Home' Technology Review : May June 2009 Contents FEATURE STORY
TECHNOLOGY REVIEW MAY/JUNE
January, the ITIF estimated that roughly a million jobs would be
created by spending $30 billion on broadband, smart-grid tech-
nology, and health-care information technology in 2009. While
the stimulus bill broke down the spending slightly di erently and
extended it over several years, such forecasts of job creation served
to justify the inclusion of heavy technology spending in the leg-
Likewise, a study prepared last fall by UMass's Pollin and his col-
leagues shows how spending $100 billion over the next two years
on energy-related investments could create two million "green"
jobs. The report identified six funding areas, including solar, wind,
and advanced biofuels, that it argued would create jobs and facili-
tate transition to a "low-carbon economy." Although Pollin says
he researched and wrote the paper as an academic, the work was
published in September by the Center for American Progress, a
think tank whose CEO, John Podesta, led Obama's transition team.
And like the ITIF study, Pollin's report foreshadowed many of the
spending provisions in the stimulus legislation. Pollin notes that
while the bill's spending for energy conservation and renewable
energy is lower than the total recommended in his report, many
of the legislation's details "are kind of what I proposed."
The theoretical justification for the government's stimulus
package derives from John Maynard Keynes, the 20th-century
British economist. Writing during the height of the Great Depres-
sion, Keynes famously suggested that if better job-creation
schemes were not available, the British Treasury should fill bottles
with money and bury them in old coal mines for people to dig up.
That idea is central to the ITIF's policy suggestions, Atkinson
says: "Our main message is that innovation could be Keynesian
in nature. In other words, solar-energy bottles."
Atkinson has little patience with critics who object that invest-
ing in long-term technology growth requires a more deliberate
strategy; they are "being naïve to the real world," he maintains.
"This is our one chance," he says of the massive infusion of govern-
ment funding for new technologies. "It's almost like free money."
Those who criticized the bill's provisions for technology spend-
ing didn't understand that innovation could have a big short-term
stimulus e ect and, at the same time, "have a much better long-
term e ect than virtually anything else in the package," he says.
"They couldn't walk and chew gum at the same time."
Indeed, that deliberate mixing of two goals---immediate job cre-
ation and economic growth through the development of IT and
energy technologies---is just what rankles many economists. Paul
Romer, an economist at the Stanford Institute for Economic Policy
Research, is one. "If I sat down and tried to design a stimulus bill
most likely to be e ective to getting us back to full employment,
there is a good chance that this kind of spending on technology
would not have been a part of that bill," says Romer, who has spent
his career studying the relationship between technological prog-
ress and economic growth. The prospect of spending so much
money on technology projects and science programs provoked
a "feeding frenzy," he says. "Everyone was trying to grab as much
as they can."
"If we believe subsidies will speed up technological change, we
should do that on its own terms, separate from a stimulus," says
Romer. And he worries that the heavy technology spending in
the bill could eventually deter innovation strategies that would
prove more e ective. "The cost here is not only the dollars," he
says. "[It] may also be the dog that doesn't bark---the truly impor-
tant program that we could have put in place if we went about
encouraging innovation in a thoughtful way. Having prominent
Tech portions of
Energy efficiency and
THE JOBS JOLT
According to the administration's economic analysis, the
stimulus bill will result in more than three million jobs over
the next two years. Last year, the Information Technology and
Innovation Foundation predicted that a $30 billion invest-
ment in digital infrastructure would mean nearly a million
jobs. Its analysis assumed that the money would be paid out
over a year (for the smart grid, the estimated spending was
$50 billion over five years), but a report from the Congres-
sional Budget O ce estimates that much of the technology
spending will not reach the economy until 2012 or later.
JOBS WILL BE CREATED ...
Estimate of jobs created or retained per $10 billion invested
... BUT IT WILL TAKE TIME FOR THE STIMULUS
MONEY TO BE SPENT.
Source: Information Technology and Innovation Foundation; Congressional
Budget O ce
Links Archive July August 2009 March April 2009 Navigation Previous Page Next Page