by Ben Worthen

Will Congress Stop the IBM/Lenovo Deal?

Feb 04, 20052 mins

In the last several months I’ve come to appreciate the role that innovation plays in our society and the extent to which our economy—and particularly the IT sector—depends on it. I’m currently finishing a feature story due out in April that looks at the future of U.S. innovation in the context of technology policy, and my colleague Chris Koch just finished a killer article looking at the latest trend of sending R&D offshore.

That trend seems to be at the heart of the government’s objections to the IBM-Lenovo deal, where Big Blue would sell its PC division to a Chinese company. In the last week or so, what seemed like a done deal has suddenly become enormously complicated. Three powerful Congressmen have urged Treasury Secretary John Snow to block the sale on the grounds of national security. Here’s a helpful article from IDG News Service that will get you caught up.

To me the national security argument rings hollow. The PCs are being made in China anyway. If someone was going to reverse engineer something they would have done it already (and probably have), and changing the name on the computer won’t change the chances of a hack.

What I think we are seeing is the first signs that members of Congress might not be as comfortable with offshore outsourcing as they thought they were. Keep in mind this is just my two cents, but it strikes me that the selling of a division may actually be approaching some sort of line, i.e., it is fine if you make the stuff there, just make sure that the intellectual property is owned by the U.S.

What do you guys think? Does it matter where R&D takes place? Does it matter who owns the intellectual property? Is there a line and if so where would you draw it?