Silicon Valley and the 2016 Presidential Election

All this week on The DOZ Blog we’re looking at the US presidential race. Whether it’s the marketing, the social media, the branding, or the impact of the technology sector, we’re diving deep into the campaign and identifying lessons for politicians and business people alike. In today’s post we take a close look at the impact of Silicon Valley on the 2016 race. No longer just a mecca for startups on the west coast, Silicon Valley today is a significant player and a major voice in the campaign for the White House – and here’s how.

2016 is the election when Silicon Valley—its players, its policy priorities, and, oh yes, its money—finally upstages the old 20th-­century power structure and seizes control of the political game.

Wired Magazine

The connection between Silicon Valley and Washington DC became clear for most people around the time of the 2008 presidential election. Though long a powerhouse of innovation and the home to some of the most exciting technology firms on the planet, Silicon Valley had not played a direct role in any presidential campaign before then. Sure, there was money flowing from technology coffers to preferred candidates, and there was some experience for sale when it came to content marketing and the blogosphere, but in 2008 all of that exploded.

Barack Obama’s 2008 primary and general election campaigns changed the way that electoral politics worked in the United States. Where the 2000 and 2004 presidential campaigns had relied heavily on tried and true communication tactics like robocalling, phone banking fixed lines, and direct mail, Obama’s campaign was data driven, social media savvy, and focused on direct outreach by targeted email to supporters, donors, and volunteers.

In previous election cycles direct mail lists were some of the most coveted resources of any campaign. In this new era it was all about email. Any previous campaign knew that mainstream media was the place to go for campaign coverage. In 2008 and since the alternative media, cable news, and social media became the places where stories were leaked, broke, or otherwise emerged via grassroots or astroturf efforts on the part of supporters.

And in the eight years since Obama’s breakthrough the impact of new technology, digital media, and Silicon Valley companies and investors has only grown larger. As Wired argues, if 2008 was the social media election then 2016 is the Silicon Valley election.

In this post we look at the three ways in which Silicon Valley is making its mark on the race for the White House in 2016, namely Money, Campaigning, and Policy.

Money

In politics, money talks.

And in the wake of the Citizens United decision, money has a voice that is louder than ever in American politics. Luckily for candidates there is still cash floating around in Silicon Valley ready to spend up big in supporting a White House run, though it is not flowing to all candidates in equal measure.

According to OpenSecrets.org, one candidate above all others is winning donations from the internet and technology sector: Hillary Clinton.

In the current presidential cycle the Democratic favorite has received almost half of all of the donations from the sector. She has pulled in more than $1.1 million in campaign contributions versus just $268,000 for her rival, Bernie Sanders, in a distant second place. The Republican frontrunner, Donald Trump, has received a relatively paltry $10,000 in donations, though he is proud of self-funded status and so we should take this low total with a pinch of electoral salt.

Overall, though, the two Democrat candidates have the majority of the money coming out of the tech and internet sector, with less than 40% being divided between 16 Republican candidates, most of whom have now dropped out of the race.

But this is just the money that is being declared to the FEC and the IRS. When it comes to raising ‘dark money’ or donations to non-profit Super PACs, Silicon Valley might be fuelling more than just a couple of million in spending. Turning to CROWDPAC for details, the amount of money flowing from technology-related firms to candidates is well in excess of the official campaign contributions.

The biggest donor so far this cycle? Robert Mercer, an IBM alum who founded Renaissance Technologies which, despite the name, is a hedge fund, not a technology firm. His $11 million has gone to Republican Ted Cruz so far, but his technology links are probably a little tenuous.

Larry Ellison, though, is still deeply involved in the technology sector and he’s pumped $3 million into the race so far this cycle, the larger part of which has flowed into Marco Rubio’s campaign.

Indeed, once all the hard, soft, and PAC money is accounted for, the darling of the technology sector turns out to be Rubio. The Florida senator has won more than $2 million more than his closest rival for Silicon Valley cash, Hillary Clinton, perhaps testament to his centrist perspective, youthful outlook, and his openness (in relative terms) to the immigration that the technology sector considers a central issue in this election cycle.

Money, though, is just the most public of ways in which the technology sector generally and Silicon Valley specifically is impacting this campaign. Behind the scenes it’s the technology sector that is in fact driving the campaigns towards November.

Campaigning

Since 2008 national presidential campaigns have benefited from the experience, knowledge, and practical know-how of Silicon Valley in driving everything from get out the vote efforts to voter targeting, segmentation, and polling efforts. As email has become more important than direct mail and as smartphones became ubiquitous and, with them, the dedicated app, technology workers and the Silicon Valley firms that employ them have become key members of the campaign staff.

Media outlets have covered this transfer of knowledge and the expertise of the industry in campaigns widely. It’s no secret, and when tech workers move from the west coast to the east coast to get people elected rather than build products, people notice.

Here’s Quartz on Google/Alphabet’s Eric Schmidt and his Clinton-backing startup, The Groundwork:

The Groundwork, according to Democratic campaign operatives and technologists, is part of efforts by Schmidt—the executive chairman of Google parent-company Alphabet—to ensure that Clinton has the engineering talent needed to win the election. And it is one of a series of quiet investments by Schmidt that recognize how modern political campaigns are run, with data analytics and digital outreach as vital ingredients that allow candidates to find, court, and turn out critical voter blocs.

But campaigns—lacking stock options and long-term job security—find it hard to attract the elite engineering talent that Facebook, Google, and countless startups rely on. That’s also part of the problem that Schmidt and the Groundwork are helping Clinton’s team to solve.

The Groundwork is one of the Clinton campaign’s biggest vendors, billing it for more than $177,000 in the second quarter of 2015, according to federal filings. Yet many political operatives know little about it. Its website consists entirely of a grey-on-black triangle logo that suggests “the digital roots of change” while also looking vaguely like the Illuminati symbol…

Republican candidates, too, have had tech talent driving their campaigns. Kentucky Senator Rand Paul had one of the most lauded digital marketing campaigns before he conceded the race for the nomination, led by Texas native Vincent Harris.

Harris recounted some of the high points on the campaign trail in a long post on Medium:

The summer of the campaign saw the height of our digital and data infrastructure. We had a wonderful Chief Technology Officer in Ron Schnell, a fantastic tech advisory council, tech spaces in three cities, a wonderful firm of developers that had designed the official logo and assisted with the website and security (Cando), a full time creative director in-house for the campaign (Marianne Copenhaver),my company working on content/ads, and a large working budget. Our campaign had built a digital dream operation.

We opened working spaces at Austin’s Capitol Factory, as well as a space in San Francisco in order to communicate with and reach out to the tech community. There was even a successful hackathon held at the California location.

It wasn’t just the staff that was bought into digital, it was Senator Paul himself. He expressed this with time and constantly generating ideas for us to use online.

Harris also talked about the app that Paul’s team produced and the utility of such elements in a digital campaign for the White House. These apps, though, have not emerged without controversy, with the New York Daily News reporting that the amount of personal data that the apps collect may be far more than supporters installing the app imagine.

Ted Cruz’s app, for example, gathers “detailed information from its users’ phones — tracking their physical movements and mining the names and contact information for friends who might want nothing to do with his campaign”. The point of all this data collection, according to the Daily News, is to feed it into “a vast database containing details about nearly every adult in the United States to build psychological profiles that target individual voters with uncanny accuracy”.

Silicon Valley and the technology sector, as always, is good at doing what it can without necessarily stopping to consider whether it should – and because it is, it’s no surprise that the sector is playing a larger part in lobbying and policy debates.

Policy

Open Secrets records that the technology sector has spent significant sums lobbying Washington DC in recent years to influence policy in the sorts of directions that benefit the sector. How mush is significant? Consider:

• 2008: $137 million
• 2009: $131 million
• 2010: $131 million
• 2011: $128 million
• 2012: $124 million
• 2013: $130 million
• 2014: $117 million
• 2015: $121 million

To put those figures in another way, between 2008 and 2015 the technology sector has spent around $15,000 per hour lobbying politicians to get their way. This sort of spending means the sector ranks fourth among all industries for its spending on lobbying, beaten out only by the pharmaceutical, insurance, and energy industries.

The policies that the technology sector are lobbying for are important to highlight as they are increasingly mainstream concerns for a technologically-active electorate. The Information Technology Industry Council is the leading advocate group for the technology sector in Washington and lists 15 policy priority areas. These areas run the gamut from accessibility and communications through to immigration, energy, and tax policy.

It’s impossible to argue the industry as either Republican or Democrat at a policy level. While the young workers in Silicon Valley may favor Democrats or centrist libertarians, at the policy and industry level the policy positions vary. Tech firms, for example, prefer an immigration process that is more open, easier to negotiate, and focused on bringing in the best talent from around the world to work for technology firms in the US. It’s a tough sell in an economic climate where jobs are hard to come by and graduates of solid college programs have difficulty finding work, yet it is also essential if Silicon Valley is going to grow employment in the longer term.

At the same time, ITIC calls for lower taxes to encourage companies to stop offshoring their income. Technology companies including Google, Apple, and Facebook have come under significant criticism for keeping profits offshore in arrangements that minimize US taxes while maximizing profits. With technology firms calling for a rethink of the way in which the US taxes earnings globally there are billions of good reasons for backing candidates who’ll help deliver on this dream.

Conclusion

If 2008 was the social media election then 2016 is shaping up to be the Silicon Valley election. The impact of the technology sector – in money and donations, in driving campaigns forward, and in setting policy directions – is significant and growing. As the field firms up in the race for the White House and as the new president takes office early in 2017, the role of the technology industry in the elections and governance of the country will only be more important. The world, in short, has changed.