The Asian Age
The time-tested way for governments to create jobs in a hurry is to pour money into old-fashioned public works projects like roads and bridges. President Obama's economic recovery plan will do that, but it also has some ambitious 21st century twists.
The $825 billion stimulus plan presented this month by House Democrats called for $37 billion in spending in three high-tech areas: $20 billion to computerize medical records, $11 billion to create smarter electrical grids and $6 billion to expand high-speed Internet access in rural and underserved communities.
A study published this month, which was prepared for the Obama transition team, concluded that putting $30 billion into those three fields could produce more than 900,000 jobs in the first year. The mix of proposed spending is different in the House plan, but the results would be similar, said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, which did the study.
Beyond creating jobs, advocates say, government investment in these technology fields holds the promise of laying a lasting foundation for more business innovation and efficiency, while helping to create new digital industries.
“The appeal of these kinds of investments is that you not only get the stimulative effect but also build a platform for productivity gains and long-term growth,” said Blair Levin, a former senior official at the Federal Communications Commission who was a technology policy adviser on the Obama transition team.
During the campaign and afterward, Obama has championed policies to promote electronic health records, better broadband networks and power grids that use computers and sensors to finetune electricity use.
But the standard for including any initiative in the economic recovery plan is that it be “timely, targeted and temporary,” while also creating jobs, Levin said recently in an address to the Congressional Internet Caucus, an advisory group. Not every investment in these technology fields, he said, fits those criteria.
The technology industry is not typically viewed as a prolific job producer. Much of its manufacturing is highly automated. But bringing technology to services fields like health care, telecommunications and energy can be labour intensive and thus generate jobs.
At the top of the jobs pyramid, the design of new technology is done by scientists and engineers with advanced degrees. The installing, tweaking and maintaining of that technology in specific industries involve a far broader base of workers with a range of training, skills and education.
“There is a huge implementation phase to the adoption and use of these kinds of technologies locally,” said John Irons, an economist and research director at the labour-oriented Economic Policy Institute in Washington. “The jobs involved do tend to span the spectrum of skills and income levels. And they are not going to be outsourced offshore.” The job-generation estimate by the Information Technology and Innovation Foundation translates into more than 30,000 jobs created for each $1 billion of government investment — roughly similar to projections for public works spending.
But proponents of spending on digital infrastructure say the beneficial spillover effects are greater than for conventional public works. The high-tech investments, they say, can be the contemporary equivalent of federal financing for highways in the 1950s, which fostered the growth of businesses like automakers and national retail chains.
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