Politics And Technology Make Strange Bedfellows.

Politics and technology make strange bedfellows. Democrat John Kerry earlier this summer announced his huge tech investment plan. If elected, Kerry would create tax incentives to invest in startups, research and development, and broadband networks for rural areas and cities. Kerry has said that, as president, he would ditch taxes on capital gains from investments in small businesses held for at least five years, which are now taxed at a 14% rate. His plans also include an extension of a 20% tax credit on annual increases in R&D spending by companies and eliminate tax advantages for companies that move jobs overseas.

It's that last point that gives me pause. While no one wants to see jobs go overseas, Kerry's proposal is too sweeping. A more sensible plan would be to move some types of jobs, while striving to keep others. The U.S. needs to be globally-minded. U.S. consumers will not agree to ever-increasing prices for servers, PCs, and printers because a company is unable to have components made offshore. President George Bush maintains that laws aren't the answer to this dilemma; rather, investment in training and education should lessen the likelihood of a "brain drain" that some technologists are dreading. That's tougher than it sounds, because we need to convince potential students that the jobs they are training for are not going to evaporate and be replaced by employees overseas.

Of course, companies could always follow IBM's recent example: Buy an offshore company and make it their own. (See, "Software Swims Offshore." )