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Speaking at an “Innovation Summit,” organized by the bipartisan tech advocacy group TechNet, executives called for tech-friendly policies in everything from taxes to energy research.

“The U.S. has a huge advantage: venture capital, the world’s best universities and engineers who exchange information,” said Cisco Systems (NASDAQ:CSCO) CSCO CEO John Chambers. “If we don’t act quickly, we could lose that lead.”

The panel also included John Chen, chief executive of database maker Sybase (NYSE:SY) SY, and Laura Tyson, a professor at U.C. Berkeley’s Haas Business and Public Policy Group and once the top economic adviser to President Clinton.

With the Iraq War, terrorism and health care dominating the race for the presidency, the trio said they fear politicians are paying too little attention to bedrock economic issues that hinge on U.S. competitiveness and innovation.

Increasing productivity growth by just a few percentage points, Chambers said, would create new jobs and boost middle-class incomes without fueling inflation.

Panelists also pointed out it will take innovation to end our reliance on foreign-produced and greenhouse-gas emitting energy.

Innovation starts with education, Tyson said. Too many students are dropping out of school, and too few are studying math and science.

“The first thing when they graduate, we want them to leave,” he said.

All three panelists called for an immigration policy that makes it easier for foreign workers to get jobs with U.S. companies.

Whoever wins the 2008 presidential election will have to quell what seems to be a rising wave of protectionism, Chen said. The sentiment is apparent in voters who want tighter immigration controls and others worried about the effect of outsourcing and foreign competition.

It’s not just here. Chen noted that China limits outside investment and imposes its own, sometimes incompatible, technology standards.

Still, all countries recognize the opportunities in tech innovation, Chambers said. “Boundaries and borders will come down,” he said. “It’s a trend no one can stop.”

Much of the Berkeley event centered around energy innovation, which participants called key to national security, economic growth and environmental health.

“We need a wave of innovation around energy” on the same magnitude of recent advances in information technology, Tyson said.

John Doerr, a partner at the Silicon Valley investment firm Kleiner Perkins Caufield & Byers, put it more strongly, in another panel discussion. He called the issue “more important than the Internet.”

He said the push will dwarf even the massive national efforts to build the first atomic bomb and launch the Apollo space missions. “This is about changing the energy infrastructure of the planet,” Doerr said.

Short of an E=MC 2-level energy breakthrough, Sun Microsystems (NASDAQ:JAVA) JAVA CEO Jonathan Schwartz asked companies to make better use of resources. Many Sun employees work from home via the Internet.

The company stopped printing its annual report in favor of electronic copies. That alone saves Sun $1 million a year, Schwartz says.

“It isn’t about hugging trees,” he said. “It’s about hugging the balance sheet and shareholders.”

Larry Brilliant, executive director of Google’s GOOG nonprofit arm Google.org, said he’s worried that energy and climate-change issues haven’t become more mainstream, but is encouraged by recent trends, including rising investments in alternative energies. “Let’s find a way to convert this crisis into an opportunity,” he said. “I’m more optimistic than I was before.”