US Investment in IT Would Create Jobs, Group Says

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A US$30 billion investment by the U.S. government in broadband, health IT and smart energy grids would create or retain nearly a million jobs, according to a new report from a Washington, D.C., think tank.

A U.S. government economic stimulus package should include money in those three areas, with benefits extending beyond new jobs, the Information Technology and Innovation Foundation (ITIF) said in a report published Wednesday. Investments in health IT will improve the quality of health care, and a so-called smart energy grid would be able to collect information on a customer's energy use, resulting in conservation, and allow homeowners and business to sell excess energy generated by solar panels, the report said.

Investment in broadband could improve U.S. productivity and create new business opportunities in places that don't yet have broadband options, the report said.

"Spurring investment in our nation's infrastructure is an effective strategy for getting Americans back to work during an economic downturn, particularly one that is expected to be longer than normal in duration," the report says. "Although projects to improve the country's traditional physical infrastructure are necessary and important, investments in certain parts of our national information technology infrastructure -- America's digital infrastructure -- will have a greater positive impact on jobs, productivity, and innovation."

The report pinpoints the number of new or retained jobs from a $30 billion government at 949,000. "The second reason to do this ... is the competitive issue," said Robert Atkinson, report co-author and ITIF president. "It's clear that in the next decade, there are going to be countries all around the world that are going to be investing more in broadband, in telecom, more in health IT and more in smart electric grids. If we invest first, if we get out there first, our companies will gain significant technical capabilities, economies of scale, that they can leverage on the world scene."

U.S. President-elect Barack Obama has called for the U.S. Congress to include broadband rollout, health IT and alternative energy technologies in a huge economic stimulus package.

Several audience members at a Wednesday forum on the report praised ITIF, saying U.S. investment in all three industries is needed. But one audience member suggested it may be difficult for the U.S. government to account for $10 billion in broadband spending if it happened all in one year.

The $30 billion figure is just a number ITIF used to generate the report; the U.S. government could invest more in the three technologies, Atkinson said. In all three industries, the government should provide a mix of significant tax breaks and grants to companies providing the services, the ITIF report recommended.

"We're not saying $10 billion is the right number," Atkinson said. "Actually for work I did for the [Obama] transition team, we came with a plan, and we said it was actually more like $12 billion to $15 billion."

In December, Free Press, a media reform advocacy group, called for the U.S. government to spend $44 billion over three years to improve broadband, although its plan differed significantly from the ITIF's. At the heart of the Free Press plan is a new broadband fund that would target rural and other underserved areas, with funding only going to services providing at least 5Mbps of broadband. Atkinson, in a blog post at the Huffington Post, criticized the Free Press plan, saying it would create a slow-moving government bureaucracy that would take years to produce results.

In turn, Craig Aaron, Free Press' communications director, wrote that the ITIF plan advocates "spending your tax dollars on a massive giveaway to the biggest phone and cable companies -- with zero accountability."

"The ITIF plan -- which doesn't distinguish between dollars spent on high-speed Internet deployment and other capital expenditures -- would permit companies like AT&T, Verizon and Comcast to spend less on broadband and use the tax credits to fund other projects, like anti-consumer snooping technologies that allow ISPs to interfere with your Web browsing," Aaron said.

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