Tech Sector Could Star In US Economic Salvation

As USC professor Jon Taplin sees it, the government needs more than legislation. It needs a national policy designed to allow information technology companies and energy technology companies to power our economic recovery to address the US financial crisis. "Just recapitalizing the banks is not going to revive the economy," said Taplin. "The economy is going to have to be spurred to be a much more production-oriented economy, rather than a consumer-oriented economy. Seventy two percent of our economy is based on people going to the mall. That's not a competitive situation when you have a Chinese economy in which 65% of the economy is based on producing real stuff." As Taplin sees it, the government has to help direct private sector innovation through investment. "The government is going to have to spur extraordinary levels of spending, as they did in the '30s, and the smartest, most efficient ways to do that would be to make sure we have universal broadband, spending on energy technologies, and alternative technologies," he said. "The way out of the crisis will be, I think, a very large investment program built by the government, based on leadership in IT and ET." Taplin expects that the recovery will be traumatic and painful. "There are going to be a lot of empty shopping malls," he said. "But coming out of that on the other side, becoming once again the world leader in technology could be an exciting thing. We did it once before in the '60s and '70s when the IT revolution started, and it was the government, through DARPA, that provided the money to get it going. The Internet wouldn't exist if it wasn't for government spending."