Info-tech = recovery

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In testimony before Congress’s Joint Economic Committee today, Fed chairman Ben Bernanke noted that

In contrast to the somewhat better news in the household sector, the available indicators of business investment remain extremely weak.

But it is these key business sectors that are most important for a U.S. — and global — economic recovery. As important as stabilization of the housing sector is, we are not going to be led out of the recession by another housing boom. Nor should we desire that. We need real productivity-enhancing innovation, which is largely enabled by non-real estate investment and entrepreneurship.

Among the myriad policy actions being taken in Washington this year is a potential overhaul of our communications strategy, under the aegis of the FCC’s new Broadband “Notice of Inquiry.” The first goal of this plan should be to to encourage the continued investment in leading-edge information technologies. Broadband communications especially makes all our businesses in every sector more productive and also connects an ever larger number of citizens, especially those who may be struggling the most in this tough economy, to the wider world, improving their prospects for education, health, and new jobs in emerging industries.

Information and communications technology (ICT) accounts for an astounding 43% of non-structure U.S. capital investment, totaling $455 billion 2008. In this new FCC communications policy review, we should do everything possible to keep this huge source of American growth rolling. Any policy obstacles thrown into the path of our information industries would not only reduce this crucial component of absolute capital investment, which is already under strain, but also diminish and delay all the positive cascading follow-on effects of a more networked workforce and world.

Jack Kemp, 1935-2009

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I have a photo of my father from around 1982, standing on the tarmac of South Bend airport with Jack Kemp. The economy was in the tank, and America’s world standing was uncertain. My Dad had gone to pick up Kemp, who was to speak at an event for his fellow Republican, Jack Hiler, who was our friend and congressman from northern Indiana. I was maybe eight years old at the time. We were Reagan-Kemp-Hiler conservatives, interested in entrepreneurship, economic growth, and a muscular but prudent international stance.

Some 15 years later I would go to work for Kemp as an economic analyst. It was not preordained, but neither was it a complete coincidence, I suppose, that I spent several years working for the man who, more than any other public official, had articulated and even helped shape my, and my family’s, worldview. Kemp and I even shared the same birthday, July 13.

It is difficult to overestimate Kemp’s impact on history. For those who don’t grasp the importance of economics in politics and geostrategy, that will seem a wild overstatement. But I do think Kemp changed the arc of human events by helping to launch the U.S. on a much higher growth trajectory. Read the rest of this post »

Creating the broadband future

admin Tech Note

Lots of commentators continue to misinterpret the research I and others have done on Internet traffic and its interplay with network infrastructure investment and communications policy.

I think that new video applications require lots more bandwidth — and, equally or even more important, that more bandwidth drives creative new applications. Two sides of the innovation coin. And I think investment friendly policies are necessary both to encourage deployment of new wireline and wireless broadband and also boost innovative new applications and services for consumers and businesses.

But this article, as one of many examples, mis-summarizes my view. It uses scary words like “apocalypse,” “catastrophe,” and, well, “scare mongering,” to describe my optimistic anticipation of an exaflood of Internet innovations coming our way. I don’t think that

the world will simply run out of bandwidth and we’ll all be weeping over our clogged tubes.

Not unless we block the expansion of new network capacity and capability. Read the rest of this entry »