President Joe Biden’s proposed American Jobs plan takes a 21st century approach to infrastructure with funding for much more than roads and bridges. The $2.3 trillion plan includes funding for expanding broadband access, building a charging network for electric vehicles and job training to make sure there is a workforce to support these initiatives.
The plan also includes a significant chunk of money for research and development, which could help tech companies working on everything from clean energy to artificial intelligence. Biden plans to pay for the plan by increasing the corporate tax rate and removing tax benefits for fossil fuel companies. The next step in the process is for the proposal to be introduced in the House as a bill.
The $174 billion allocation for electric vehicle infrastructure is one of the biggest amounts in the proposal. High-speed broadband, the electricity grid and schools each get $100 billion. Domestic manufacturing, the National Science Foundation, supply chain support, and the semiconductor industry each get $50 billion.
Jain, director of West Monroe’s high tech and software practice, describes the plan as a potential boom for the tech industry thanks to the almost $280 billion allocated for R&D and broadband infrastructure.
“All of this investment will continue to spur innovation around leading edge technologies such as health IT, solar/energy, AI, communication infrastructure and software,” he said. “This incremental funding is in addition to the significant money that PE firms and VCs are also investing into these spaces.
Biden’s proposal includes $50 billion for the National Science Foundation to create a technology directorate that will focus on semiconductors and advanced computing, advanced communications technology, advanced energy technologies, and biotechnology. The plan includes $30 billion in additional funding for R&D to support innovation and job creation, including in rural areas. Brick-and-mortar labs would benefit from $40 billion for upgrades in equipment and computing capabilities and networks. Federal R&D agencies, including the Department of Energy, will distribute those funds, with half of the money reserved for historically Black colleges and universities and other minority-serving institutions, including the creation of a new national lab focused on climate that will be affiliated with an HBCU.
Here’s a look at how investments in broadband and electric vehicle infrastructure could benefit the tech industry.
Supporting the entire supply chain for electric vehicles
Biden’s American Jobs plan makes a $174 billion investment in electric vehicles and infrastructure. The funding covers automakers, domestic supply chains, factories and job training for workers. Consumers benefit also from point-of-sale rebates and tax incentives for buying American-made EVs. Grant and incentive programs for state and local governments and the private sector will support the construction of a national network of 500,000 EV chargers by 2030.
Matt Arcaro, a research manager for next generation auto and transportation at International Data Corporation, predicts that guidance, investment and leadership from the federal government will expand EV ownership throughout the country.
“I am encouraged that the framework looks at the challenge to scale and support EVs as complex and multi-faceted, including impacts to power generation, grid distribution and management, as well as vehicle charging infrastructure,” he said.
Paul DeCotis, a senior director in West Monroe’s energy practice, said that the $174 billion in funding for EV charging stations and production is a game changer.
“The funding will eliminate some of the barriers to EV adoption, like range anxiety, and further job creation in the automotive electric utility, and clean tech industries addressing climate change and the need for additional economic stimulus,” he said.
DeCotis predicts that the combination of new federal funding, existing financial and tax incentives available for states, and funding and programs supporting EV infrastructure development by utilities will drive a private-public partnership to expand EV use.
A national network of EV chargers is a key to widespread adoption of the vehicles. For example, the U.K. is installing about 7,000 charging stations per year and plans to spend billions of pounds over the next decade to build a network of stations across the country, according to the BBC.
Setting broadband goals
Biden’s proposal includes $100 billion for expanding internet access and sets ambitious targets for broadband coverage:
- Establish 100% coverage across the country
- Promote price transparency and competition
- Lower the cost of service
Mark Sami, a director in West Monroe’s technology practice, said that this funding will make it possible for more people to work from home as well as boosting connection speeds and reducing costs. Sami also thinks better broadband access will expand the hiring pool for tech companies.
“Skilled workers in rural areas with improved broadband could be just as attractive to employers as local counterparts,” he said.
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