Wednesday, December 10, 2008

How does the Obama stimulus plan help tech?

Much has been written about the infrastructure aspects of Obama's stimulus plan. Clearly, fixing roads, federal buildings and schools will provide much needed work for construction workers suffering through a crash in the housing market.

The Obama team has, however, been shrewd enough to understand that a stimulus package for the nation needs to help a broad swath of industries. As a result, they have added a bit of high tech to their plans.

There are four main areas where tech is involved:

  • improve efficiency of the health care industry
  • modernize schools
  • develop a green economy
  • ease congested traffic
Let's look at each in turn and see how it benefits tech.

Improve efficiency of the health care industry --

This means software - software for creation and sharing of medical records between doctors, hospitals and insurance companies, software for managing prescriptions, software for tracking treatment regimens, etc.

At the heart of these systems there will be databases. That will favor companies like Oracle (ORCL), Microsoft (MSFT) and IBM. Software development could involve the same companies just listed as well a selection of companies more focused on the health care vertical such as Cerner (CERN), Eclisys (ECLP), McKesson (MCK), etc.

Modernize schools --

Installing high speed networks, broadband connections to the Internet and hanging more PCs and servers on these new networks will certainly generate business for companies like Cisco Systems (CSCO) as well as the PC companies like DELL and HP (HPQ). Going further back into the supply chain, this will also generate business for the semiconductor firms that supply these manufacturers. Software will be needed for all these PCs and servers and Microsoft (MSFT) is a likely beneficiary. Finally, there will be work for the local technicians who develop the system designs and perform the installation.

Develop a green economy --

Make public buildings more energy efficient - this mostly benefits the building trades and building materials industries but there may very well be engineering opportunities in improving on current materials and practices.

Develop, refine and deploy alternative energy sources - opportunities in this area range from deployment of wind farms to refinement of fuel cell and battery technologies to basic research on alternative energy sources we haven't even thought of yet. There is a range of companies that might benefit from these kinds of initiatives ranging from large caps like General Electric (GE) to smaller players like Fuel Cell Energy (FCEL) or even the currently out of favor solar stocks.

Ease Congested Traffic --

Creating “smart” highways that alert motorists to congestion and help re-route automobiles to keep traffic flow smooth will require sensors, computers, networks (most likely wireless) and electronic displays. This should create work for electronics and software engineers as well as the technicians responsible installation and testing.

There are suggestions that light rail mass transit could play a part. This would benefit workers ranging from steel company employees to software engineers.

Conclusion --

The goals embodied in the objectives of the Obama team will help support a reasonable cross section of tech companies at a time when they need it. And the goals are worthwhile and beneficial to the U.S.

Whether these initiatives will be enough to absorb all the tech workers being laid off by Hewlett Packard, for example, or all the IT workers losing their jobs at financial companies remains to be seen. Nevertheless, it appears that government support should translate into some new jobs but also into preservation of many existing tech jobs that might easily be at risk. Preventing job losses is no small benefit in the current economy.

As long as politics don't derail these initiatives and as long as the funds are available, tech should enjoy some support in the Obama administration.

Disclosure: none



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