* Bill Clinton was effective in working with businesses
* Cisco has 10 candidates as potential successor to CEO
* Cisco likely to seek growth opportunities outside U.S.
* Acquisition in data storage not a big priority
By Nicola Leske and Jim Finkle
NEW YORK, Sept 25 (Reuters) - Cisco Systems Inc CEO John Chambers, a supporter of Mitt Romney, says the country's next head of state should take his cues from former President Bill Clinton who was able to work effectively with businesses to generate jobs and create budget surpluses.
"There's a lot to learn from President Clinton. It kills me as a strong Republican saying it, but he was the most effective president during my lifetime," Chambers told Reuters in an interview on Tuesday.
"And when business got out of line, he smacked them," Chambers said.
Although President Barack Obama was the darling of the technology world during his campaign in 2008, Republican presidential candidate Mitt Romney, a former private equity executive, has made inroads in Silicon Valley.
Some technology industry leaders view Obama as anti-business because of uncertainty blamed on the Dodd-Frank financial regulation reform and healthcare overhaul.
"The business community is very comfortable with Romney," Chambers said, but added that no matter who wins the election in November, serious challenges lie ahead.
He added that Cisco customers in the U.S. were reluctant to invest because of the fiscal cliff despite corporate America being in "remarkably good shape".
Fiscal cliff refers to the impact of around $500 billion in expiring tax cuts and automatic spending reductions set for 2013 as a result of successive failures by Congress to agree on an orderly alternative method of reducing budget deficits.
"If we don't deal with the fiscal cliff and don't deal with predictability on taxes for both citizens and business, with the rest of the world in a struggling state, this is really bad for us," he added.
On his own future at Cisco, where he has been in charge for almost 18 years, Chambers repeated he would not be in that role in two to four years and that the company had 10 people who were potential successors.
"We have always had a hit-by-the-bus scenario -- that's Gary Moore for me," Chambers added, speaking of Cisco's chief operating officer.
Asked if he would consider accepting a political appointment himself, Chambers said he had been asked by previous administrations but turned them down.
"I don't enjoy politics," he said. "I like to get things done and I like Republicans and Democrats, and that doesn't always work well."
Cisco's bread and butter business are routers and switches that move data traffic but the company is expanding into other areas such as network security, video communication and data centers in an effort to ensure future growth.
Its customers are mainly businesses and governments, giving it a good view of corporate and public sector budgets and corporate spending.
Chambers said Europe would remain challenging, and said "if China slows down we all have big problems but slowing down to them might mean six to seven percent growth".
He also cautioned that emerging countries would likely not be as strong as they were during the last economic turnaround
"Good news and bad news, the U.S. has to pull us out of this economic slowdown. I think more and more people are coming to that consensus," Chambers said.
Cisco itself is more likely to look for growth outside the United States however, Chambers said.
"We will see growth in the U.S. and we will selectively acquire in the U.S. but we prefer to use our global opportunity."
Cisco this year acquired UK-based TV software developer NDS for $5 billion, its biggest deal since its $3.3 billion purchase of Norwegian conferencing company Tandberg in 2009.
Asked about potential acquisitions in data storage, Chambers said it was not a high priority as Cisco intended to keep its partnership with leading data storage company EMC even if the two were not as close as they used to be due to plans by EMC unit VMware to buy network technology start-up Nicira.
"EMC will be my best partner but not as strong as before because of the Nicira acquisition where we are going to compete in terms of direction."
Chambers admitted that it may be too late for Cisco to enter the data storage segment on its own.
"Storage is an evolution and I think we are much better off partnering with leaders like EMC and Netapp than doing it all ourselves and I think that market has probably moved in terms of opportunity."