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IT Group Urges Government To Bolster Industry

TechAmerica says the federal government needs to update policy, extend tax credits, and invest in cybersecurity to pull the technology industry out of the recession.
The technology industry began to feel the effects of the recession in 2009 and is in need of government policy to get it back on track, according to a report released Wednesday by industry group TechAmerica.

While the tech industry was one of the last in the private sector to be negatively impacted by the recession, the industry lost 245,600 jobs last year, according to TechAmerica's 13th annual Cyberstates report. The pace of job loss slowed over the year, however, and the industry still employs 5.9 million workers.

"The industry held on longer and stronger, but finally started seeing losses in 2009," said Phil Bond, TechAmerica's president and CEO, in a press conference about the report Tuesday.

The report details national and state trends in high-tech employment, wages, and other economic factors, and covers the 50 U.S. states, the District of Columbia, and Puerto Rico.

Every high-tech sector lost jobs in 2009, according to the report. Of the 245,600 jobs lost, 112,600 were in manufacturing, which was most negatively impacted.

Space and defense systems manufacturing was least affected, losing 1,200 jobs. Engineering and tech services lost 59,000 jobs, while communications services lost 53,000 jobs.

Software services lost 20,700 jobs overall but saw an increase of 10,100 jobs in the fourth quarter, according to the report. Bond said that while the tech industry was the last into the recession, it may also be the first out, buoyed by the strength of the software/services sector.

To help support this growth, there are some simple steps the government can take to help the industry get back on track, he said.

Overall, Bond said that policy makers are still talking about the importance of innovation and technology more than they are actually creating policies and laws to support it.

One thing policy makers should do right away is renew the research and development tax credit, which legislators failed to do during the recession, and then to give it up-do-date-enhancements, he said.

As the credit is nearly 30 years old, "it's far from perfect," Bond said. "But it is all that we have at the present moment and even that rickety old credit according to our analysis is good to support over 100,000 jobs."

Bond said the Senate soon plans to take up a one-year extension of the tax credit, a move that is "grievously overdue."

TechAmerica also is calling for lawmakers to renew the bipartisan America Competes Act, which was enacted in 2007 to spur technology innovation and R&D by increasing funding for organizations like the National Institute of Standards and Technology and the National Science Foundation. The act also called for NASA to increase its funding to support and participate in these activities.

Policymakers also have been dragging their feet on cybersecurity, Bond said, and TechAmerica is calling for Congress to pass a comprehensive cybersecurity act before the end of the current session.

There are about a dozen cybersecurity bills being bandied about the House and Senate currently, he said, but "those bills in their approaches are not quite right."

TechAmerica is committed to pushing the effort forward to pass cybersecurity legislation that is long overdue, Bond said.

TechAmerica also is calling for the federal government to modernize the healthcare industry through technology and to pass a national broadband strategy, efforts that also would lift the overall IT industry, he added.