Following is a guest blog from Christopher Caine:
While much has been written and said about President-elect Barack Obama’s statements to invest heavily in the infrastructure of the United States, not enough attention has been given to ensuring we connect our physical and digital infrastructures to create new 21st century systems. We need to make a conscious decision to leap forward, boost productivity, and create comparative advantage for our nation in a global economy.
Though many studies exist about how many jobs can be created by investing in traditional physical infrastructure, none exist for the digital corollary. So, at IBM’s request, the Information Technology and Innovation Foundation (ITIF) conducted a study that showed investing three areas of the nation’s IT infrastructure would yield more than 940,000 new jobs each year.
At the invitation of the incoming U.S. Administration, IBM’s CEO, Sam Palmisano, recently presented the findings and recommendations from this study to Barack Obama’s transition team. I want to share with you a few of the key findings.
Most notably, the study yielded three specific recommendations of where the U.S. Government should invest for maximum, high value job creation: Broadband, Health IT and Smart Energy Grids. Investing $30 billion in these three areas in 2009 would create approximately 949,000 jobs in the United States. Of those, approximately 525,000 jobs will be in small businesses (defined as firms having fewer than 500 employees).
The graph below outlines these potential results:
In each of these areas, the government has an opportunity to make initial seed stimulus investments that offer superior job creation and economic growth benefits because they create what economists call a “network effect.” This network multiplier arises from new consumer and business behaviors, functionalities, and downstream industries enabled by the IT infrastructure. For example, traditional public works investment projects, such as building or improving highways, will not likely spur innovations in the auto industry or purchases of better tires for cars. However, building the smart grid will spur a host of innovative new products and services from hybrid plug-in electric vehicles to smart appliances to more investment in renewable energy.
Given these opportunities, you’ll continue to hear a lot more about these topics – smart grids, healthcare and broadband – from IBM in the near future.
The need is clear. The opportunity is in front of us. The benefits are tremendous. Now, will we have the wisdom to invest in our real future? I believe so.
Christopher G. Caine,
Vice President, IBM Government Programs