Ex-CEO Looks at US Technology Policy

INTERVIEW

JOHN YOUNG, who retired as president of Hewlett-Packard Company two weeks ago, has spent about 10 years trying to interest Republican presidents in a national technology policy.

Now, the lifelong Republican has found a sympathetic ear from a Democrat. Mr. Young has played an important role in shaping President-elect Clinton's technology policy and is frequently mentioned as a potential cabinet member. In a telephone interview, he talked about national technology policy:

Do Democrats and Republicans agree we need a technology policy?

Yes. In fact, the Bush administration worked through the interagency process the idea that working on generic, pre-competitive technologies is a legitimate interest of public policy. And that's a landmark change from where we've been since World War II.... My concerns there are more the `concertedness' of the [Bush] effort.

Does the Clinton technology policy make more sense?

Eminent sense, since it builds on all of the ideas I've been working on for most of the last 10 years.

Doesn't technology policy really mean government will pick winners and losers in the marketplace?

Typically, what's meant by picking winners and losers is much closer to the product end. [For example:] "We ought to support getting back into the consumer electronics business, so let's make a high-definition television set and we'll get the government to fund it." Now that's what I call "picking a winner and losers." That is totally inappropriate for government.... They will do it wrong probably every time.

But you're talking about technology policy creating generic, pre-competitive [technologies]. Generic - that means it applies to a lot of sectors of the economy. It's not a television set. It might have to do with advanced digital display systems but that could be used in a variety of industries.

Some economists argue we would be better off if government just got its own house in order. Isn't a balanced budget more important than funding new research?

I don't think that's the right question to start from. The right question is, first of all: Is the support of research and development broadly legitimate public policy? The answer to that is, clearly, yes. Every economist will agree ... that the private sector will invest ... less in research and development than [what] is in the public interest, because no private firm can capture [all of] the benefits of research and development. Robert Solow, who got the Nobel Prize for his work ... showed that since World War II, more than half of the productivity growth rate of the nation is attributable to better technology. Yes, you need educated people. Yes, you need money to put ideas to work. But absent the better idea, you don't get the growth.

How should the US balance defense and civilian R&D?

Historically, the government share that has gone to defense R&D has been about half of that total. That, of course, has been built up so that it's about 60 percent right now.... So, if we just got back to 50-50, we would free up $7 billion that could be deployed to other commercially relevant technologies. Given the economic warfare in the years ahead that I foresee, as opposed to the real shooting warfare that we've been used to, maybe that needs to be upside down. Maybe 60 percent of that over time nee ds to be on commercially relevant R&D, and only 40 percent on defense.

Does a national technology strategy make sense anymore when a government's corporate partners are global entities?

Companies certainly compete in the international marketplace. The flip side of that is equally true. Countries have to compete for an environment that supports jobs.

What conversations have you had with Mr. Clinton?

We've had some occasional phone conversations about various things, but nothing very serious.

Would you like a Cabinet post?

I don't have any comment on that. I'm happily enjoying my first 10 days of retirement and looking forward to doing a lot more fishing.

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