Microsoft Chairman Bill Gates is interviewed by Charlie Rose at the TechNet Innovation Summit to discuss innovation and the global knowledge economy before a packed audience of Stanford students, technology industry pace-setters and government officials.


Some of technology's biggest names shared the stage at Stanford University last Wednesday to discuss the future of American innovation.

Yahoo co-founder Jerry Yang and legendary Kleiner Perkins Caufield & Byers venture capitalist John Doerr were among the members of two panels moderated by talk show host Charlie Rose, who also led Microsoft co-founder and chairman Bill Gates through a question-and-answer session.

The third annual innovation summit, where industry leaders talked about emerging trends and government technology policy, was organized by TechNet, an advocacy group that lobbies on behalf of tech executives.

Much of the discussion centered on how American companies and workers will compete in an era of rapid innovation and globalization.

"The United States has been spoiled by being a global leader for so long that there may be an adjustment," Gates told the audience of nearly 2,000, a mix of suit-and-tie executives and college students in hooded sweatshirts. "We've got to get used to the fact that our relative share of everything -- our ability to exercise unilateral decision-making, military power, and economic power -- won't be as out of line with our 5 percent share of world population as it is today."

As developing countries like China and India become global powers, the American economy faces several risks, including a lack of interest in engineering among American students.

"We're all seeing the danger signs -- if industry doesn't solve the education issues, those affect our standing in the global marketplace," said Brian Halla, chairman and chief executive of National Semiconductor.

Halla compared the situation to the launch of the Soviet satellite Sputnik in the late 1950s, when the Eisenhower administration authorized $1 billion toward science research and education. "We need to start kids in fourth grade and say, `You're going to be one our future scientists,'" he said.

Those kids might also be the founders of tomorrow's tech giants.

"There's almost no chance one of us will invent the next big thing," said Reed Hastings, founder and chief executive of NetFlix. "It's always youth questioning assumptions. They have the courage and willingness to do so -- we have mortgages."

The executives also lamented government policies limiting student and work visas, warning that this shuts out people like Google co-founder Sergey Brin and former Intel chief executive Andrew Grove.

"We have this crazy policy in the U.S. that says, `Smart people can't come here.' I think we all agree it makes absolutely no sense," said Yang. "Are people going to want to build a company in the U.S. ... or in the new talent centers?"

This country's woeful technology infrastructure might further hamper innovation. Because of favorable telecommunications regulation and government investment, citizens of countries like Japan and South Korea are far more likely to have broadband Internet access in their homes than their American counterparts. This larger market for Internet services fosters the creation of new businesses.

"They are developing fast-growing, large companies that wouldn't have existed without that level of broadband penetration," said Charlie Giancarlo, senior vice president and chief development officer of Cisco Systems. "We're relying on policy developed 50 years ago for the telephone system."

Nevertheless, many of the leaders saw economic growth in developing countries as a gain for America, cutting prices for local consumers and creating more foreign buyers of American goods.

"China and India are not our threat. We should help them develop a strong middle class. That's going to be great for the whole world," Hastings said.

Gov. Arnold Schwarzenegger, a surprise guest, concluded the event with a speech celebrating California voters' approval last week of a $40 billion package of bonds aimed at shoring up infrastructure statewide.



------

(c) 2006, San Jose Mercury News. Distributed by McClatchy-Tribune Information Services via Newscom. KW