Last week I attended something called the State Internet Policy Conference. The Conference, hosted by Apple, Facebook, Google, and Yahoo, featured tours of Facebook’s and Google’s headquarters and panel discussions on a host of topics. It was an informative conference and I was glad I was able to attend.
I thought I’d pass on a few things I learned.
1) Overall, California is not very business friendly, but the talent pool tech companies draw from is enormous. California’s personal and corporate income taxes are among the highest in the nation. So why do these companies stay there? The Left Coast still has several things in it’s favor, most notably local talent. The sheer volume of programmers in the area is enormous. Also, California’s laws on non-compete agreements greatly favor employees and independent contractors. This encourages job hopping and even striking out on your own should you come up with a good idea.
2) Policymakers better get used to turmoil because disruptive technologies aren’t going to end any time soon. If you thought Uber and AirBnB were the end of the turmoil caused by new technologies, think again. Autonomous vehicles are coming – fast. Drones to deliver small packages to your home or business are not far behind. There are plenty of other cool gadets being developed in labs across the Valley. Some of these will turn someone’s world upside down. Legislators will be faced with clashes between current law and technologies seeking to uproot the established order for the foreseeable future.
3) Tech companies spend a lot of money regularly upgrading equipment. Old models of taxation don’t fit these companies well. Here in Georgia, we give tax breaks for certain types of manufacturing and farming equipment. Tech companies regularly spend millions on computer equipment but receive no tax breaks on these purchases. Additionally, manufacturers and certain agriculture entities do not pay state sales tax on the electricity they consume. Data centers are not exempt from the tax on power, which costs them a lot of money and make Georgia less attractive when a tech company is looking to expand. It might be time to revisit how we tax tech companies. A few changes could enhance our state’s attractiveness to the tech industry.
Georgia is seen as an attractive place for tech companies. Google Fiber is moving into metro Atlanta, most of the major tech players have a presence here and are looking to grow, there are a number of data centers here, and we have a thriving gaming industry. One Google manager said to me (not knowing I was a Georgia Tech alum), “whatever you can do to keep Georgia Tech a top engineering school, do it.” Midtown’s Technology Square is a hotbed of high-tech activity. We’ve got a lot going for us here in Georgia and as long as we’re willing to adjust our policies to meet changing technological times, our tech sector should continue to grow and provide good paying jobs for our citizens.