It’s time to start talking seriously about government and tech
Friday, August 19, 2016
Posted by: Fred Hoch, ITA CEO
I’ve recently been asked a great deal about government and the tech industry. That’s new and surprising. Over the last decade or so, the Chicago tech industry has come into its own without a lot of supervision or support from the local government. That’s not necessarily a bad thing: A relative lack of oversight and regulation compared to other industries has allowed our tech community to develop into a distinctive ecosystem that plays to this city’s strengths. But now, as Chicago tech matures, government is taking notice, and given the inquiries and government action, we have to start talking seriously about the impact of city and state governments on our industry.
This can be a tricky line to walk, because government and industry tend to be strange bedfellows, regardless of what industry we’re talking about. That’s especially true in Chicago. The local government has always had a heavy hand in the Chicago business community—for years it seemed nothing could be done if it wasn’t sanctioned by the mayor’s office. That’s less the case now, but there’s still a strong correlation between government sanction and government support. Such support is necessary for industry to thrive, but it also often comes with increased scrutiny and regulation, which can be antithetical to innovation. In order to enjoy continued support and promotion from the local government, industry may have to make certain concessions. This uncomfortable quid-pro-quo has the potential to benefit or harm both sides of the equation, so when talking about the role of government in tech, we should promote a long-range view that takes into account what both sides stand to gain.
With Mayor Emanuel’s Tech Plan, Chicago made a strategic bet to be the most digitally advanced city in the world. This initiative recognizes the potential of technology to transform Chicago, but displays less understanding of how technology is forcing change in other industries. Technology is not a discrete entity that can be grafted onto existing infrastructure—it is the infrastructure, a fluid foundation that requires adaptability and innovation from everything that’s build atop it. In order to truly establish Chicago as a technologically advanced city, the local government and industry leaders need to take an active role to find viable, long-term solutions for the city and state that don’t also hamper the growth of the local tech industry.
When talking about the role of government in tech, there are three matters to take into account: What the government should do, what it could do, and what it should not do. Let’s break down these three points, and how industry leaders can contribute to their realization:
- The government should work to promote Chicago tech, and be an active voice in showcasing the success of the industry beyond the local level. The city has done an admirable job promoting tech locally, bringing organizations from the suburbs into the city, but there hasn’t been enough done to expose Chicago tech on a national level. Sending organizations to SXSW every year isn’t enough; we need the people in power to understand and promote the Chicago tech industry as a distinctive whole. As an industry, we need to give public officials the facts and tools to promote us nationally and globally. We as industry also have a responsibility, one we have yet to fulfill.
- The government could incentivize the tech industry, through tax incentives, development credits, funding, etc. There have been small advancements in this area—such as the funding of 1871—but the city and state’s financial situation unfortunately means this sort of incentivizing will remain limited for the time being. Until the city and state get our house in order, so to speak, it’s not prudent to demand or expect this type of government support. This will hopefully change soon, but in the meantime, industry leaders should calibrate their expectations in accordance with the city and state’s financial realities.
- Most importantly, the government absolutely should not get in the way of the tech industry and technological innovation. This has become the biggest challenge to our community, as city and state officials seek to solve their financial problems through increased sales taxes, cloud taxes, and regulations targeted at industry disrupters like AirBnB and Uber. These measures are intended to help plug budget holes, but they’re short-term solutions that fail to understand the implications of the long term, and actively hurt the perception of Chicago as a tech-friendly city. The on-demand economy is disrupting old-money industries that have provided valuable revenue streams to the city and state, and the government is opting to burden those disrupters rather than considering their long-term impact and solving to that. A better solution would be to think about how the dynamics of industry are changing, and find a solution that’s viable for all parties involved. As industry leaders, we must recognize that the city has a job to do, and the industry has a responsibility to help the city function. But there needs to be a give-and-take.
Traditionally, the local tech industry has not been an active participant in city and state politics, which has contributed to this uneasy marriage between government and tech. Industry execs are frustrated, not without reason, but we can’t remain disengaged and expect things to magically get better. Whether we like it or not, it’s time to play a more active role in helping to find viable solutions for the city and state that don’t hamper the growth of our industry. This means thinking beyond one’s individual company and considering the industry as a whole. As I’ve said before, we’re all in this together, and in order to foster a mutually beneficial relationship between government and tech, individuals need to look beyond their own bottom line and toward the success of the community as a whole. There are viable solutions to be found, if we pursue them together.