn’t show a commitment to creating conditions that appeal to businesses here in the U.S., might we see a tech drain out of the U.S.? “I certainly hope not,” says Rajan. “But I think it’s something that we have to think about.”

Listen to the full interview below:

Like what you hear? Subscribe to A Step Ahead on iTunes.

The Next Shared Economy

By: Mike Montgomery

Economist Paul Krugman has pointed out that in the future, as computers start to handle everything from tax law to driving, the jobs that will be most in demand are the ones that can only be done by humans: things like gardening, house cleaning and plumbing. A higher value will be placed on jobs that a computer can’t do.

But talk to entrepreneurs in those kinds of fields today and they’ll tell you their biggest challenge to building a business is finding customers. For skilled laborers who want to work on their own, time spent chasing leads and marketing is time they’re not getting paid for their work. Also, these entrepreneurs still have to worry about things like inventory management, invoicing and sometimes payroll, but because time is money, the time involved in those tasks can make growing a sustainable small business incredibly challenging.

Enter the next phase of sharing-economy platforms, gig economy, or what I like to call the personal enterprise economy. Thumbtack, a San Francisco-based company that has raised $125 million and is valued at $1.3 billion, connects skilled workers with customers, taking a big burden off of the backs of these entrepreneurs. While most sharing-economy companies are creating platforms that give people ways to earn money between jobs or on the side, Thumbtack is trying to help professionals build full-time companies. According to a new report from the company, two-thirds of the professionals on its site are running their businesses full time.

“Tech helps liberate and empower people,” says CEO Marco Zappacosta. “It helps them build on a business and lead their lives the way they choose.”

Read the full article here.

Hope For Startups: US Supreme Court Agrees to Hear Design Patent Dispute

By: Tim Sparapani

The annual tech startup and innovation festival held annually in Austin, Texas known as South by Southwest Interactive (SXSW) has recently ended. While all the big tech companies were there strutting their stuff along with all the companies that are trying to reimagine themselves as tech companies, the real stars of the show are the start-ups. Tens of thousands of people attend annually to find or become the next big thing, which his why I applaud the US Supreme Court for giving those strivers and innovators a win this week by deciding to hear the design patent appeal in the five year old battle between Apple and Samsung.

More about the big guys in a minute and their fight, which I’ve written about before here: http://www.wirelessweek.com/article/2016/02/us-supreme-court-should-clarify-law-design-patents. But before we get there let’s talk about what’s at stake in the case for startups and why it is so important that the Supreme Court is revisiting the lower court’s mistaken ruling.

Turns out the big things all started out as small things and they all needed a lot of luck and lots of care and feeding to grow and prosper. Most especially, they needed to not have extraordinary and unnecessary barriers put in their place. Startups are like salmon swimming upstream to spawn. The odds are already long that they will reach their goal. Any additional barrier put in their way, like a dam blocking a river, can exhaust the startup and rob it of its vitality thereby preventing it from reaching its goal. The absolute last thing that a tech startup needs is to have to – after coming up with a great idea to take to the market, struggling to raise capital, forging a team and bringing a product to the market – fight unnecessarily with an incumbent about the design of their product. But, unless the US Supreme Court steps in and reverses the lower court’s decision, that’s likely to be an all too common scenario for startups. As soon as the next exciting startups get some momentum going they are likely to face a new breed of patent trolls that could halt their progress entirely by waving about an alleged infringement of a design patent.

The long festering dispute between Apple and Samsung focuses on whether Samsung infringed design patents covering elements within Apple’s iPhone. In simplest terms, a design patent historically has been intended to protect and incentivize designers and inventors creative and innovative work. The US Federal Circuit Court of Appeals unwisely ruled in these big kids’ dispute that, despite the fact that tens of thousands of patents are jammed into every smartphone, an alleged infringement of just one design for one of many elements of the device itself can lead to extraordinary damage awards against the infringer.

Read the full article here.

TV’s App-Based Future Is At Risk

By: Tim Sparapani

Today, we are closer than ever to that dreamy, sci-fi-ish reality of being able to watch anything we want, whenever we want, wherever we want on the device of our choosing. Services like Netflix NFLX -3.39%, Amazon and Hulu (also known as online video distributors, or OVDs) have made apps the norm for streaming video. And thanks to apps from pay-TV providers, and from programmers like DirecTV’s Sunday Ticket, HBO GO, WatchESPN and FXNOW, many “TV” viewers can use their cable, satellite or IPTV subscriptions to watch shows on any device in any way they like.

So what exactly is broken about this system? Most viewers would say nothing. There’s fantastic content available 24/7, and it’s more convenient than ever to consume. This sounds like a complete win for consumers in an era that is undoubtedly television’s golden age 2.0.

The emergence of the iPhone ushered in the era of the app, which was heartily embraced by consumers. We now live in an app-based society where the majority of our lives happen online. Food delivery via telephone has gone the way of the dodo; today we can push a few buttons and order from Postmates or DoorDash instead. No longer do we need to stand on a street corner and flag a taxi, as Uber and Lyft have got us covered. If you’re a music fan, nearly gone are the days of buying and spinning CDs; today a slew of apps stream your favorite artists or help you discover new ones. And television is becoming no different. There is a way to deliver television content without the need for a box. Even Apple AAPL -2.86%’s Tim Cook calls apps “the future of television.”

Read the full article here.