As nations struggle to respond to the economic crisis caused by COVID-19, many are rightly considering public investment as a tool for recovery. Historically, the focus of government fiscal policy in times of economic downturn has been on questions of ensuring that the provisions are timely (e.g., take effect while the economy is still in a slump), targeted (focused on activities that have relatively high economic multipliers), and temporary (expire when the slowdown is over).
Rob Atkinson explains in Tagesspiegel why we should add a fourth “T” to our response: transformation. It is equally important to ask whether some of these measures cannot also boost investments and spur growth and innovation long after the initial spending has done its work.
COVID-19 has imposed terrible health and economic costs on the world. But if governments invest wisely in technology and innovation in response, they can help move their economies and societies forward. We have the unique opportunity to promote inclusive and universal access to digital infrastructure, invest in clean energy innovation, and create a more resilient labor force.