[LINK] Obama, Brown eye IT for job creation

[Bernard Robertson-Dunn]

Obama, Brown eye IT for job creation
Contractor UK
8 January 2009
http://www.contractoruk.com/news/004141.html

Given Barclays’ vow yesterday to make another 250 IT contractors 
jobless, there is reassurance in the din of UK party leaders willing 
forward the job creator that is super-fast broadband.

Seeming to agree with Gordon Brown that the future is fibre, David 
Cameron pledged his government would strive to offer the upgraded 
broadband to British homes within a decade.

The Conservative leader’s view effectively seals the consensus, in and 
outside of Whitehall, that the PM’s vision to invest in a new network, 
to usher in a “new digital age,” is the right one.

The network, costing £29bn according to one industry estimate, would 
come in a public spending package that Mr Brown said will create, 
“probably”, 100,000 new jobs.

An impressive-sounding number of jobs no matter what the state of the 
economy and, argued Ovum analyst Peter Clarke, proof that Mr Brown has 
an “exciting vision”.

Clarke warned however that with major public projects taking up to two 
years to procure, the process must accelerate if the network is going to 
deliver any benefits in 2009.

In the US, it is not just broadband that is preparing for a shot in the 
arm to help the nation through recession, but also its entire digital 
and IT infrastructure.

Called to action yesterday, Congress was urged to devote $30bn (£20bn) 
to the IT industry, as part of President-Elect Barack Obama’s proposed 
$775bn economic stimulus package.

The call, in a report entitled ‘The Digital Road to Recovery: A Stimulus 
Plan to Create Jobs, Boost Productivity and Revitalise America’, claimed 
1m jobs could be created or retained.

Sounded by ITIF, the hi-tech think tank, its president Robert Atkinson 
explained why the tech industry was a more deserving recipient of 
federal money than its traditional rivals.

“Although projects to improve the country's traditional physical 
infrastructure (e.g., roads, bridges, sewer systems) are necessary and 
important, investments in certain parts of our national information 
technology (IT) infrastructure - America's digital infrastructure - will 
have a greater positive impact on jobs, productivity, and innovation.”

ITIF estimates that the $30bn for America’s IT network infrastructure in 
2009 will create 949,000 jobs, 525,000 of which will be in firms with 
fewer than 500 employees.

The proposed spending should be divided evenly in three areas: 
super-fast broadband networks, supporting 498,000 jobs, health IT, 
supporting 212,000 jobs, and a smart power grid, supporting the remainder.

“Investments in IT infrastructure should not be minimized out of concern 
that the projects will take too long to begin to have an immediate 
impact on the US economy,” Atkinson writes.

“If the stimulus measures are designed properly, they can quickly spur a 
large number of investments - from deploying more and faster broadband 
networks to switching to electronic health records to rolling out 
advanced energy metering technologies - that are 'shovel-ready.'”

Investment in IT infrastructure offers “superior” levels of job creation 
because it creates a ‘network effect’ – whereby “downstream industries” 
enabled by it create add jobs.

Atkinson added that new jobs that will emerge thanks to IT 
infrastructure’s unique capability to spawn new applications and 
services – “many manifested in entirely new industries and/or firms.”

“With the US economy now mired in a deep, and potentially prolonged, 
recession, increased investment is one of the best tools to stimulate 
aggregate demand and quickly get American workers back on payrolls,” he 
writes.

“Spurring investments in IT infrastructure not only can provide an 
important short-term boost to the US economy; it also can lay the 
groundwork for long-term economic growth, international competitiveness, 
and significant improvement in Americans’ quality of life.”

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Regards
brd

Bernard Robertson-Dunn
Canberra Australia
brd at iimetro.com.au