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Home / Washington Business - January/February 2005 / Q&A with Brad Smith, Vice President, Microsoft: Microsoft VP Talks about Business and Government |
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Q&A with Brad Smith, Vice President, Microsoft: Microsoft VP Talks about Business and Government |
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Written On: January/February 2005 |
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Brad Smith travels the world on behalf of Microsoft. As such, he has observed what works and what doesn’t work in both government and business. He brought those insights to the speaker’s podium at the AWB Policy Summit at Semiahmoo last September.
His remarks came at a time when many in Washington are working to streamline and enhance the state’s relationship with the business community.
Smith has been with Microsoft for more than 15 years. He is Microsoft’s general counsel and corporate secretary. He leads the department of law and corporate affairs, which is responsible for all of Microsoft’s legal work and its government, industry and community affairs activities.
AWB has extracted key elements from Smith’s address and assembled these in a format to fit this section of Washington Business Magazine.
Q: Where is Microsoft today, and, more important, where is it going?
A: Twenty-five years ago Bill Gates and Paul Allen moved their fledgling company from New Mexico to Puget Sound, in the process creating the whopping total of 30 new jobs for the Washington state economy. It clearly was a small group of people, but they had a big vision. The goal was to put a computer on every desk and in every home.
Here we are 25 years later and Microsoft has 28,000 employees in Washington state. Indeed, 28,000 of our 57,000 total employees are in this state and we’ll hire 3,000 new employees in Washington this year alone.
But I think more important than where we are today as a company is where we’re going as a company and as a state. We absolutely remain committed to one straightforward goal, and that is ensuring that the world’s center for developing the best and most popular software in the world will remain Washington state.
Q: Can you give some examples of the successes you’ve seen in other countries or other states?
A: We’ve seen the successes over the last decade in places like Singapore and Korea and many European countries, but in my own mind there is one place that stands out as something of a role model and, I think, even an inspiration for those of us in this room, and that’s Ireland.
To put Ireland in perspective, one needs a little bit of context. In 1841, the census in Ireland showed that there were over 8 million people who lived on the island. In 1961, 120 years later, Ireland’s population had fallen to below 3 million. So, at a time when the population of the world grew fourfold, Ireland’s population shrunk by two-thirds. Literally for over a century Ireland’s greatest and most valuable export was almost certainly its own people, and when Ireland joined the European Community in 1973 it did so with a standard of living that was only half of the EC average.
And yet Ireland ended last year with a per capita GDP that was 125 percent of the EC average. They finished a decade in which they reduced unemployment from 21 percent to 3.8 percent, and they did this at a time when they attracted over a million of their expatriate-patriot citizens to come back and live in and invest in Ireland as well.
Q: How did Ireland put this remarkable achievement together?
A: In the early 1990s, Irish government leaders and business leaders got together and forged a clear and compelling vision for their country, that they would become a leader — the leader in Europe — for an economy based on information technology and computing. And the government and business community in Ireland recognized that the cornerstone of that success would have to be a much better-educated workforce. Through strong support for education, Ireland was able to ensure that by last year 81 percent of its high school students were going on to college level courses, up from 47 percent in the 1970s.
Ireland [also] reformed its tax system to not only persuade local businesses to create more jobs in Ireland but to attract foreign businesses as well. It is truly an impressive accomplishment that was based on the clear vision and the kinds of decisions that were needed to support it.
Q: How do the lessons from Ireland apply to the United States; more specifically to Washington?
A: We firmly believe that we have an opportunity in Washington to pursue a vision of economic success that is based on creating a world-leading innovation economy, and it reflects the opportunity that our companies today have to pursue advances in technology ranging from computers to communications to medical devices to biotechnology and inventions that none of us have even yet imagined.
And we have a number of strengths on which we can build. We have two of the world’s leading research universities in our state. We have a large number of very successful private companies and, indeed, much of our success in the 1990s was based on job creation and technology.
But we also need to be hardheaded and to recognize that we do not have a world-leading economy in Washington today. That is because there are simply too many areas where we lag behind both other states in this country and other countries around the world.
Q: What should businesses and government in Washington focus on to make our state, in your words, “a world-leading innovation economy?”
A: There are probably four areas that stand out. The first is the need to continue to strengthen and streamline decision-making in our government. I think that the initiative around Priorities in Government was obviously a key step forward.
But there is more to be done. There is a need for regulatory reform, there is a need to streamline the rules, to quicken decision-making, and to bring cost-benefit analysis into the regulatory decisions that our state government makes.
Second, we need to invest in and improve our state’s infrastructure, in part in areas like energy, certainly in areas like transportation. These have an impact on business and the cost of doing business.
Third, we really need to continue to improve our K-12 education system. We have made improvements in recent years but there is a lot more that needs to be done. Today only 68 percent of our students graduate from high school. That puts us 32nd in the country in terms of our ranking as a state.
And finally, we at Microsoft are strongly committed to strengthening higher education in our state. In fact, I think it’s fair to say that higher education is an issue in which we feel particularly passionate, in part because we see the connection between higher education and commercial success in so many other states and countries.
We also need to set our sights higher. We need to increase the capacity of our public universities so they can educate more of our students. Today, Washington ranks 41st in the country in the per capita number of students pursuing bachelor’s degrees in public universities and the state ranks 43rd in the country in the per capita number of students pursuing graduate and professional degrees at public universities.
The state’s population has grown but the public universities have not grown with it.
Today, we in Washington state have the opportunity to build on the business successes of the last couple of decades and really create a world-leading innovation economy. We are not there today. But if our government and business community can come together around that vision and make the key decisions that need to be made, we have the opportunity to turn that vision into a reality.
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