Sen. Clinton's 'Innovation Agenda' Gets Warm Welcome In Silicon Valley

Democratic presidential hopeful Hillary Clinton, a longtime friend to California's high-tech industry, introduced her "innovation agenda" to Silicon Valley's elite, who warmly embraced the New York senator's call for big increases in federal spending in alternative energy, biotechnology, and other areas of scientific research.

Clinton on Thursday unveiled a nine-point plan before a packed room of more than 200 upper executives of some of California's biggest high-tech companies. Clinton chose to unveil her proposals at the fourth annual CEO Business Climate Summit of the Silicon Valley Leadership Group, whose members include Hewlett-Packard, Intel, Google, Microsoft, and many other tech giants.

The former first lady's 45-minute speech was punctuated by applause from the friendly crowd that listened to her plan for a $50-billion Strategic Energy Fund to finance research into alternative energy to wean the U.S. from foreign oil, while also lowering carbon dioxide emissions that contribute to global warming. "Ending energy dependence is the greatest innovation challenge that Americans have faced in generations," Clinton said.

Clinton drew her first applause by calling on Congress to close tax subsidies and loopholes currently enjoyed by oil companies. "I do think there's a role for subsidies, but for mature companies in mature markets, that has to be closely considered," she said.

Under Clinton's plan, oil companies that refused to invest in developing alternatives to fossil fuels would be required to contribute a portion of their earnings to the energy fund, which would provide tax incentives to homeowners and businesses that make their houses and offices more energy efficient, and offer tax credits to gas station owners who installed ethanol pumps. In addition, the fund would offer loan guarantees for the commercialization of bio-fuels made from plants, and provide incentives for the development of technology that contributes to a cleaner environment.

Clinton's agenda also included increasing by 50% over 10 years the basic research budgets of the National Science Foundation, the Department of Energy's Office of Science, and the Defense Department. Today, the federal government spends $28 billion a year on basic research. As the third point in her plan, Clinton proposed increasing the budget for the National Institute of Health by 50% over five years, with the aim to double it over 10 years.

Under the Bush administration, NIH funding has been flat since 2003, and the president has proposed reducing it by 1.1% in 2008, Clinton said. Such cuts could significantly affect the quantity and quality of university research, and impede biomedical advances. "The rug is being pulled out from some of our greatest minds," she said.

Clinton's proposals also included tripling the number of National Science Foundation fellowships, a key financial resource for science and engineering graduate students. Under Clinton's plan the number of awards would increase to 3,000 per year, with the size of each award jumping 33% to $40,000. These increases, along with a boost in the amount of money giving to each recipient's school, would increase the annual cost of the program to $500 million from $122 million, according to Clinton. Other elements of Clinton's agenda included directing federal agencies to award prizes to people and groups that accomplish specific innovation goals, support initiatives to bring more women and minorities into math, science, and engineering; and offer tax incentives to encourage broadband deployment in underserved areas, and provide financial support for state and local broadband initiatives.

Broadband rankings released last month by the Organization for Economic Cooperation and Development showed that the United States had dropped to 15th place from 12th place among industrialized nations in the percentage of people with broadband connections. In addition, the country ranked 20th in the 30-member OECD roster in terms of growth rate for broadband penetration in the last year.

Clinton's proposals also included making permanent the federal tax credit given to companies investing in research and development. Since its introduction in 1981, the credit has been extended 12 times.

Finally, Clinton called for an end of "irresponsible politicization" of the Office of Science and Technology Policy, which Democrats claim the Bush administration has used to bolster its conservative agenda. "The integrity of science has been under assault for six years," Clinton said. "Ideologues have called the shots."

Clinton argued that spending more to support innovation in science, engineering, biotechnology, energy efficiency, and other areas would ultimately generate more jobs and stimulate economic growth. "In its [innovation's] absence, we can't expect to continue the same quality of life," Clinton said, adding that government support was crucial. "We need leadership that sets our sights on the stars, and gives us the tools to get there."

Following Clinton's speech, Dennis Cima, VP of public policy for the Silicon Valley Leadership Group, said the senator addressed many of the concerns of tech leaders in the region. "There was a lot of common ground between the people here and her innovation agenda," he said.

Joe Pon, VP of communications for event co-sponsor Applied Materials, a manufacturer of technology for building semiconductors, agreed. "The issues that she talked about are well in tune with what Silicon Valley is looking for," he said.

Pon, however, cautioned that the real test would be in the execution of her agenda, if Clinton were elected. "It's important for Silicon Valley to hold her accountable, if she gets into the White House."

During a short question and answer period following her speech, Clinton said seeking an increase in the cap on H-1B visas would have to wait until Congress finishes its work on a comprehensive immigration reform bill. H-1B visas are issued to foreigners with special technical skills needed in the United States. The high-tech industry and Clinton support increasing the cap for skilled technology workers.

On improving education in math and science, Clinton said business and government needed to think "outside the box." The U.S. educational system today uses an agricultural model for the school year, and still uses methods developed during the industrial age. "We're just not thinking how to unleash the creativity and ingenuity of kids," she said.

On healthcare, Clinton said the need for reform has grown since her involvement in trying to formulate comprehensive health coverage while her husband Bill Clinton was president. "The problems that we tried to address 14 years ago is getting worse," she said.

As a result, she believed the nation is ready to take on special interests, insurance and drug companies in particular, to develop some form of universal healthcare. "I have no illusions about how hard this will be, but I think we finally have critical mass," Clinton said.