Electronic Design

It's A New Year—With A Fresh Chance To Recover

As the first month of the new year draws to a close, there are good reasons to believe that the economy will be rekindled, restoring the high-tech industries to their former glory. New yet reduced budgets have been approved, lifestyle routines are falling back into place, and hopefully some of last year's tragic events can move off center stage. Yes, life goes on—new IPOs get issued, stock options become exercised, and new, better products undergo design.

The economy faces enormous challenges to get back on track. A smart choice for a strong economic stimulus would be infrastructure investment. Infrastructure, however, represents an expensive long-term investment that may not yield a positive cash flow for many years. In last year's tough business climate, many infrastructure improvements were pushed off, and many companies that invested in infrastructure reported that their short-term profits were nonexistent.

There are many opinions for which sector of the electronics industry would be the best choice of infrastructure investment. Although I don't have a crystal ball, my intuition leans toward communications. Investing in the communications infrastructure improves the ability to do business and opens up many new opportunities for personal enrichment, entertainment, and services.

Today's society depends on the ability to communicate via telephone, fax, e-mail, and video conferencing, so any disruption significantly affects the economy. We have already witnessed the negative economic effects and lost productivity that result whenever a software virus or worm propagates itself to many users.

Unquestionably, long-term investments must be made. We're now on the verge of so-called third-generation cell phones, but hardware development and deployment have been pushed off to extract every bit of profit from existing equipment. It's time to either commit to the new technology, or risk falling behind other countries in this market.

The Internet infrastructure also needs beefing up. Faster servers, higher-speed data transfers, improved connectivity—especially in the so-called last mile—and ubiquitous broadband connectivity should be the goals. Once these up-grades are in place, many services and value-added features can be sold to recover the investment.

When high-bandwidth connections are widely available, the Web will spring to life, plus many Web-based services and entertainment options can further spark the economy. Movies, music, video e-mail conferencing, telemedicine, and more will be at our fingertips. These capabilities will extend into other markets and boost the economy.

Low interest rates are a good start to reduce the cost of investing in infrastructure. But perhaps the government should become more involved in financing the infrastructure. How much more? Tell me the role you think government should play.

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