United States vs Google. Is this an eye-catching headline to the average American? To elite thinkers who help US government shape policy? Given the long term economic value created by the massive innovation engine that is Google, the prospect of this scenario should be cause for alarm. Right now, the populist sentiment and policies of the Obama administration combined with a number of regulatory and antitrust related stories on Google, seem to have created an environment that may unwittingly facilitate such a case.
After establishing themselves as the dominant search engine, Google created a highly lucrative online advertising market that allowed the proverbial “little guy” to target and buy just the right amount of advertising they could afford. On the back of this resounding success, Google has re-invested much of their profit in technology innovation. And the benefit is immeasurable – enabling consumers and small businesses access to technology that makes them more informed and productive in the hyper-competitive, knowledge-driven, global economy.
However, these efforts have not been without controversy. One of the fiercest regulatory battles in the tech world today is Net Neutrality, pitting Google against some of the most powerful lobbies in Washington. And most recently, the FCC is investigating Google Voice to review allegations that the service has been refusing to connect some calls to rural areas.
One would hope Obama’s strategic orientation would help steer his administration from taking on Google. But with the law of unintended consequences, it’s not a stretch to see an ambitious Justice Department staffer try to make their name with a high profile case. And don’t forget politicians trying to get re-elected. After all, the link between how Google enables small business to create jobs requires a sophistication of thought that lawmakers might struggle to synthesize, their brains clouded by campaign contributions from the big businesses most threatened by Google’s innovation.
China and cash rich oil-producing countries build sovereign wealth funds to fortify their long-term economic prospects. In contrast, the US has innovators like Google who create products and services that enable a sustainable competitive position in the global economy. The US “sovereign innovation fund”, made up of the free market principles and balanced regulation that support it, is a concept that differentiates this country. It is an advantage we should be extremely careful not to cede.