The following excerpts are from a March 4 speech by Carly Fiorina, chairwoman of the American Conservative Union Foundation and former CEO of Hewlett-Packard, at the Inventing America Conference.
My story, a young woman sort of with no plans, not a great resume, getting the opportunity to go from secretary to CEO of the largest technology company in the world. That story is only possible here. And I’ve traveled and lived all over the world, done business all over the world, and it is still true that my story is possible here and only here. And it is because truly of the genius of our Founding Fathers who were willing to protect certain truths, who were willing to protect what they call certain inalienable rights. Our founders knew that everyone has God-given gifts, that everyone has potential, and they wanted to put in place a system that permitted people to fulfill their potential.
So what does that have to do with patent reform? When our founders wrote the Constitution, they coupled this idea of everyone having God-given gifts, everyone having potential, everyone having the right to fulfill their potential and that right coming from God not being taken away by man or government. They added to that the idea that you own the product of your labors. That you own the output of your gifts. And they said, if you work hard and imagine something in your mind and build something with your hands, you own it. It was, once again, a fairly radical visionary idea, and it is why our founders had the foresight to talk about intellectual property and patent protection all those many hundreds of years ago.
So, as we are talking about patent reform, let us not forget how impactful that incredibly important insight has been in our nation’s history. Our nation has thrived because this is the country where virtually everything worth inventing has been invented. Think about the inventions that have occurred here. Think about the revolutionary inventions that were invented here, by people here. And the reason it happened here is because people understood that they would get to benefit. That the world would benefit from their inventions but that they would also get to benefit from the investment of their time and their talent and their treasure in creating something.
We have a lot of great big companies in this country, and we are very proud of them. I was the chief executive officer of Hewlett-Packard for six years, and in that time we took it from $45 billion to $90 billion. But Hewlett-Packard started as an idea of two guys in a garage. Google started with two guys in a dorm room, and the list goes on and on. And, in fact, it has been the small companies, the individual inventors and entrepreneurs who have had the biggest impact on our economy. It is true that small and new businesses create two-thirds of the new jobs in this country. And small and new businesses innovate at seven times the rate of big businesses.
One of the drugs that saved my life, and has saved the lives of millions and millions of women, was invented by a single entrepreneur. So as important as big companies are and big capital is to our economy, to job creation, to invention … the small inventor, the individual entrepreneur is even more important, and we need to think about that as we discuss patent reform.
So now let’s come to another reality of our current economy. Crony capitalism is alive and well. What is crony capitalism? Crony capitalism is when big government and big business work together to make it harder for everyone else. You will hear many liberals say things like “Only big government can check big business.” But that’s exactly wrong because big government and big business enable and protect each other. Why do I say that? Because if you’re Hewlett-Packard and you are trying to deal with the complexity of regulation and legislation and the tax code, you might not like it but you can handle it. You can hire the accountants and the lawyers and the lobbyists to try and influence that to your advantage.
But let’s back up and talk about a couple of other pieces of legislation that have followed a similar pattern to what frankly I believe is going on with the Innovation Act. Let us start with Dodd-Frank. Dodd-Frank came about because people identified a problem and the problem was consumers have been harmed in the financial crisis. And so a big, huge, complicated piece of legislation was created with the cooperation of all the big banks who were trying to figure out how to protect their competitive position. What was the result of Dodd-Frank? A huge complicated bill accompanied by tens of thousands of pages of regulation. We have 10 banks too big to fail who have become five banks too big to fail, and no matter how much those five banks complain, the truth is their competitive position is stronger today than it was five years ago.
What happened with the Affordable Care Act? A problem was identified and the ocean was boiled. And the ocean was boiled because everyone who was going to get impacted by that legislation all came to town to help write that legislation to solve what was told to us at the time was a very targeted problem. People with pre-existing conditions aren’t getting covered, real problem. People can’t afford health insurance. Real problem. Let’s boil the ocean. What’s the result of that? The result is a piece of legislation that is longer than a Harry Potter novel. Of course, no one’s read it. It’s also accompanied by tens of thousands of pages of regulation. It’s too complicated for anyone to understand it. But if you have the resources to hire lots of lobbyists and lots of accountants and lots of lawyers, you’re going to figure out how you can use that brand new complicated set of rules to your advantage. And if you can’t do those things, you are in trouble. And so what do we see? We see hospitals consolidating. We see doctors’ practices consolidating. We see health insurance companies consolidating, and meanwhile, we haven’t solved the original problem and we’ve created a whole bunch of new problems. I guarantee you this: Every time that happens, the big get bigger and the small become more powerless because only the big can handle it.
And that is what we have sadly now, with the Innovation Act. We have a set of people who believe that there is a real problem. There are some real problems. There are people who are committing fraud with patents. We have solutions for that. We have the court system. There was targeted legislation, called the Troll Act, in the House that would have taken a look at that very specific problem. But people were not content with that. People decided it was time boil the ocean. And, frankly, what happens frequently people hope you don’t read the fine print. Watch carefully who is supporting that legislation. It’s not the small; it’s the big. It’s the big companies whose ongoing economic benefit depends upon their ability to acquire innovations and patents at a lower cost. If the Innovation Act were law tomorrow, Thomas Edison would be a patent troll. Some of our greatest inventors would be patent trolls under this law. Our universities would be patent trolls. We are fixing problems that don’t exist. We are boiling the ocean.
I would ask people to think carefully through the realities of who can handle big, complicated pieces of legislation and regulation. Who is benefited by complexity and complication? It is not, in the end, the individual inventor or entrepreneur, it is not the new startup, it is not the small business struggling to find its way, and it is not the engine of growth and innovation in this country.
I think we have the greatest economic and innovation engine in this nation in history. And if you doubt that, pause and think about this. The iPhone, Google, Facebook. The iPhone was first introduced to the marketplace in 2007. And in less than a decade, our entire world has changed. In less than a decade we are now sitting at a point in human history unlike any other, because for the first time in human history any person, anywhere, can gain access to any piece of information they choose and communicate with anyone else they choose at the time and place of their choosing. It is revolutionary, and that reality will spawn many, many, many more inventions. It will create many more entrepreneurs, it will give so many more people the opportunity to find their God-given gifts and to build lives of dignity and purpose and meaning, but we can stop it. We can crush it. The thing that always crushes that incredible power of individualism and invention and entrepreneurship is big, complicated, bloated bureaucracy. Our founders had it right when they said that patents and intellectual property needed to be protected as a fundamental right of a citizen in this country. Let us be humble and cautious before we decide to boil the ocean and solve problems that maybe don’t need legislators to resolve them.
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