February 12th, 2009

Tech will see direct, indirect benefits from stimulus plan

Posted by Sam Diaz @ 5:24 am

I have to say that I’m very impressed with Washington these past couple of days. In just about 24 hours, the House and the Senate were able to reach an agreement on a massive economic stimulus plan, now tagged at more than $789 billion. That’s no small task. And now, it’s believed that a bill could reach the President’s desk within days.

The details of the bill still hadn’t been released late Wednesday, as there was expected to be some last-minute tweaks going on into the night. Still, that that didn’t stop bill-watchers from immediately speculating about what was saved and what was axed.

It’s easy to Monday morning quarterback for your own cause and question the details, the loopholes and, of course, the distribution of funds in this bill. The tech industry is no different. Already, there are those who are criticizing the plan’s investment in tech as being too complex or favoring big corporations over small businesses. But others note that the tech industry - no matter how the dollars and tax breaks are settled in the end - comes out a winner with this bill.

Consider this excerpt from the New York Times:

To many on K Street, the stimulus bill was the clearest guide to the new administration’s closest friends in the business world. What oil was to President Bush, some say, clean energy and technology are to the Obama White House. “We have a president who gets it,” said Dean Garfield, the president of the Information Technology Industry Council.

In the Senate version of the bill, about $7 billion was allocated for expanding broadband access into rural and underserved areas, $20 billion for a “smart grid power network” and $20 billion to digitize health records. It’s still not clear how the compromise between the House and the Senate will impact those allocations, though.

But let’s put those investments to the side for a minute. Those are the ones that are getting all of the attention. But there are plenty of other parts of this bill that will have a ripple effect on the tech industry - from manufacturing jobs to hardware sales to service contracts. Some of those line items, taken from the Senate’s version, include:

• $20 billion, including $14 billion for K-12 and $6 billion for higher education, for renovation and modernization, including technology upgrades and energy efficiency improvements.
• $1 billion for 21st century classrooms, including computer and science labs and teacher technology training.
• $550 million to modernize aging hospitals and make healthcare technology upgrades at Indian Health Service Facilities.
• $400 million to replace the 30-year-old Social Security Administration’s National Computer Center.
• $245 million for “critical IT improvements” to the Farm Service Agency’s systems.
• $276 million to upgrade and modernize information technology platforms for the State Department to meet post-9/11 security requirements.

Let’s not fool ourselves. This injection of funds will help get things kick-started but it won’t solve all of the problems. For an industry like tech, there’s a real opportunity to maximize the ROI by taking advantage of cutting-edge technologies that enterprise operations are looking into as a means of overall cost savings.

What will be the role of cloud computing in the 21st Century classroom? Will the SSA’s new National Computer Center take advantage of SaaS offerings? How many of the healthcare upgrades will take utilize portable WiFi-enabled devices? Is there a virtualization plan in place for those “critical IT improvements?”

It was the job of Congress and the administration to free those federal funds. From here on out, the job is all of ours. We need to make sure that the government has a firm understanding of the latest technological breakthroughs and knows how to take advantage of tech to operate more efficiently.

For the longest time, Silicon Valley wanted some respect and attention in Washington. That day has finally come. Now, it’s time for the tech industry to step up to the plate and prove to this country that an investment in tech can go a long way.