Can technology save the economy?

David Rotman, Technology Review

The U.S. stimulus bill includes tens of billions to support energy and information technologies. It is intended both to create jobs immediately and to set the stage for long-term economic growth. So why are economists and innovation experts so skeptical?

By any measure, $100 billion is a staggering amount of money. That's how much the federal stimulus bill devotes to the discovery, development, and implementation of various technologies. Some $20 billion will fund the increased use of electronic medical records; another $7.2 billion will support the extension of broadband Internet access to areas currently without such services. Most impressive, roughly $60 billion will be spent on energy, funding everything from energy-efficiency programs to loan guarantees for the construction of large facilities that use new biofuel and solar technologies.

The spending is unprecedented, not only in scale, but also in the breadth of technologies it covers. For initiatives such as broadband deployment and incentives to adopt electronic medical records, the billions of dollars represent entirely new investments. And for energy technologies, the spending levels dwarf existing public and private investments. One big winner: the U.S. Department of Energy, which received $39 billion (in addition to its $25 billion annual budget). The DOE's Office of Energy Efficiency and Renewable Energy, whose budget in 2008 was $1.7 billion, alone was given $16.8 billion. By comparison, venture capitalists, who often claim clean tech as their favorite growth area, invested just $4.1 billion in that sector in 2008.

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