Volume 4, Number 4 – December 2007

THE CANDIDATES SPEAK: ON ECONOMIC DEVELOPMENT AND THE INNOVATION ECONOMY

If you’re like us and you don’t live in Iowa or New Hampshire, you’re probably not yet fully engaged in the 2008 Presidential campaign.  It just seems too early to heavily delve into the candidate’s position papers and views on myriad issues.   Well, things are going to heat up in 2008 so it’s probably time to start getting a little more focused.  After all, this is a consequential election and it would be good to know where the candidate’s stand on issues other than the cost of John Edwards’ haircuts, Hillary’s clothing choices or whether or not Fred Thompson is lazy.   We’re trying to help in this issue of EntreWorks Insights.  We’ve dug through the various candidate’s web sites and position papers and tried to give a sense of how they might govern in issue areas such as regional economic development, science and technology, innovation, and the like.   It’s still a little early for extremely detailed policy proposals, but you can get a sense of how candidates might govern if elected to our nation’s highest office.

You can find our results below.  We’ve tried to briefly present where each of the major Democratic and Republican candidates stand on these issues.  We’ve focused on the most prominent contenders (sorry Kucinich or Paul supporters!) and have tried our best to tell the straight story.  These write-ups should not be construed as endorsements or support for any of the candidates as EntreWorks Consulting is a strictly non-partisan operation.  We welcome your feedback and opinions.

DEMOCRATS

Hillary Clinton (www.hillaryclinton.com)
Not surprisingly, Hillary Clinton is one of the few candidates (Democrat or Republican) to have a detailed innovation agenda.   She unveiled “Version 1.0” of her innovation agenda in May and is still requesting comments on her campaign web page.  She has developed a nine-point plan that, in many ways, sounds a lot like the COMPETES Act which sailed through Congress this year.  She proposes to increase spending on key research agencies (like the National Institutes of Health) and to expand investments in science, technology, engineering, and math (STEM) education.  She has also proposed a new $50 billion Strategic Energy Fund to increase investments in cutting-edge energy related research.  This fund is also part of her energy and climate change plan announced in November.

As a Senator, Clinton was rightly lauded for her commitment to rural economic development.  She has long championed development in upstate New York, and she introduced several bills seeking to expand Federal investments in rural development.  The Rural Investments to Strengthen our Economy (Rural RISE) Act of 2007 exemplifies her approach.  It would create a new National Board on Rural America that would oversee rural development planning and investments.  It would also create new programs to support small business owners and entrepreneurs located in rural regions. 

John Edwards (www.johnedwards.com)
Former North Carolina Senator John Edwards has based his economic strategies around a message of helping working Americans.  Many of his ideas can be found in “The Plan to Build One America,” an 80-page campaign booklet that details the Edwards economic and foreign policy programs.  Edwards’ focus on working families means that his economic platform contains lots of ideas for boosting wages, strengthening labor laws, and encouraging family savings.   Edwards’ innovation agenda includes support for expanded STEM education and increased funding for civilian R&D agencies such as the Energy Department and the National Science Foundation.

Edwards has also presented a plan for supporting American manufacturing that includes an expansion of skills-based training programs (Training Works), new investments (up to $1 billion) in energy research, expanded benefits for displaced workers, and aggressive efforts to fight offshoring. Like other Democratic candidates, Edwards’ rightly notes that his plans to expand health insurance coverage can also help improve American manufacturers’ competitive position.

Like Senator Clinton, Edwards has also proposed a big push to support rural development.  His Rural Recovery Act would provide new investment in rural equity capital sources, rural broadband development, as well as efforts to support rural schools and health care institutions. 

Barack Obama (www.barackobama.com)
Illinois Senator Barack Obama may have the “freshest” innovation plan as he recently unveiled his Innovation Agenda in a speech at Google headquarters on November 14^th.   Obama points out that his campaign has the strongest “net-roots” and thus offers an example of how he would use technology to transform government and politics.  In general, his technology plan is heavy on efforts to make government processes more transparent and open.  He supports creating a new government Chief Technology Officer (CTO) to oversee these efforts and to help deploy next-generation broadband across the US.  Obama’s energy plan calls for investing $150 billion (over ten years), and includes a $10 billion Clean Technologies Deployment Venture Capital Fund to spur technology commercialization. 

Obama also supports new investments in training (up to $1 billion for a new career pathways program), an expansion of SBA’s capital access programs, and new efforts to spur STEM education, especially for underserved minority students.  Finally, he has called for a national network of business incubators, to be backed with $250 million of Federal money that will be located in disadvantaged communities across the US. 

Bill Richardson (www.richardsonforpresident.com)
As New Mexico’s Governor, Bill Richardson has built a reputation as a strong advocate for his state’s economic development.  He has been especially aggressive in recruiting new industries—like film and space—to New Mexico.  His work as Governor is reflected in his economic plan:  “Creating a New American Century of Prosperity.”   His plan is based on three main planks:  fiscal responsibility, investing in technology and innovation, and investing in the American workforce.  On the fiscal responsibility front, Richardson has a strong gubernatorial record as a tax cutter.  As President, Richardson would seek to cut wasteful government spending and also roll back many of the Bush Administration tax cuts.   He hopes to support innovation by more investments in R&D, expanded small business capital programs, and the creation of regional innovation clusters around the US.  Finally, Richardson will seek to strengthen the workforce through a series of tax incentives for firms who provide good paying, high-skill jobs, and who provide benefits and training to their workers. 

REPUBLICANS

Rudy Giuliani (www.joinrudy2008.com)
Former New York Mayor Giuliani is emphasizing other issues in his campaign, but he is making a strong case based on his economic record as New York’s mayor.   Portraying himself as a tax-cutting fiscal conservative, Giuliani can point to a significant improvement in New York’s financial situation during his tenure.  He backed numerous tax cuts, and also kept a tight lid on the City’s public spending.     He also sought to aggressively privatize many of New York City’s government services and agencies.  He has promised to bring a similar brand of fiscal discipline to the White House through his “Twelve Commitments” plan which includes calls for major tax reform, tax cuts and fiscal discipline.

While Giuliani has not staked out formal economic development positions as part of his current platform, he was an aggressive development advocate while serving as New York’s Mayor.   He is best known for his work in reducing crime as means to improve city life.  Indeed, he is on record stating that the number one principle of economic development is controlling crime.   At the same time, he was a strong advocate for efforts to retain key financial industries in Manhattan, and to attract other sectors (such as film) to the City.

Mike Huckabee (www.mikehuckabee.com)
Huckabee’s rise in the polls largely results from his appeal to social conservatives, and his campaign is focusing heavily on these issues. Huckabee’s record as Governor has been criticized by groups like the Club For Growth who contend that Huckabee did not do enough to cut taxes and to restrain government spending during his tenure.

Huckabee’s economic platform differs from that of other Republicans.  Like them, Huckabee supports efforts to reduce the size of government and to promote free trade and open markets.  But, many of his specific proposals are unique when compared to those of his competitors.  Huckabee’s most far-reaching program calls for a complete elimination of the current tax regime to be replaced by a consumption-based FairTax.  He contends that the new FairTax will reduce administrative burdens and also provide a strong competitive stimulus to American business.  On the education front, Huckabee is a strong advocate for music and arts education as a means to nurture creativity and innovation among American youth. 

John McCain (www.johnmccain.com)
As a long-serving Senator from Arizona, John McCain has a long voting record that allows us to get a good sense of where he stands on the issues.   McCain is best known for his work on issues like national security, campaign finance reform, and cutting wasteful government spending, but he does have strong opinions on key economic issues.   McCain’s straight talk was in evidence in recent remarks to ethanol advocates in Iowa when he stated:  “I oppose subsidies.  Not just ethanol subsidies.  All subsidies. . . . Entrepreneurs should not be disadvantaged by earmarking and pork-barrel spending that favors politically connected competitors.”

Like most Republican candidates, McCain supports tax cuts and efforts to rein in government spending.  But McCain has expressed support for new efforts to help train and support displaced workers, through community colleges and other support vehicles.  McCain is also something of a Republican outlier on immigration issues.  Unlike his competitors, he has supported efforts—including the 2007 McCain-Kennedy immigration plan—that seeks to support immigration as part of a pro-growth economic strategy.

Mitt Romney (www.mittromney.com)
Romney is the one Republican candidate with an extensive business background—as a consultant and venture capitalist.  Among Republicans, he has staked out the most detailed positions on innovation and technology policy.  He has expressed support for expanding the H1-B visa program as a means to strengthen the technology sector.  As a former venture capitalist, he’s also on record opposing efforts to impose new taxes on carried interest proceeds from VC investments.   While serving as Massachusetts’ Governor, Romney’s signature economic development program was the creation of Regional Competitive Councils and cluster groups designed to stimulate development of specific regions or industry clusters.  A number of these councils were established, but most have been in operation for a relatively short period. 

In his broad economic platform, he points to tax cuts and reduced regulations as primary tools for stimulating the economy.  In particular, Romney has been a strong advocate for “pro-growth” tax policies.  For example, as Massachusetts Governor, he fought a tough battle oppose capital gain tax increases proposed by the State Legislature.  Romney also expects to bring his consulting expertise to improving the business of government, and he has specifically mentioned Federal economic development programs as one area worthy of reform and streamlining.

Fred Thompson (www.fred08.com)
At this point in the campaign, former Senator Fred Thompson has not yet presented a detailed economic agenda.  However, he is portraying himself as a traditional conservative who will support tax cuts, tighter limits on Federal spending, and a limited role for government.  These commitments generally reflect his voting record in the Senate, where he regularly supported the Bush Administration’s tax cuts and efforts to cut Federal programs unpopular with the White House and Congressional Republicans.  As one might expect with a Senator from Tennessee, Thompson was a strong advocate for the Tennessee Valley Authority and supported multiple efforts to increase TVA funds.  It still remains uncertain how Thompson would specifically govern on issues related to the innovation economy.