Skip to main content

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
Labels:

Comments

Post a Comment

Popular posts from this blog

Time to be conservative with your 401K

Most of the posts I and other financial bloggers write are typically focused on individual stocks or ETFs and managing active portfolios. For those folks who are more conservative investors, those whose main investment vehicle is a 401K, for example, the techniques for portfolio management might be a little different. The news of stock markets falling and pundits predicting recession is disconcerting to professional investors as well as to those of us who are watching our balances in an IRA or 401K sag. What approach should the average 401K investor take? Let's assume that the investor is contributing on a regular basis to one of these retirement accounts. There are two questions that the investor needs to ask: 1. Should I stop putting the regular contribution into stocks? My feeling is that investors making regular contributions are being handed a present by the markets. Every week the market goes down, these investors are lowering their average cost. When markets reco...
7 comments
Read more

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation ...
4 comments
Read more

The Trouble with Trend Reversal Indicators

Many of us use various trend reversal indicators to time our trades. Our desire is to determine when prices have changed direction so that we can ride the new trend. Why doesn't it always work out? The first reason, of course, is that unforeseen events often drive prices in unexpected directions. That is something we can't change and it often makes all of us technical traders crazy. On the other hand, sometimes an unforeseen event is a prelude to a new trend. A stock spikes up on a what seems to be a one-time piece of good fortune and soon falls back. Does it start making its way back up or does it resume a previous down trend? The conflict within trend reversal indicators is that, though they can definitely tell when prices change direction, they suffer from two problems. One, they often can't determine how significant that move in prices actually will be. Two, they are often lagging indicators. As such, they can be late in providing a signal, sometimes leading the investo...
1 comment
Read more