Rob Atkinson
President, Information Technology and Innovation Foundation

What can a $30-billion investment in digital infrastructure do to strengthen the struggling economy? The Information Technology and Innovation Foundation has offered an answer with the “The Digital Road to Recovery: A Stimulus Plan to Create Jobs, Boost Productivity and Revitalize America.” The report found that investing $30 billion in America’s digital infrastructure can create 949,000 jobs and have a more enduring impact on our economic future than simply spurring consumer spending through stimulus checks, or even investing in traditional physical infrastructure.

The rationale behind these findings is three-fold. First, in the immediate short-term (one year), a $30-billion investment will create or retain 949,000 American jobs for broadband network deployment, health IT services and smart power grid creation. Most of the employment comes from three areas: direct, indirect and induced jobs. The report uses the example of investment in broadband networks. Direct jobs are those created by new spending, such as network technicians. Indirect jobs are those created to supply the materials necessary to production, such as fiber cables or circuit boards. Induced jobs are those created by these new paychecks being spent at local stores or restaurants, stimulating the economy. An added benefit is that IT jobs €”from telecommunications line installers, to software engineers, to electric utility workers €”are generally higher-skill, high-paying jobs.

Second, investment in digital infrastructure will create a “network effect” that will lead to the creation of a whole host of new jobs in related industries enabled by the new digital infrastructure. So, for example, creating a smart grid will spur more demand (and new jobs) for technologies like smart appliances, plug-in hybrid electric vehicles, and residential solar panels. There aren’t very many other industries in the U.S. that can claim those kind of real-world results.

Finally, investments in America’s digital infrastructure will lead to higher productivity, increased competitiveness and improved quality of life. For example, investing in health IT will lead to better patient safety, improved quality of care and lower health care costs. Moreover, these new, highly advanced information networks will create a domestic market that will ensure U.S. firms can compete at the highest level, while enabling them to become chief exporters of this technology.

Much discussion and debate is currently taking place regarding the stimulus package, and how that money would best be partitioned. While physical infrastructure is important to both the creation of jobs and the sustainability of a working transportation network, this report has found that investment in digital infrastructure is equally if not more important for our short and long-term economic goals.

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