Seven Questions for the CEO of the Consumer Electronics Association

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any computer or smartphone or tablet anywhere. Most of our graduates in STEM [science, technology, engineering, and math] are now foreign-born now, are not citizens. So we have to step up our game.

X: Do you see enough ninja-style innovation happening in consumer electronics right now? It seems to me that there’s a lot of fast-follower behavior. If one company like Jawbone comes out with a successful Bluetooth speaker, for example, all of a sudden there are 60 companies selling Bluetooth speakers.

GS: I think we are entering a phase of more rapid innovation in consumer electronics. We are certainly shifting. After a few years Moore’s Law may not be true anymore, so we may be going to more MEMS [microelectromechanical systems] and nanotechnology. There is great growth potential in robotics. Obviously anything Web-based or cloud-based is just a phenomenal growth area. And things that are more electromechanical, like a driverless car. There are many areas where the growth curve is foreseeable, and we just have to get there, and other areas like wireless health where it’s certainly going to be big but the details are difficult to project.

But I totally agree with your comments. Your example may be Bluetooth speakers; my example is tablets. At CES in 2013 we counted 50 different companies with tablets. We know that they won’t all survive. Some of them have done well, like the Samsung Galaxy, and the Kindle is still out there.

The point is that with every major breakthrough, there will be followers. That’s one of the wonderful things about the free market—sometimes the innovative product isn’t the breakthrough product, and someone else is going to make it better and make money on it. I am neutral about that. It’s the free market. But as a corporate strategy, I think it’s better to be the innovator than the copier. I think being different is better.

X: The CEA’s International Consumer Electronics Show is already one of the biggest trade shows in the world. As you think about how to make it better and more useful, rather than just bigger and more overwhelming, what are your priorities? Will the Eureka Park area for startups continue to grow?

GS: The show is doing amazingly well. It’s not that we’re brilliant, it’s just that it has captured so much innovation and become the meeting point for those focused on the future. It’s a five-senses experience that allows you to know a company and their innovations. Our goal with the show is to have it be the one place each year where everyone involved in technology at a global level can come together in a very efficient three or four days. And our research shows that people put tremendous value on that.

What we have to do better is make sure every show is different and fresh, so that we always have something that is compelling. We are always looking for new categories to expand to, whether it’s wireless health or robotics or the automotive sector. But we have a limit on our growth. We can’t be so big that people feel it’s impersonal, or they can’t fine people in their own interest areas. A lot of our investment is going into building a great mobile app for the show, so that people can connect and do business better.

Eureka Park is part of the philosophy of the show, which from the beginning was built around the smallest companies being exposed to investors, retailers, partners, and media. We are trying to figure out how we can expand it, given that the show is virtually sold out, but startups are excited and there is some great stuff. It is curated, growing, and important, because startups are where a lot of innovation comes from, and we want to keep that as a significant part of CES.

X: Let’s talk about the association itself. You told me when we met a little while ago that the CEA doesn’t ask the government for much. Yet you’re based in Washington and you have an important lobbying presence on Capitol Hill. If you’re not asking for things, are you playing a purely defensive role?

GS: Let me clarify. We don’t ask for money—it’s something we have never done and I hope we never do. What we are asking for is a focus on innovation as a strategy for our national government. We are at the cutting edge of a whole bunch of major issues; we are almost always there first and loudest, and I think we have an impact.

A few years ago, for example, we were focused on getting all of the free-trade agreements passed. What we have been focusing on more recently is what we call “strategic migration” and making sure that STEM graduates have a shot at citizenship, rather than kicking them out of the country. We have been very successful; Congress and the president support us. Sadly, this is all caught up in the bigger immigration bill, and the jury is out.

We are also focused heavily on reforming patent law, which has been the scourge of innovation, affecting startups as well as larger companies. It has diverted talent and drained corporate coffers and has been very bad for … Next Page »

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