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January 31, 2000     (512) 463-0300
Advisory Council on the Digital Economy Chair, Mike Maples
Advisory Council on the Digital Economy Chair, Mike Maples, discussing the goals of the new group in their first meeting, held Monday, January 31, 2000, in the Senate Chamber.

Advisory Council on the Digital Economy meets at the Texas State Capitol

AUSTIN - The Advisory Council on the Digital Economy held its first meeting, Monday, January 31, 2000, in the Senate Chamber. Lt. Governor Rick Perry appointed the committee of 25 members to help keep Texas at the edge of high-technology research, development, and job creation. The committee was issued three charges by Lt. Governor Perry.

The first of the three charges focuses on maintaining Texas' leadership in the digital economy, the council will consider strategies that (a) promote Texas' already-existing technology-friendly climate, (b) reduce governmental impediments to the greater economic opportunities for technology companies in Texas, and (c) encourage technology companies to locate in and remain in Texas. Specifically, the council will consider:

  1. How to create broad promotional efforts that highlight Texas' pro-technology business climate.
  2. How tax policy encourages or discourages the growth of Texas' high tech industry.
  3. How state government permitting, contracting and regulatory compliance processes affect the growth of Texas' high tech industry.

The second charge is to enhance Texas' position as a leader in the digital economy. The council will consider strategies to develop a more educated workforce. Specifically, the council will consider:

  1. Which improvements in K-12 mathematics and science education programs might help meet the workforce needs of the high tech industry.
  2. How to improve the technology training for primary and secondary school teachers and how technology can be more fully integrated into the curriculum of Texas' schools.
  3. Whether current high school technology programs meet the workforce needs of the high tech industry.
  4. How Texas' community colleges can be key to addressing the workforce demands of the high tech industry.
  5. How to encourage the movement of technology from university laboratories into Texas' high tech companies.

The third charge addresses how the growth of the Internet brings new opportunities, such as greater information distributed more broadly, and new risks. The council will develop strategies to promote the broad opportunities that the Internet brings and will consider what, if any, steps might be taken to minimize the adverse effects of the new risks. Specifically, the council will consider:

  1. How to bridge the digital divide and make the opportunities of the Internet available to more Texans.
  2. What consumer protection measures, including fraud protection, privacy protection and anti-spamming protection, can provide consumers with greater confidence in their use of the Internet as a tool for information and commerce.
  3. How to utilize the Internet as a means of addressing public health concerns regarding the delivery of medical information and services.
  4. How to utilize the Internet as a tool to allow for greater public participation in the democratic process.
  5. How to utilize the Internet as a means of enhancing rural economic development.
  6. What measures can be taken to give parents greater control over their children's use of the Internet.

Lt. Governor Perry appointed 21 members from the private sector including; Mike Maples of Austin, formerly the Vice President of Worldwide Products at Microsoft, serving as council chair; Andrew Busey of Austin, Chief Executive Officer (CEO) of living.com; Michael Capellas of Houston, CEO of Compaq Corporation; Ken DeAngelis of Austin, a partner of Austin Ventures; Thomas Engibous of Dallas, Chairman, CEO and president of Texas Instruments; Robert Fabbio of Austin, a partner in TL Ventures; Donald Hackett of Austin, President and CEO, drkoop.com, Inc.; Dr. Katherine Hammer of Austin, President and CEO of Evolutionary Technologies International; John Hime of Austin, a private investor formerly associated with Tivoli Systems and Sun Microsystems; Christina Jones of Austin, President of pcOrder.com; Terrell Jones of Fort Worth, President of Travelocity.com; Jim Lee of Houston, Executive Vice President of Tradescape.com, Inc.; John McCain of Dallas, Senior Vice President of E Solutions, a division of EDS; F.H. (Dick) Moeller of Austin, President and CEO of VTEL Corporation; Dennis E. Murphree of Houston President and CEO of Murphree and Co. and a managing general partner of Murphree Venture Partners; David G. Nance of Austin, President and CEO of Introgen Therapeutics. Inc.; Kevin Rollins of Austin, Vice-chairman of Dell Computer Corporation; Hector Ruiz of Austin, President of Motorola Semiconductor Products Sector; David Sikora of Austin, President and CEO of Ventix Systems, Inc.; James Truchard of Austin, President and CEO of National Instruments; and Max Watson of Houston, CEO of BMC Software.

Perry appointed four Senators to the council; Gonzalo Barrientos of Austin, Rodney Ellis of Houston, Steve Ogden of Bryan, and Florence Shapiro of Plano.

Lieutenant Governor Rick Perry welcomed the group and thanked them for participating, noting their most valuable possession was their time. Perry expressed his goals for the council; to help Texas explore and map its future in the new information technology economy, to foster a relationship between government and technology, and of creating a long-term strategy for making Texas a world wide leader in technology, research development, and job creation.

The first topic addressed at today's meeting was Internet taxation. Testimony was provided Dr. George Zodrow, Chairman, Department of Economics, Rice University; Dr. Charles E. McLure, Jr., Senior fellow, Hoover Institution, Stanford University; Mr. Stanley S. Sokul, Member, National Advisory Council on Electronic Commerce; and Mr. Frank Shafroth, Director of State-Federal Relations of the National Governors' Association. The majority of testimony provided by these individuals focused on the complexities of taxing the Internet.

Dr. McLure testified that statutory exemption of the Internet would not be good, preferring a temporary but non-statutory use tax exemption. McLure also wants to see a simplification of electronic commerce. Mr. Sokul supported McLure's testimony by telling the council that Internet taxation is easier said than done. The Internet, due to its borderless existence, would be difficult to tax because of its complex nature and size. Sokul went on to say that there should not be any tariffs placed on electronic commerce.

The council then focused on regional clustering. Ms. Meredith Walker, Economist, Federal Reserve Bank of Dallas; Mr. Ruben Barrales, President & CEO, Joint Venture: Silicon Valley Network; Mr. Ron Robinson, President, Telecom Corridor (Richardson, TX); and Mr. Steve Papermaster, CEO, Agillion and Chairman, Powershift Group all provided related testimony.

Walker discussed the clustering of technology companies in Texas, mainly Dallas and Austin. According to Walker, ". . . a cluster is not simply a geographic concentration of companies. Clusters include suppliers, customers, and providers of complementary products. State and local governments, colleges, standards agencies, and vocational training providers also participate. Clusters are not unique to one industry, and are present in both rural and urban areas." Walker discussed the current factors that make clusters successful in Texas. These factors include proper knowledge, specialized labor, and access to capital.

After Walker's testimony, Mr. Barrales discussed the future of technology clusters, the digital divide between those with internet access and those without, and the high-tech workforce. He used the Silicon Valley as an example of how clusters can turn counterproductive if not monitored and encouraged in the early stages of development. Barrales stated that the Silicon Valley cluster is declining due to a lack of technological knowledge and specialized skills on the part of recent high school and college graduates. The increasing costs of living in the Silicon Valley--which limits capital--has also been a hindrance to California's technological cluster.

The final topic of interest was electronic government. Ms. Carolyn Purcell, Executive Director, Texas Department of Information Resources, provided relevant information to the council regarding electronic government.

Purcell discussed the future of technology and government in Texas. She envisions electronic commerce being improved upon by the interaction between Texans and government, and business and government. In Purcell's opinion Texas has achieved a level of competence in dealing with electronic government, but she would like to see this competence expanded upon. In regards to electronic government, Purcell wants to make Texas one of the leading states in the nation. In order to achieve this, Purcell would like to see individual electronic accounts created for each Texan. With these accounts citizens could interact with state agencies, testify at public meetings, allow drivers' licenses to be renewed, create government message boards, allow constituents to reach their respective Texas State Senators and Representatives, and so on.

The council stands adjourned.

Click here to listen to the hearing in RealAudio format.

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