Politics, Business & Culture in the Americas

Economic Stimulus in the Digital Era

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With the scope of the recession looming larger with the release of each new gloomy statistic, talk of the New Deal-style package (and it’s potential scope) grows with it. But today in the digital age there’s a significant new component to stimulating the economy (including state investment in infrastructure that recalls the historic images of WPA). Today in the information economy it also means investment in digital infrastructure.

Although the U.S. invented the Internet and much of the soft and hardware that made it possible and led to its exponential growth it is now 15th in the world in access to high-speed Internet connections. In a recent speech President-elect Obama talked about his goal of getting every child connected to the Internet and promised to use a portion of the stimulus money to connect libraries and schools.

Indeed, in our knowledge-driven economy, pulling the U.S. economy out of the doldrums isn’t just bailing out the automakers —it’s looking to the engine of growth in our new economy. A large part of that is constructing the ribbons of digital highways on which information, knowledge and entertainment will travel. By doing so, we not only prime the pumps of our high-tech economy by spurring demand we also address one of the growing problems in our own educational system: the gap between those who have regular access to the Internet and those that don’t. (And thus the gap between those who have better paying, skilled jobs and those who will be left behind—which often skews against minority children, though may be improving among African American students.)

Latin American leaders themselves are now beginning to aggressively address this gap, not only between their countries and the more developed countries, but within their countries themselves. For countries south of the U.S. border breaking into the product cycle and converting their countries into targets for high-end investment and making themselves into high-tech exporters in their own right means bridging the digital divide. And many are doing this in collaboration with the private sector. One example is President of Uruguay, Tabare Vazquez’s CEIBA project that not only seek to provide lap top computers to all public school students, it will also train teachers and expand digital connection throughout the countries to make sure that the students have the cognitive and physical means to put the computers to use. (Full disclosure: this is the topic of the Spring issue of Americas Quarterly with an article by the fore-mentioned President Vazquez.) Similarly, Brazil under Lula’s government is attempting to distribute laptops to underprivileged children and expand Internet access to the school. Though, as with many of the Brazilian government’s efforts to gain a toehold and apply developments from the developed world, it is throwing its weight around to promote greater open-use software as a tool to expand access—and with success. And at a more regional level, Google and HSBC have teamed up to launch low-flying satellites in the region to provide Wifi access to rural, remote areas in Latin America.

Will all this work? Some will and some—despite all the good intentions—will not. Truth is, there are no easy fixes to the problem of the digital divide—and the solution links more to the intractable problems of poverty, poor education, poor infrastructure, and lack of opportunity, than it does to just mere access. But at the very (very) least it’s worth remembering what John Maynard Keynes said about hiring people to dig holes and fill them up again. In the end the work itself—while adding no productive value to the economy—is important for the stimulating ripple effects: it generates the need to buy shovels, overalls for the employees and employs the diggers.

But clearly investment in high-tech infrastructure and education is not just digging holes and filling them. It will yield real benefits. It will generate demand in one of the strongest sectors of our economy—a sector that will continue to grow exponentially, even if more slowly in these times. More important, investments in the infrastructure of the Internet to bridge the digital divide holds the promise of lifting children out of an accelerating vicious cycle. If the myriad projects in the U.S., Uruguay, Brazil and Argentina—to name only a few—succeed in providing a path for higher-skilled jobs for even a small fraction of the children, they will have fueled a longer-term growth curve.


Christopher Sabatini is the former editor-in-chief of Americas Quarterly and former senior director of policy at the Americas Society and Council of the Americas. His Twitter account is @ChrisSabatini

Tags: Brazil, Economic Stimulus, Vazquez
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