A threat to Internet innovation and job growth

With an unemployment rate of 13 percent, Nevada is the toughest state in the nation for the jobless. With an economy based largely on tourism, Nevada often feels the effects of a down economy more severely than other states, and businesses in Nevada aren't expecting much improvement soon. A recent University of Nevada, Las Vegas study found that just one-third of businesses expect to see improvement in the first quarter of 2012.

However, spirits across the state should be lifted this week when more than 2,700 companies and well over 140,000 visitors descend on Las Vegas for the annual International CES, the world's largest consumer technology trade show. CES is the global stage for innovation and a proving ground for entrepreneurship. It highlights the best of American and foreign ingenuity, and it illustrates the kind of creativity and enterprise that will restore the American economy.

The companies that showcase at CES are at the forefront of developing the technologies that consumers around the globe are demanding. Whether it's the fastest chips, the coolest smartphones or the lightest tablet computer, innovators are driving industries and the economy. Nobel Prize-winning economist Robert Solow showed in 1957 that 80 percent of growth in economic output is attributable to "technical progress." Today, we call this intangible growth effect "innovation," and nowhere is it more celebrated or better displayed than in Las Vegas at CES.

It's appropriate, then, that CES is held in Las Vegas, some 2,400 miles away from the nation's capital, where innovation is underappreciated, misunderstood and often stifled. Las Vegas is also the home to shows for National Association of Broadcasters and CTIA-The Wireless Association, and other trade shows and corporate events centered on technology.  Indeed, it is fair to say that in many ways more innovative technology companies come to Las Vegas than anywhere else on earth.

That's why it is entirely welcome and appropriate that Gov. Brian Sandoval will formally welcome CEOs, media and international visitors at the CES today. Tonight he will also address a contingent of government officials from Washington who are here to see the technology and gain a better understanding of the intersection between technology and policy. Indeed, all Nevada politicians with one exception have attended and helped us host the annual global pilgrimage to Las Vegas. 

Las Vegas' role as a leader in innovation is somewhat ironic, given that Nevada Sen. Harry Reid, who has never once visited the CES, is a leader in efforts that oppose the type of innovation and technology fueling CES and other events. Unlike the rest of the pro-CES, pro-innovation Nevada delegation, Sen. Reid stands alone. The current innovation-throttling legislative fad is focused on "Internet piracy." Majority Leader Reid said he would bring the Protect IP Act (PIPA) to the Senate floor this month despite it being opposed by virtually every innovation and technology company and almost everyone who understands and uses the Internet.

It highlights how out of touch Washington has become with modern communication and use of the Internet. The goal of protecting intellectual property from digital theft is the right one, but the overreaching measure Sen. Reid is pushing swiftly through Congress will chill Internet innovation, economic progress and job growth. It's a product of copyright extremists pouring money -- more than $91 million in 2011, more than they've ever spent before -- into influencing the legislative process. 

There is an alternative. Sen. Ron Wyden, D-Ore., and Rep. Darrell Issa, R-Calif., have proposed an alternative to PIPA called the Online Protection & Enforcement of Digital Trade Act (OPEN), which would protect innovators' rights while keeping the Internet free and open.

We can be assured that there are some bright spots among our leadership, yet the overwhelming tone out of Washington remains hostile to innovation, entrepreneurship and business. With proposals such as PIPA, new mandates and rules, it is no wonder we continue to lose jobs to more business-friendly countries. Las Vegas, like America itself, is fighting for growth. With government leadership taking aim at business and innovation, our children will not enjoy the life we inherited.

Government has a responsibility not to screw up the one bright light in our economy. Innovators must be free to continue doing what they do best without government interfering to choose winners and losers or handicap markets. Only when government embraces the kind of innovation agenda embodied in the companies on display at International CES will we be able to restore America to its rightful place as the global leader in technology.

Gary Shapiro is president and CEO of the Consumer Electronics Association, the U.S. trade association representing more than 2,000 consumer electronics companies, and author of The New York Times best-selling book, "The Comeback: How Innovation Will Restore the American Dream."