RESEARCH TRIANGLE PARK — North Carolina’s high-tech industry and life science sector took some hits in Tuesday’s election. But, nationally, those industries just may benefit from the Republican earthquake.
Republicans are in control in South Carolina and Georgia. In NC, Republicans surged enough to truly threaten the Democrats’ grip on state government.
The tech industry has to respond.
In NC, a big advocate (Erskine Bowles) isn’t going to Washington, and another (Eric Reeves) is still at risk losing his state Senate seat.
The high-tech industry has had two leading proponents in the General Assembly, Joe Tolson in the House and Reeves in the Senate.
But whether Reeves, a Democrat, will be back in the Senate representing much of Wake County is unknown. According to results from the Associated Press, Reeves has a narrow 424-vote margin over Republican and former Raleigh Mayor Paul Coble, 25,352 to 24,928, with all precincts reporting.
Sounds like a recount.
Tolson, a Democratic force Down East and a tireless supporter of technology, ended up in a dogfight in House District 23, beating Republican Bettie West, 9,656 to 8,230. Tolson has also been a huge supporter of the Global TransPark, which over the past couple of years.
To the chagrin of independent voters and Republicans who believe in technology, seeing a Republican at a tech event is about as rare kind words for George Bush from James Carville.
Richard Burr, who represents District 5 in and around Winston-Salem, has been a force on medical technology and biotech in Congress. And the Republican swept to an easy victory over David Crawford.
But at the General Assembly, tech issues have been in trouble. Losing Reeves could be a big blow.
The state’s e-commerce initiative has foundered. An effort underway to integrate all state agencies, universities and community colleges into one data/voice network is limping along, and as The Business Journal in Raleigh documented quite well recently the various state agencies are fighting IT reforms that Reeves has long advocated. To his credit, Reeves has not been reluctant to speak out on the entrenched bureaucracy’s tenacious turf fighting.
Where Coble would come down on tech issues is unclear. Reeves has a known track record and has many allies, especially within the North Carolina Electronics and Information Technology Association. But even with Reeves, the tech industry has suffered some defeats, such as reductions in funding for networking at the UNC System that have imperiled the future of the SuperComputing Center at MCNC.
Should Reeves lose, the IT industry is going to have to find a new champion.
The Republicans also made major gains in the NC Senate, cutting the Democrats’ huge margin by seven or more seats. Marc Basnight, the Senate leader who has shown a strong interest in technology and programs such as the $35 million biotech worker training initiative, could see his margin of control reduced to 28-22.
In the House, we could see a 50-50 split.
This is not to claim that Republicans are anti-technology. They too realize the importance of high-tech and life science firms to the state’s economy.
That said, one can bet that Republicans in both houses are going to go after the state’s budget crisis with renewed vigor. The tech industry, which has lobbied hard for incentives and tax credits to create jobs and accelerate equipment write-offs, certainly will have to reach out to Republicans. Some staunch conservatives also are adamantly opposed to expanded incentives to lure jobs to the state.
And what will the changes in the Senate and House have on Democrat Gov. Mike Easley? Although neither house necessarily jumped when he barked, he certainly doesn’t have as strong a hand as he did when Basnight’s grip on the Senate was ironclad and Jim Black of Charlotte ruled the House.
Bowles supported tech; will Dole?
In the Senate race, the IT sector also felt it had a friend in Democrat Bowles, who lost to Republican Elizabeth Dole. Bowles, in fact, delivered the keynote address at the IT kickoff event of the year — the Council for Entrepreneurial Development’s Venture Conference in January. He also pushed heavily for rural NC initiatives, including technology.
Dole still beat Bowles decisively, including wins in the big counties where the state’s technology industry is largely located.
Dole carried Wake County by 22,000 votes, Mecklenburg by some 2,500 votes, Guilford by about 1,000 votes, and Forsyth by 8,000 votes.
Bowles won Orange and Durham counties by big margins. But, in all honesty, Republicans in those counties are an endangered species.
Will Dole be the advocate for technology that Bowles has been?
The tech industry needs to be looking for a spot on her DayTimer — ASAP
The national picture better?
Where the tech industry might benefit most in all this is the Republicans seizing control of the Senate and strengthening their hold on the House. So say a lot of pundits, especially on CNBC, who are predicting big rallies.
Wall Street likely is to embrace the move because President Bush, who can rightly see the election returns as a mandate for his agenda, is likely to push for more tax cuts, a reduction in capital gains, and perhaps even bigger defense budgets.
Should the markets stage a big rally, should the Fed cut interest rates, and should some excitement return to Wall Street we could see more credit, more venture capital, and more exit openings — be they IPOs or more mergers and acquisitions,
Will all this happen?
One big cloud remains on the horizon.
The war on terror — including the invasion of Iraq.
If this doesn’t go well, all bets are off.
Rick Smith is managing editor of Local Tech Wire.