This Time, High Tech Adores George Bush

What might a George W. Bush presidency look like for the high-tech industry? A number of industry leaders must be pondering that question now after the Texas governor’s landslide victory last week.

Bush was already a front-runner for the Republican presidential nomination in 2000 before last week. His overwhelming reelection victory, with 69% of the vote, and with deep support among Latinos and African Americans, will almost certainly firm up his status in the Republican Party. And most high-tech leaders in Texas are already on his bandwagon.

Some people outside of Texas still don’t realize how thoroughly high tech has changed the state. Texas is still regarded by many people on both coasts as a place of tumblin’ tumbleweeds, good ol’ boys and an economy based on cattle, oil and gas. Nothing could be further from the truth.

Fortune magazine last week named Austin the No. 1 city for business in the country because of its high-tech sector. The city was on the cover of Newsweek, too, as a place challenging Silicon Valley for preeminence in technology. The current downturn in chip manufacturing, which four years ago would have been a body slam to Austin, now barely registers in the region’s economy. The energy in Austin’s high-tech industry has shifted to hundreds--up to 700 at last count--of small start-up software firms, most of them focused on cutting-edge Internet applications and e-commerce.

Dell Computer, of course, is one of the chief motors of the economy here, growing at many times the rate of its market as a whole. Michael Dell, at age 33, is richer than Bill Gates was at that age, and he’s now the richest man in Texas, with a personal wealth somewhere between $11 billion and $13 billion. Central Texas is dotted with other “Dellionaires.”

Houston has mighty Compaq Computer, the world’s largest PC manufacturer, which in the last year has gobbled up Digital Equipment Corp. (once the second-largest computer company itself) and Tandem Computers.

Dallas has its “telecom corridor” and is a leading producer of computer games, and San Antonio is home of SBC Corp., which owns Southwestern Bell, Pacific Bell, parts of the telephone market in New England and one-fourth of Telmex in Mexico. SBC has also made a bid for Ameritech that, if approved by the Federal Communications Commission, will make SBC the biggest phone company in the world, with more than 60% of the telephones west of the Mississippi.

There are also rumors circulating that WorldCom-MCI--the Godzilla of the telecom business--may relocate its headquarters to San Antonio soon, a move that would transform the technology-sleepy city into the world’s biggest hub of telecommunications.

The high-tech industry here, like the rest of Texas, has had a love affair with George W. Bush. He’s the most popular governor in the state’s history. Critics have tried to make the case that he hasn’t done anything significant--that was the attack line of his Democratic Party challenger, Garry Mauro--but Bush’s lack of an ambitious agenda seemed to be exactly what appealed to high-tech leaders. They gushed over Bush’s line that “government should do only a few things and do those well.”

In his first term and in this year’s campaign, he stressed basic skills in K-12 education and tax reform, which are the top priorities of the high-tech sector as well.

Bush has surprised a lot of people here, including me. When he ran against Ann Richards in 1994, the Democratic governor tried to paint him as an empty suit, politically inexperienced, weightless and trading on his famous name. None of this worked, and it turned out to be wildly inaccurate too.

Bush is one of the canniest politicians in the country, astonishingly skilled, extremely smart and with a big dose of charisma. He lights up a room wherever he goes. He also speaks passable Spanish, a great asset in the Southwest.

He has hired and deployed a senior staff that is remarkably intelligent, diligent, experienced and completely incorruptible, all qualities that surprised Bush’s opponents. It has chagrined many Democrats here that holdovers from the Richards administration who now work for Bush report that their jobs are a lot more rewarding and fun under this governor.

Bush has tended to stay away from technology issues, which may be why tech leaders like him so much. He did sign into law, in 1995, a massive reform of telecommunications that included the state’s Telecommunications Infrastructure Fund, the nation’s largest investment program in wiring schools, libraries and medical facilities--$1.5 billion over 10 years. He convened a Science and Technology Task Force, which has tended to limit its advice to how to improve the state’s high-tech work force, the industry’s biggest concern.

But other than these two “background” initiatives, which have more or less run on their own steam, Bush hasn’t staked out the digital revolution as his terrain the way his likely opponent, Vice President Al Gore, has. Bush’s stress on elementary school reading is hitting the right chords with high-tech leaders who want the government to leave their businesses alone.

Ironically, it was, in part, the defection of high tech from Republican ranks in 1992 that led to the defeat of Governor Bush’s father, President George Bush. In that year, John Young, then CEO of Hewlett-Packard, and John Sculley, then head of Apple Computer, called a news conference and, joining with more than 150 other Silicon Valley technology leaders, announced their support for the Clinton-Gore ticket. This cemented Clinton’s influence with the business community and sent the message that the Democrats “got it” about high tech and the economy.

Now, however, both Young and Sculley are gone from the scene, along with many of the other technology leaders of that time. The current crop of moguls is 10 to 20 years younger than that 1992 group, and they’ve been more influenced by the widespread libertarian ethos of the technology business. They, like high-tech managers here, are likely to line up behind Bush in 2000.

The biggest threat to a Bush presidential bid is the potential for a split in the Republican Party. Christian-right activists clearly would prefer a far more conservative candidate, and if Bush gets the nomination, they may bolt. That prospect may even amplify high tech’s attraction to Bush because the religious right scares them too.

For the last six years, we’ve lived with a somewhat tense accommodation between high tech and the Democrats, something that symbolized President Clinton’s “Third Way,” his effort to pull his party away from its historical attachment to big government and trade unions. Now George W. Bush is using the same tactics to develop a Republican “Third Way,” pulling his party toward a moderately conservative populist position. The era of Clinton high-tech Democrats may be ending, to be followed by an emerging era of Bush high-tech Republicans.

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Gary Chapman is director of the 21st Century Project at the University of Texas at Austin. His e-mail address is [email protected].