Speaker Elect Nancy Pelosi Visits AeA for First Meeting off Capitol Hill Since the Election

Just nine days after the mid-term elections, Speaker Elect Nancy Pelosi visited the AeA Washington, DC, offices to talk about competitiveness, the top House Democratic Congressional priorities, and other issues.

The audience greeted Ms. Pelosi with a long standing ovation before she noted, �This is my first public appearance off Capitol Hill since the election. And I am proud to be at AeA.�

The Speaker Elect was accompanied by Rep. George Miller (D-CA), soon to be Chairman of the Education and Workforce Committee, and Rep. Anna Eshoo (D-CA), one of the Congressional Members from Silicon Valley.

It was a standing room only crowd of approximately 100 high-tech leaders, including executives and government affairs professionals from Cisco Systems, Electronic Arts, Google, Hewlett-Packard, Intel, Intuit, Microsoft, Motorola, Philips, QUALCOMM, Research in Motion, Sun Microsystems, Symbol Technologies, Symantec, Texas Instruments, Xerox, and Yahoo!.

The main thrust of her talk, though not the only one, was the Democrat�s competitiveness package known as �The Innovation Agenda.� She talked extensively about the role of AeA providing the intellectual stimulus for that agenda, including saying, �AeA gave us the legitimacy to go forward with our ideas.�

While visiting AeA, the Speaker Elect emphasized that she will work with Republicans to pass competitiveness legislation, �I don�t want it to pass with 230 votes. I want this to be truly bipartisan, and I want at least 350 votes to give this a real mandate that the country can get behind.� Ms. Pelosi discussed her recent meeting with the President, where they drew similarities between the Democrats Innovation Agenda and the President's American Competitiveness Initiative.

Ms. Pelosi additionally commented on:

Broadband � She told a funny story about how the making available of broadband for every American made it into the Democrats� Innovation Agenda. In the draft of that agenda they said broadband would be available for every American in 10 years. She then spoke with Larry Page, co-founder of Google, who said �ten years, why not two?� Mrs. Pelosi then noted �so we put in five years.�
Education/Competitiveness � In referring again to competitiveness and education she said �nothing brings more money to the Treasury, not tax credits, nothing, more than does the education of the American people.�
Energy and the Environment � She emphasized that �when we talk about energy, talk about the environment, we are market oriented.�
Sarbanes-Oxley � Ms. Pelosi said, �we put it in writing in our Agenda that we are going to revisit Sarbanes-Oxley.�

Since February 2005, when AeA released our report, �Losing the Competitive Advantage? The Challenge for Science and Technology in the U.S.," we have briefed over 100 Members of Congress. And not just Republicans, but we also were briefing Democrats as well, when many other lobbying organizations were ignoring the minority party. AeA is a bipartisan organization that always reaches out to both sides of the aisle. This being said, we also have a long running working relationship with many top ranking Democratic members of the House and the Senate, which puts us in a strong position with the new leadership.

Following Speaker Elect Pelosi's visit, Jim Turner, Chief Democratic Counsel to the House Science Committee, came to AeA the next day to discuss with AeA members the prospects of a competitiveness bill being taken up in the lame duck session or at the start of the new Congress. With the buzz still in the room from the preceding meeting the night before, Mr. Turner heralded AeA's report as being groundbreaking and the source of much of the material for other subsequent reports. He also noted that Rep. Bart Gordon (D-TN), the new Committee Chairman, will be using the AeA paper in crafting new competitiveness legislation that will come out of the Science Committee.

Lastly, on November 30, AeA will host a luncheon with the Chief of Staff to the newly elected House Majority Leader, Steny Hoyer (D-MD). I encourage you all to attend to discuss the priorities of the new Majority Leader.

With the Speaker, Majority Leader, House Science Committee, and White House behind Competitiveness it now has the traction to get those 350 votes that Pelosi is seeking. AeA will continue to lobby hard to make sure that we as an industry and as a country get that mandate.

Sincerely,
William T. Archey (bio)
President and CEO, AeA

New Assistant Secretary of Commerce for Export Administration Briefs AeA Members on Goals

On Tuesday, November 14, twenty-five AeA member company representatives met at the AeA offices in Washington, DC, with Christopher A. Padilla, the newly appointed Assistant Secretary of Commerce for Export Administration.

William T. Archey (bio), AeA President and CEO, who has known Mr. Padilla for many years, introduced him to the group noting that he understands the business perspective on export control issues, having formerly worked for technology companies AT&T, Lucent Technologies, and Eastman Kodak in addition to government posts at the Department of State and USTR.

Mr. Padilla outlined six goals for Export Administration. They include:

implementing new rules with respect to China;
supporting the efforts of the Deemed Export Advisory Committee (DEAC) during its one year charter;
implementing the Validated End User (VEU) concept for China and possibly other countries including India;
focusing on countries of diversion;
U.S. � India policy; and
the future direction of the U.S. export control system.

Mr. Padilla also stated that U.S. export controls need to be more targeted and focused to be effective. Member companies raised questions and shared their views with the Assistant Secretary on a range of issues, especially related to the proposed regulation on exports to China for military end use. Bob Rarog, Sun Microsystems, confirmed that AeA will be submitting detailed comments in response to the Federal Register notice on the proposed China rule.

For more information on the AeA Export Controls Committee or to join, contact Ken Montgomery, Director, International Trade Regulation, at ken_montgomery@aeanet.org or to learn more about all of AeA�s International committees contact Rob Mulligan, Senior Vice President International, at rob_mulligan@aeanet.org.

Rob Mulligan (bio)
Senior Vice President, International

For more information on the International Issues affecting your company, visit:

Impact on the Election on High Tech

Now that the Democrats have taken majorities in the US House and Senate, what�s the likely impact going to be on the industry in the 110th U.S. Congress? High-tech, even with Democrats in control, should fare quite well. This will not be true in all cases, but overall AeA does not see any deterioration in the influence or attractiveness of the high-tech industry as we've had in the past several years.

Here are the key issues we expect taken up by the new Congress pertinent to our industry:

Competitiveness - We expect a bipartisan effort between the House Democrats' Innovation Agenda and the President's American Competitiveness Initiative;
Trade - The positive consensus on free trade, which has lasted most of the last 30 years, is over. Trade legislation faces a rocky future in the next two years;
China - The relationship with China is going to change from a geo-political security issue to a geo-economical issue; and
Regulation Writ Large - There will be substantial changes that will have a particular impact on privacy, the environment, and other issues that could affect high-tech.
Sarbanes-Oxley - Rep. Barney Frank (D-MA) will be the new Chairman of the House Financial Services Committee and has expressed to our Board of Directors that he wants to reduce some of the requirements of Section 404, at least for smaller companies. It is unlikely this will be in a legislative fix but more likely through SEC or PCAOB regulatory actions.

In addition to the positive outlook on the industry, AeA is well positioned with leadership in the new Congress. There are a number of influential Democrats who come from high-tech districts or whose congressional districts are quite close to districts with a high concentration of high-tech companies.

House Speaker Elect Nancy Pelosi is from the California Bay Area, and possibly her closest ally in Congress is Anna Eshoo, one of the Democratic representatives from Silicon Valley. Rep. George Miller will be the new Chairman of the House Committee for Education and the Workforce and represents the 7th District of California. All three visited AeA on November 16 for the Leadership�s first meeting off Capitol Hill since the mid-term elections. The Speaker-elect emphasized, once again, the importance of the Democratic Innovation agenda and her intention of aggressively pursuing competitiveness legislation in the new Congress. Stay tuned.

John Palafoutas (bio)
Senior Vice President for Domestic Policy & Congressional Affairs

Receive AeA State Government Affairs' Weekly StateNet Capitol Journal

Sign up to receive information and intelligence from all 50 states in the AeA State Government Affairs' (AeA/SGA) weekly StateNet Capitol Journal. This weekly newsletter is an AeA Members Only benefit that provides up-to-the-date analysis of gubernatorial, legislative, and regulatory issues across the country.

For a sampling of what to expect, here are clips from articles in the most recent edition, published on November 20:

GUBERNATORIAL ELECTION ROUND-UP
With the votes counted and the races over, the 36 men and women selected to govern their respective states earlier this month can relax and take a breath before moving on to the next task at hand. But for the 10 new governor-elects and 26 incumbents that won re-election, the rest break will probably be short-lived, as the adrenaline of the campaign trail will soon morph into the everyday grind of turning election-year promises into reality.

GREGOIRE LAYS OUT EDUCATION PLAN: WASHINGTON
Gov. Christine Gregoire (D) released a sweeping education proposal last week that includes, among many things, full-day kindergarten offered at all public schools, an upgraded and standardized math and science curriculum and capping annual tuition increases at public colleges and universities at 7 percent, with increased state support.

To sign up for these updates email Lindsey Bonnett, at lindseyb@statenet.com, or for more information on AeA's State Government Affairs program contact Marc-Anthony Signorino at marc-anthony_signorino@aeanet.org.

Marc-Anthony Signorino (bio)
Director, State Government Affairs

Attend the AeA State Policy Action Network Conference
January 9-10, 2007 ~ Santa Clara, CA

AeA State Government Affairs' (AeA/SGA) SPAN conference returns to the California Bay Area in January. Register today at www.aeanet.org/span2007!

Attend AeA's Government-Industry Executive Interchange:
Actionable Opportunities in E-Health and Identity Management

AeA's next Government-Industry Executive Interchange will be on December 7 at AeA's David Packard Conference Center in Washington, DC, and will focus on E-Health & Identity Management issues. The event is nearly sold out, so register today to guarantee your attendance.

These AeA Technology 4 Government events are known as the premiere executive learning and networking series for high-tech leaders with federal Chief Information Officers, program managers, and top government procurement officials.

Keynotes will be provided by:

Robert T. Howard (bio)
Chief Information Officer
U.S. Department of Veterans Affairs

General Dale Meyerrose (bio)
Chief Information Officer
Office of the Director of National Intelligence

Additional confirmed speakers include:

Government Panelists:

John Garing, Chief Information Officer, Defense Information Systems Agency (DISA)
COL. Tom Hogan, Deputy Program Executive Officer, Army, PEO EIS
Robert Lentz, Director of Information and Network Assurance, Dept. of Defense
Rod MacDonald, Chief Information Officer, US Customs and Border Protection, Dept. of Homeland Security
Tim Schmidt, Chief Technology Officer, Dept. of Transportation
Dr. Jon White, Agency for Healthcare Research and Quality, Dept. of Health and Human Services

Industry Panelists:

Teresa Carlson, Executive Director Civilian Sales, Microsoft US Federal Government
Greg Clawson, Director, Federal Operations, Symbol Technologies
Wayne Fullerton, National Federal Operations Director, Cisco Systems

Register for this event online or for more information on this program contact Goldy Kamali, Director, Federal Government Market Group, at 202.682.4432.

Greg Poersch (bio)
Vice President, Government and Commercial Markets Group

Early Applications Now Being Accepted for 2007 AeA/Stanford Executive Institute
Apply by December 29th and Save $1500

Join high-tech executives from around the world at the 2007 AeA/Stanford Executive Institute, August 12-23. During eleven intensive and invigorating days on the Stanford University campus, attendees advance their business and leadership perspectives, explore operational best practices, and address critical technology industry challenges with colleagues and top professors in high-tech management.

With an accelerated MBA-style format, renowned business and engineering faculty, and a technology industry focus, the Institute assists executives in addressing the pressures of fierce global competition and rapid innovation.

Apply online by December 29th and receive $1,500 off tuition. In addition, companies that send three or more executives receive a team discount of 5% per attendee. To hold your company spots or request more information, contact Jeannine Seremi-Banayat at 408.987.4276 or visit www.aeanet.org/stanford.

What's Special About AeA's New UnitedHealthcare Insurance Program?

AeA member companies have a whole new set of health care solutions to consider for their medical and dental insurance program. The new, nationally available program introduced in September 2006 is designed to address the requirements of technology companies.

Affordability and efficiency: This new AeA program includes special pricing considerations for eligible companies and the advantage of renewal rates based on aggregated experience of all participating companies. AeA program participants with fewer than 100 employees may opt to receive complimentary assistance with Section 125 (Pre-tax Premium) plans and COBRA administration services. These administrative services are also available to larger groups at a significant discount.

Expanded services to employees: A key consideration in your choice of a health care insurer is the ease and simplicity of administration. UnitedHealthcare is an industry leader in providing advanced Web based automation tools. On the myuhc.com Web site, your employees may access claim status, find a United Health Premium designated doctor, estimate the cost of a medical procedure, compare hospitals, access information on many health care topics, and much more.

AeA and UnitedHealthcare are offering the Care24^SM expanded employee assistance program that includes access to nurses, counselors, and attorneys able to assist with legal, financial, and medical issues for covered employees and their dependents. Mental health features of the AeA program are fully integrated with the Care24 employee assistance program.

Keep your employees healthy: Wellness programs are a proven means to help control the cost of health care by empowering employees to improve their well-being and productivity. The AeA Health! National Wellness Challenge, beginning in January 2007, offers tools and support for participating companies to motivate and focus employees on proper diet, exercise and smoking cessation.

UnitedHealthcare offers a specialized wellness counseling program for AeA member companies with more than 50 employees. All participating companies have access to UnitedHealthcare's Online Personal Health manager Web site which offers a confidential personal wellness assessment and a variety of 6-week healthy lifestyle programs. UnitedHealthcare also has a full suite of disease management and chronic condition support programs to help employees dealing with difficult medical issues to speed recovery and to seek the best possible medical care for their conditions. These programs are designed to support healthy pregnancies, and to provide information and resources for members living with conditions such as heart failure, diabetes, asthma, coronary artery and pulmonary obstruction diseases.

Quality: UnitedHealthcare has invested extensively in a national network of 500,000 physicians and health care professionals and 4,600 U.S. hospitals. The United Health Premium designation program empowers individuals with information to help them choose the best provider for their needs by identifying those physicians who meet or exceed quality and efficiency criteria, based on claims-related data that reviews physician practice patterns compared with evidence-based medical guidelines.

The new AeA program welcomes member companies of all sizes and provides customizable affordable and flexibility design options to best serve the needs of your employees and your company budget. Policy anniversary dates can be structured to fit your company's fiscal year. The program is offered through specially designated preferred brokers. Please call Veronica Franco at 202.682.4459 to learn more about this program and get started on a better health care solution for your team.

Administrative services to self-funded plans provided by United HealthCare Services, Inc., United HealthCare Insurance Company, United HealthCare Service LLC or their affiliates.

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Register to Attend the 2007 AeA Micro Cap Financial Conference

May 6-8, 2007
Monterey, California

Presenting Companies:
Register by January 26 & Save $200

Featuring up to 120 publicly traded technology companies with up to $200M in market cap or revenues, the AeA Micro Cap is the single most time and cost effective event for emerging companies and investors in the high-tech industry. Typically selling out within just weeks, the conference will provide an opportunity to:

Access 300+ investors and executives from up to 120 companies in one location;

Capture the attention of technology focused Investors during the General Session;

Utilize the small group break out sessions to exchange information and make contacts; and

Network with fellow executives and the financial community within a casual setting.

For more information, visit www.aeanet.org/microcap or contact AeA's Financial Conferences Team at 408.987.4236.

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U.S. Tech Industry Adds 140,000 Jobs in First Half of 2006

The U.S. high-tech industry employed 5.8 million people as of June 2006,
the highest level since 2002

U.S. High-Tech Industry Employment
(January 2006 - June 2006)

Source: U.S. Bureau of Labor Statistics

The U.S. high-tech industry is once again adding jobs to the U.S. economy across a variety of manufacturing and services sectors. The growth is steady and fairly consistent over the last six, 12, and 18 month time spans, according to preliminary data. Annualized employment data will be available in AeA�s Cyberstates 2007 to be published early next year.

For more details on high-tech employment trends, see AeA's most recent installment of our ongoing Competitiveness Series.

For more information on Industry Data and AeA Publications visit
www.aeanet.org/research

Speaker Elect Nancy Pelosi Visits AeA
Thursday, November 16, 2006
Washington, D.C.

Speaker Elect Nancy Pelosi, accompanied by Congressman George Miller, soon to be the Chairman of the Education and Workforce Committee in the House, and Anna Eshoo, Congresswoman from Silicon Valley and probably Ms. Pelosi�s closest friend, came to AeA�s Washington, DC, offices and the David Packard Conference Center on November 16. It was a standing room only crowd of approximately 100 high-tech leaders...read more.

AeA President & CEO welcomes Pelosi, Miller, and Eshoo (R-L)

Speaker Elect Pelosi addresses 100+ technology leaders

Rep, Anna Eshoo, Rep. George Miller, and Speaker Elect Nancy Pelosi (L-R)

On November 5-8, nearly 600 investors attended the 36th Annual AeA Classic Financial Conference in Monterey, CA. Attendees were able to hear presentations from 152 high-tech AeA member companies and a keynote address from SEC Commissioner Paul S. Atkins.

On November 14, twenty-five AeA member company representatives met at the AeA offices in Washington, DC, to hear from Christopher A. Padilla, the newly appointed Assistant Secretary of Commerce for Export Administration. Pictured are William T. Archey, President & CEO, AeA; Mr. Padilla; AeA's East Coast Chair of the Export Controls Committee Bob Rarog, Sun Microsystems; and Rob Mulligan, Senior Vice President International, AeA (L-R).

The R&D Tax Coalition held a press conference on Capitol Hill with the heads of all of the major high-tech trade associations on November 14. Pictured William T. Archey, President & CEO, AeA, and Phil Bond, the former Undersecretary of Commerce for Technology and current head of ITAA, listen to Rep. Nancy Johnson (R-CT) discussing the importance of reinstating the U.S. R&D Tax Credit, which has been expired since December 31, 2005.

Newt Gingrich, former Speaker of the House, spoke on the importance of R&D in relation to U.S. Competiviveness on November 16 in Washington, DC, at a Task Force for the Future of American Innovation conference (watch video). AeA and Intel hosted the task force meeting with additional speakers including Ambassador David Abshire and Larry Wortzel, Chairman of the U.S.-China Economic and Security Review Commission.

On November 17, Dr. Dan Arvizu, Director, National Renewable Energy Laboratory, addressed AeA Mountain States Council members on renewable energy and energy efficiency issues in Denver, CO. Pictured

Attend AeA's Government-Industry Executive Interchange: Actionable Opportunities in E-Health and Identity Management

Attend AeA's Government-Industry Executive Interchange:
Actionable Opportunities in E-Health and Identity Management