Thread,
Of course, I think the tech guys are on to something. They should be listened to, because let's face it, most of the job growth in this country over the last 20 years at least, has been enabled by science and technology investment. So any New Deal spending should be focused on investments, not just bailouts, so that we get a return on our money.
The Tech Solution To The Recession
forbes.com
Andy Greenberg, 01.06.09, 09:40 AM EST
IBM, IT industry argue that spending on smarter infrastructure will offer more job creation bang per stimulus buck.
Just as 2008 was defined by Barack Obama's electoral victory, 2009 will be defined by another competition the incoming administration sparked: the race to grab the hundreds of billions of dollars the president-elect has pledged to spend revamping America's infrastructure.
Unlike the beleaguered automakers and banks, high-tech companies aren't begging for bailouts. But they have plenty of ideas about how the administration should spend its dollars as it seeks ways to jump-start the economy and create millions of jobs.
IBM (nyse: IBM - news - people ), for starters, believes that a massive infusion of cash should go toward cutting-edge technology. Last month, IBM CEO Sam Palmisano presented a report to Obama's transition team from the Information Technology and Innovation Foundation (ITIF) that argues that a $30 billion investment in universal broadband, health information technology and a smarter power grid could create 950,000 jobs.
The reasoning behind the technology think tank's big prediction, however, is far from straightforward. The ITIF is slated to present the report at a press conference in Washington, D.C., on Wednesday. But according to a summary of the ITIF data presented to the Obama team and obtained by Forbes.com, not every dollar spent would have the same effect--and that raises serious questions about precisely what tech-focused stimulus would best serve the economy.
Investing in broadband networks, contends the ITIF, could create twice the number of positions as putting the same amount of money into a more efficient power grid or into a more advanced health care IT system. The analysts estimate that investing $10 billion in broadband infrastructure, for instance, could produce nearly 500,000 jobs for a year. Putting $10 billion into better networks and devices devoted to storing patient data or into smart systems to improve the distribution and storage efficiency of power utilities might each create fewer than 250,000 jobs, the ITIF calculates.
Those disparities, and IBM's argument for focusing a stimulus plan on technology in general, come from what economists have dubbed "network multipliers." The computing giant, and ITIF, argue that technology creates more jobs than other types of infrastructure by enabling new types of businesses.
"If you build more roads, people don't buy more tires or GPS systems, but if you build better networks, you create entirely new business applications," says Rob Atkinson, president of ITIF and an author of the think tank's report. "Something like YouTube could never have existed without broadband." |
