WATPA: FW: Obama stimulus plan aims to boost digital economy

Obama stimulus plan aims to boost digital economy

President-elect Obama's proposals would mean new computers for schools,
expanded broadband access, and funding on technologies to reduce medical
costs

By Patrick Thibodeau, Computerworld
December 09, 2008 InfoWorld

http://www.infoworld.com/article/08/12/09/Obama_stimulus_plan_aims_to_boost_
digital_economy_1.html
<http://www.infoworld.com/article/08/12/09/Obama_stimulus_plan_aims_to_boost
_digital_economy_1.htmlIn>

In pledging to "renew our information superhighway,"
<http://www.computerworld.com/action/inform.do?command=search&searchTerms=Ba
rack+Obama> President-elect Barack Obama has offered the broad outline of an
economic stimulus plan likely to lead to major increases in IT spending --
especially for broadband deployment and technology for schools and health
care.

Obama is mixing proposals that could offer a combination of gains, such as
short-term spending on equipment and longer-term investments aimed at
lasting productivity gains for the economy. The spending plan, outlined in
barebones detail in Obama's
<http://change.gov/newsroom/entry/the_key_parts_of_the_jobs_plan/> weekly
video address on Saturday, would mean new computers for schools, expanded
broadband access -- particularly in rural areas -- and funding on
technologies to reduce medical costs. That could mean increased spending on
networking technologies to support services such as telemedicine.

Obama hasn't yet put a price tag on his plan, but since his overall stimulus
package is expected to be in the hundreds of billions dollars, money for any
Internet-related initiatives could be large. But in spending big sums on
technology, the Obama administration will have to show that these tech
investment will deliver.
<http://www.computerworld.com/action/article.do?command=viewArticleBasic&art
icleId=281734> Linking the bottom line to IT investments is not an easy case
to make.

James Gabberty, a professor at Pace University's Seidenberg School of
Computer Science and Information Systems in New York, said that determining
the impact of tech spending on productivity is still difficult to measure.
There's no quantitative figure that shows, for instance, "the growth of a
nation's goods and services will be 'x' if you spend 'y' number of dollars
on hardware, software and communications gear," Gabberty said.

He pointed to the recent financial meltdown as an example. How is it, he
said, that among financial firms with similar growth rates, revenues per
employee and roughly equal amounts of IT spending some failED while others
did not. ''How can you have disparate yields?" Gabberty said.

But
<http://www.computerworld.com/action/inform.do?command=search&searchTerms=Ro
bert+Atkinson> Robert Atkinson , who heads the Information Technology and
Innovation Foundation (ITIF) in Washington and is also on the Obama
transition team, believes tech investments will stimulate the economy. While
many traditional economists focus on state and local government projects
such as building roads and bridges, "we need to expand our vision," he said.

Obama's plan will represent the first major stimulus effort since the
creation of a "digital economy," said Atkinson. As a result, the U.S. can't
afford to focus only on a "consumption-based [effort] that leaves the nation
with little to show after consumers spend the money and the economy gets
back on track," according to a paper published by the ITIF in October. The
ITIF argues that IT investments produce outsized productivity gains. More
immediate economic boosts are possible, as well. One step the ITIF
recommended to spur corporate technology purchases is to allow firms to
<http://www.computerworld.com/action/article.do?command=viewArticleBasic&art
icleId=9061839> write-off all such investments for tax purposes in 2009.

Broadband expansion is likely to get a big boost from the incoming
administration. Although the U.S. has some 75 million broadband users, it
has consistently
<http://www.computerworld.com/action/article.do?command=viewArticleBasic&art
icleId=9122720> ranked low on the list of industrialized countries for its
broadband adoption, both in terms of penetration and data transfer speeds.
Obama called the U.S. performance in broadband access "unacceptable."

The U.S. is ranked 15th out of 30 industrialized countries in terms of
broadband adoption, according to the European-based Economic Cooperation and
Development (OCED). And even though Internet access is considered essential
today, only about two-thirds of Americans have a computer at home, according
to the ITIF.

Atkinson said the U.S. could increase PC ownership through a program that
subsidizes the cost of computer purchases and Internet access. For the less
than $1 billion, the U.S. could help about 1.5 million households get on the
Internet, he said.

More PCs in U.S. households would boost broadband demand, as would programs
to extend networks to rural areas and tax incentives to encourage
investments by providers to boost the capability of their networks.

In terms of medicine, Obama wants to ensure that every doctor and hospital
"is using cutting-edge technology and electronic medical records so that we
can cut red tape, prevent medical mistakes and help save billions of dollars
each year."

The Arizona Telemedicine Program in Tucson, Ariz., is using technology to do
just that. For instance, it created a Teletrauma Service that allows trauma
specialists to deliver assistance to remote areas and medical facilities.
Using technology and cameras, these remote medical specialists can see a
patient's wounds and x-rays or a pediatric cardiologist could look at an
infant and decide whether it should be moved to a more specialized hospital
and whether a nurse is needed for transport, according to Dr. Ronald
Weinstein, who heads the program.

The telemedicine program has already saved lives and reduced costs by, in
some cases, eliminating the need to fly a patient to a hospital for
specialized care. "I think the impact, certainly in the cases where they
saved lives, are dramatic," Weinstein said.

He noted that the
<http://www.computerworld.com/action/inform.do?command=search&searchTerms=U.
S.+Department+of+Veterans+Affairs> Veterans Administration has been working
on a telemonitoring program for veterans, an area he said he would encourage
the Obama administration to continue to focus on. Cell phones can be used to
prompt patients to take medications, or deliver messages that meet a
patient's specific needs. Cell phones, in fact, are becoming "central to the
delivery" of medicine, Weinstein said.

John Gantz, a research analyst at IDC, said it's too early yet to know what
Obama's plans will mean in terms of new products and services, who's
targeted and how any benefits might be delivered. Incentives are likely to
be broad-based, he said, suggesting possibilities like tax breaks that could
be used to encourage homeowners to upgrade to intelligent thermostats to
help reduce energy use.

Gantz doesn't expect stimulus spending to target vendors. "The vendors have
cash -- it's not like they need money like banks and auto companies."

 <http://www.computerworld.com/index.jsp> Computerworld is an InfoWorld
affiliate.
Received on Tue Dec 9 23:14:28 2008