Search Done Right

I was honored to attend last week’s Jobs and Economic Growth Forum (or Jobs Summit) at the White House, convened by President Obama to explore near-term interventions to decrease the 10% unemployment rate in the U.S., with comparable rates seen in the European Union.

Secretary of Labor Hilda Solis, Vice President Biden, and President Obama gave opening remarks to the 130 invited attendees and Administration staff, followed by breakout sessions in six groups, and then reconvened everyone into a final wrap up session.  Notably, President Obama personally attended two of the breakout sessions:  Green Jobs, and Infrastructure.

Having received the invitation the week before, I prepared for my role in representing the smaller-business/technology sector by reflecting on our own founding and growth decisions, those of other enterprise search companies, and reading a variety of ideas about how to stimulate job growth from the viewpoint of technology and small business.  The federal government defines small business in complex ways, e.g., a small mining company is typically much larger than a small software company.  One of Vivisimo’s original supporters back in 2000, the National Science Foundation’s Small Business Innovation Research (SBIR) program, defines small business as having no more than 500 employees.

I took part in the breakout session on Encouraging Business Investment, Competitiveness and Job Creation, moderated by Secretary of Commerce Gary Locke and Christina Romer, Chair of the Council of Economic Advisers.  Secretary Locke opened the session by asking Princeton’s Alan Blinder to contribute his ideas.  Prof. Blinder advocated dual strategies: a New Deal-style jobs initiative and a job-creation tax credit for lower-payscale jobs.  Another participant followed up by also recommending job-creation tax credits, but only for jobs that pay a “living wage” of about $65k per year.  Many other ideas were brought up during the roughly 1 ½ hour session.

In my preparations, I had found an across-the-board job-creation tax rebate (see here or here) to be intriguing and resonant with our own company’s experience.  According to these proposals, a company would get a 15% tax rebate on its increase in the wage bill between 2009 and 2010, 10% the next year, and nothing after that.  Doing the arithmetic, a company that planned to hire 12 new employees over the next year could instead hire 14 at the same cost in wages.  I believe that most firms that have confidence in their products or services, or that see an investment opportunity, would jump at the chance.  There are millions of small businesses in the country, so the potential increase in employment at all wage scales is large.  A U.S. Small Business Administration FAQ reports that “Firms with fewer than 500 employees accounted for 64 percent (or 14.5 million) of the 22.5 million net new jobs (gains minus losses) between 1993 and the third quarter of 2008.”

After the breakout sessions, President Obama was briefed on the various ideas, which he went through during the final session.  He then opened the floor for those with “burning questions” or remarks, of which there was no shortage.  He closed the event and approached the audience to greet and shake hands.

How does enterprise software and search fit into this picture?  I spotted three software CEOs at the Summit:  Greg Bentley (Bentley Systems), Eric Schmidt (Google), and Jim Whitehurst (Red Hat).  It’s notable that most of the leading enterprise and web search companies, including Autonomy, Google, Inktomi, Yahoo, and Vivisimo, started as tiny university spinoffs and grew their early employment base by venture capital or government financing, in all cases with subsequent returns many times over for the original investors, or growth in the tax base and employment, plus innovative technology that increases productivity.  Entrepreneurship was not the focus of the Jobs Summit, but deserves attention all its own.

Of course, enterprise search technology does not directly create jobs, since it universally enables people to make do with less, which savings can then be re-invested in other areas.  Similarly, the number of secretarial jobs is today much fewer, on the heels of computers, word processing, printers, voice mail, mobile communication devices, web, travel booking sites, etc.  But today’s administrative assistants perform higher-skilled work, and the fewer secretarial jobs have yielded to other office work in software, IT, sales, operations, etc.

Finally, I can attest that despite arriving at 12:15pm and staying past 5pm, and contrary to blogger titles such as They Came, They Dined, and They Did Nothing, the attendees were offered only pop, water, some miniature Snickers, and M&Ms, none of it at taxpayer expense according to Secretary Locke.

This entry was posted on Wednesday, December 9th, 2009 at 11:41 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.