Can SXSW Make Policy Cool?

With the dust from the corporate Mardi Gras settling on the streets of Austin, it’s time for some sober self-assessment. After all, South By Southwest is supposed to be a party with a purpose. And this year there were promising signs from the must unlikely suspects: politicians.

From Republican Senators like Rand Paul and Jerry Moran to Commerce Secretary Penny Pritzker to congressmen and women like Hakeem Jeffries, Cathy McMorris Rogers and Mircosoft vet Suzan DelBene, Capitol Hill jockeys were shifting their focus and doing more listening than talking. They had a receptive audience because rising tech entrepreneurs are realizing that they can’t ignore government policy indefinitely without hobbling their own growth.

Evidence of their increased interdependence was everywhere at SXSW—attendees use services like Uber and Lyft to get around town and now stay at AIRBNB’s as often as local hotels. And these companies have run into resistance from local regulations and bureaucracies that are built to resist change.

The two customarily warring camps met over panels like “Friend or Foe? How Government Impacts Startups,” “Move Fast, Government, or Get Out of the Way” and a series of stage conversations that paired congressmen with local tech entrepreneurs, sponsored by Dell and the Austin Tech Council.

“South By Southwest is lucky to be at the intersection of a lot of these changes,” explained Hugh Forest, the director of SXSW Interactive. “Entrepreneurs are understanding that there have to be policy initiatives for them to keep innovating and disrupting. Are regulations impeding the marketplace or is it putting safeguards in place that need to be there for consumers? Let's debate.”

It’s a debate that President Obama’s Commerce Secretary Penny Pritzker welcomes. “Entrepreneurs are like, ‘oh you’re from the government, please go away,’” she said before her SXSW panel. “I spent 27 years in the private sector and so I get it.” But leading what she calls the “department of innovation” requires dialogue with disruptors.

“What we’re trying to do is help them understand disruption can be great but you have to understand what the implications are of disruption. Right? So for example, take AirBNB: you’re not paying hotel tax. Here’s the problem. Cities run on hotel tax. You’ve got to find another way to think about this or you’re going to put cities out of business, and that’s probably not what you’re trying to accomplish.”

The larger shift from bricks and mortar isn’t going away. Pritzker is hawking a new study that shows there are now 8.6 million digital data based jobs in the U.S.A—nd “those jobs pay about 68 percent higher than the average wage.”

Senator Jerry Moran sees an opportunity for the GOP to connect with the tech crowd in their mutual fight to cut the red tape of excessive regulations.

“South by Southwest allows me as a Republican to interact with people that I might not normally come in contact with, to pursue issues that I think are broadly supported across the political spectrum,” he says. Moran eagerly brings up the Start-Up legislation, backed by AOL founder and Revolution CEO Steve Case that he’s co-sponsored with Virginia Democrat Mark Warner. It offers Entrepreneur Visas and STEM visas for students to stay here, in addition to a erasure of capital gains taxes on investments held over 5 years to counteract high-volume trading speculation.

“These kind of policies can bring Republicans and Democrats together,” says Moran, while predicting that the persistently pursued Start-Up legislation would get out of committee this year and opened up for a full-senate vote. “While we're fiddling, the rest of the world is taking advantage of our inaction.”

This pervasive sense of government paralysis is one reason why many millennials would rather try to change the world through technology and culture rather than direct involvement in politics or public service. Washington’s endless war of attrition and childish sandbox politics makes reasonable people want to run for the hills rather than engage in policy debates.

But there comes a point where that hands off approach doesn’t comport with reality—it not only threatens to degrade representative democracy, it can hold back powerfully disruptive business ideas that could otherwise improve society.

“Policy can either really drive entrepreneurship in the US and around the globe, or it can really screw it up, “ says Cris Turner, the head of North American Government Affairs at Dell. “Once entrepreneurs reach a point in their development that they understand that, then it becomes really cool - and really important—for them to get involved in policy.”

Trying to make public policy cool in an age of cynicism about government is an uphill battle. But it’s an essential effort. Tech leaders have a lot to teach politicians about pursuit of practical solutions and measurable results. And politicians, for all their faults, can transmit a modest sense of mutual responsibility rooted in public service. Not a bad takeaway to wash down with a Shiner Bock.