Sandy's Election Week Warning: Utilize Technology, Improve Infrastructure To Mitigate Damage

by: Diane Mermigas

The devastation wreaked by Super Storm Sandy - and our struggle responding to it - provide brutal reminders of the importance of putting technology to work and tending to infrastructure which will generate much-needed new jobs and revenues.

While it is impossible to manage the unpredictable impact of a natural disaster, improving infrastructure and internal systems at every level and using technology to monitor and provide services can mitigate some of the physical, economic and personal toll heightened by this week's national election with another potentially destructive storm on the way.

For instance, replacing our outdated airline system with digital satellite technology would result in critical operational and cost efficiencies, some of which would have mattered in the wake of nearly 20,000 flight cancellations, according to Marion Blakey, of the Aerospace Industries Assoc.

Similar assertions have been echoed across the spectrum of this latest disaster experience -- from century-old transit systems and inadequate power grids to insufficient water and gasoline management - all complicated by what has become an extreme weather norm.

Ironically, just days before the super storm made landfall, these concerns were mentioned against the backdrop of America's fiscal and economic problems, in a presentation by Mary Meeker, a former Morgan Stanley Internet analyst turned venture capitalist at Kleiner Perkins Caufield & Byers.

In an update to her annual assessment of U.S.A. Inc., evaluating the country's prospects as if it was a failing, flagellating corporation, Meeker argues that trends, events and data points underscore an urgent need to "reorganize" U.S.A. Inc. Mobile connectivity and digital technology can be catalysts for improving infrastructure and systems, while creating jobs and generating new wealth.

It is a clarion call that no longer can be ignored.

The enormous wealth destruction caused by Super Storm Sandy exacerbates the national fiscal crisis created by high unemployment, exorbitant debt, dangerous cutbacks and failure to upgrade aging internal systems.

In the storm's aftermath, Meeker was quick to shift her focus from the stunning changes leisure-time, entertainment and commerce noted in her 2012 Internet Trends report to more critical innovation and advancements required in the country's most fundamental public services and safety systems.

Every company, organization and government agency should be focused on ways to use technology to "re-imagine" what we must and can do better in America to protect and improve the quality of life. It will take a village of private-public collaboration.

"Innovation is alive and well in Silicon Valley. Young entrepreneurs are reimagining the things we have known for many years reconstructed and rebuilt using the Internet, using mobile phones and using applications," Meeker said in a CNBC interview Nov. 1.

The rigorous public use of social media and mobile connectivity throughout the storm-related chaos points to a vital tech system ready to be mined for new, better ideas. The pledge by companies such as Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) to rewire the way people access, share and use information should be pushed beyond the profit motive to support the public interest.

That mandate should be embraced by every company, regardless of size and scope -broadcasters, cable operators and Internet service providers - familiar with and invested in local public service as well as commerce.

"Mobile connectivity is growing very rapidly. There are 5 billion mobile phone users in the world, only 1 billion of which are smartphones users, so the growth there will be strong for a long time," Meeker said.

While Meeker's latest iteration of U.S.A. Inc. drills down on the need for U.S.A.'s financial turnaround, she returns to the key point: There is almost nothing wrong with the U.S. economy and well being that can't be fixed by a more enterprising application of technology. Advances in technology-particularly in areas such as public services and safety-- will drive demand and costs, Meeker says.

Investments in technology, infrastructure and education boost productivity which, like employment growth, accounts for half of long-term real GDP growth.

Although technology, infrastructure and education investments drove 90% of labor productivity growth from 1977 to 2000, U.S.A. Inc. has increasingly allocated resources away from productive technology, infrastructure and education investment in favor of less productive entitlement program spending through 2009, Meeker reports.

U.S.A. Inc. also has steadily scaled back investment in technology R&D since the 1960s, relying on private industry has picked up much of the slack. Although 2% of companies accounted for nearly 100% of net wealth creation of the 1,720 tech IPOs in the U.S.A., 1980 to 2002, a poor economy is now straining businesses, while the country's fiscal and infrastructure state grow more dire.

Within 15 years, the government will be helpless to respond to those needs when its entitlement spending and interest expenses exceed its revenues, according to the Congressional Budget Office.

The bottom line, Meeker says, is that newer technology and improved infrastructure will translate into increased efficiency and lower costs over time. In the shadow of Sandy's lingering distress, this should be a no-brainer.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.