I sometimes get asked what kinds of government policies are most effective to support technology use and maximize technology impact, and I almost always pass on them. Business research (what I do) is very different than policy research, so I don’t really feel qualified. I was flattered, for example, to be asked to help with the recently-released national broadband plan, but I declined. Contributing well to an effort like that required expertise that I don’t have.
I recently discovered, though, that there is one policy change I can enthusiastically recommend: countries that want to develop their workforces should stop taxing technology imports.
I’m in Brazil this week giving a couple talks, the first of which was organized by HSM and held in Rio on Monday (the second will be in Brasilia, organized by SEBRAE). When I arrived on Saturday, I realized that I’d made one of the classic geek traveler mistakes: I’d forgotten to pack my Mac’s power cord.
So I called up my estimable driver Osvaldo Franco, who took me to an Apple reseller that did in fact stock power cords. But they were expensive, as was all the other gear in the store. Osvaldo explained this was because of high tariffs on imported computer goods, and a bit of online searching indicates he’s right.
Steve Jobs has cited the country’s ‘super crazy‘ tax policies as a reason to not open an official Apple store in the country, and blogs attest to the thriving black market for IT smuggled in through Paraguay. The tariffs are intended to help facilitate the development of a domestic IT industry, but I don’t think China’s too worried.
Brazilians should be. Everyone I’ve talked to here stressed the need to develop workers’ skills and education levels. This is a large and populous country with a quickly growing economy, but skilled knowledge workers are in short supply.
Keeping computers expensive is one way to make this problem worse instead of better. Knowledge workers in today’s world need deep familiarity with computers; it’s just that simple. They should start using them as kids, have them at home and school, and come to consider them part of the fabric of life.
Mobile phones are amazing tools, and are now becoming universal in Brazil and many other developing countries. But phones aren’t computers. Students can’t learn to program, build simulations, conduct analyses, or write well with mobile phones alone.
They need computers for these tasks. The good news is that computers are getting cheaper all the time. Their raw materials, after all, are largely dirt cheap (sand, plastic, and rust) and the huge factories that make them now benefit greatly from scale economies. So world markets are being flooded with ever-cheaper digital gear.
The bad news is that tariffs and other taxes are impeding the flow of that gear into some countries that could really use it. Protectionism, in short, is impeding workforce development. I saw this first hand this week, and think it’s a counterproductive shame.
So my (totally unsolicitied) advice to Brazil’s policy makers is clear: drop the tariffs and let digital gear enter your country as cheaply and easily as possible. Your people will snap it up, and as a result will become better workers for the wired world. To steal Winston Churchill’s great line, give them the tools and they will finish the job.
What do you think? Am I missing something important here, or is the right answer — let digital gear in freely — really as simple as I think it is? Leave a comment, please, and let us know.