Obama makes Silicon Valley pilgrimage in quest to boost US innovation
President has made innovation the centerpiece of his push to revive the American economy. He traveled to Silicon Valley Thursday to woo CEOs in the capital of American innovation.
A meeting with top high-tech CEOs gives the president a chance to cultivate support for his new innovation strategy, for budget items that Republicans will want to cut, and for his own image as a leader no longer at odds with corporate America.
"He wants their blessing," says Robert Atkinson, president of the Information Technology and Innovation Foundation, a policy think tank in Washington. "He wants them to endorse and support the presidential initiatives," especially in the battle with Republicans over federal spending.
Of course, the meeting a two-way street. In addition to serving the president's agenda, the San Francisco gathering also offers an opportunity for Facebook's Mark Zuckerberg, Apple's Steve Jobs, and Google's Eric Schmidt, among others, to bend Mr. Obama's ear on issues on issues that matter to them.
The dinnertime event will be private, but a few basic interests that bring the two sides together for this meeting aren't so hard to predict.
Obama has made no secret of his desire to see faster job creation, and he has argued that promoting private-sector innovation is a key way to get there. High-tech ventures create not only jobs but also products that enhance productivity, unleashing positive ripple effects for the whole economy.
The CEOs, meanwhile, know that their companies' fortunes are tied partly to Washington policies. Some of Obama's proposed initiatives, such as bigger tax credits for scientific research, would help them. And on some fronts they'd like to pitch for changes beyond what Obama has already put in his budget.
Tax reform is one example.
The Obama administration and Congress are considering how to reform the corporate tax code, with the goal of attracting more jobs and corporate investment in the US. One shift, supported by many global companies including high-tech firms, would create a "territorial" tax system, in which corporations would face federal taxes only on income earned within the United States.
The US would lose tax revenue on foreign earnings, but corporations would be more likely to be formed in – and remain based in – the US.
In a congressional hearing this week, Treasury Secretary Tim Geithner sounded open to the territorial system. In any tax reform, he said, a guiding principle should be "that we're encouraging, not reducing, incentives to invest in the United States."
The trip meshes with Obama's goal of repairing ties with corporate America, after rocky relations during the Obama administration's first two years. And it jibes with his new innovation proposals, which Obama has outlined as the surest path toward job creation.
Obama has proposed expanding the corporate tax credit for research and experimentation and making it permanent. He's proposing new efforts to raise the quality of science and math education. And despite a tight budget, he's seeking boosts in federal sponsorship of basic scientific research.