Tackling the Budget Cut Challenge: Five Tools to Enhance Economic Growth

OMB Director Jack Lew’s August 17 call for agencies to identify investments to “double-down” on to enhance economic growth struck a familiar chord for the CGI Initiative. In 2008 and 2009, we commissioned three separate studies focused on ways the government can spark job creation, specifically in the area of information technology:

 

 

These reports each offered ideas and recommendations for investments that build the potential for sustainable, high-quality jobs in the information technology industry, especially in rural and disadvantaged areas.

Today, I want to highlight specific ideas from Dr. Salamon’s report. His proposal for a National Technology Initiative described five tools of government that leaders can consider to enhance economic growth – tax expenditures, grants, procurement set-asides, loans (direct and guaranteed), and vouchers. Dr. Salamon summarized these key potential tools and their respective advantages and disadvantages.  Taken alone, these descriptions can be helpful to federal leaders as a framework for identifying and assessing potential “double down” investments in their agencies.

To read more on Dr. Salamon’s key potential tools, click here.

Most interestingly, Dr. Salamon offered an approach to apply these tools as a coordinated combination to spark economic growth specifically in the information technology sector. His research highlights how multiple tools of government can be applied in combination to have an increased impact by “filling the integration gap.”

“A dizzying array of programs embodying a wide variety of tools is already potentially available to promote the goal of stimulating competitive information technology businesses in underdeveloped regions of the U.S.,” writes Salamon. “Few of these tools are specifically targeted on this particular purpose, however. What is more, the various programs and tools are scattered among a plethora of agencies and are consequently difficult to assemble in support of priority national objectives. This makes the creation of integrative mechanisms one of the highest priorities for gaining the full advantage of the promise these programs and tools hold.”

Dr. Salamon recommends a National Technology Initiative to integrate the tools of government to spark high-quality information technology jobs in rural and economically disadvantaged communities. This proposal is especially interesting because it would achieve multiple benefits:

  1. Creating high-quality jobs for individuals in areas of the United States that are most hard hit by the economic downturn
  2. Establishing long-term anchor jobs that spur corollary job growth in communities
  3. Increasing our nation’s pool of domestic IT talent as a national resource to keep U.S. oversight and control of sensitive IT infrastructures, data, and software – a national security imperative identified by such groups as the National Academy of Sciences and the Defense Sciences Board.

As agency leaders develop their responses to Director Lew’s call to prioritize investments to enhance economic growth, Dr. Salamon’s recommendations can offer helpful guidance on ways to not only bring core jobs back to rural areas suffering chronic job losses in agriculture, mining, and manufacturing, but also to meet and thwart ever-increasing threats to our nation’s cybersecurity.

Disclaimer: The postings on this site are the opinions of the individual author, and do not necessarily represent CGI's strategies, views, or opinions. CGI expressly disclaims all liability for actions taken or not taken based on the content of this blog.

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