64. The multiplying effect of investments in new technology

I have seen several social media threads objecting to the proposed EU Recovery Plan on grounds that the funds are earmarked mainly for technology sectors related to the new economy, and it does therefore not help companies that suffered most directly from the pandemic. This reveals a misunderstanding of how the economy works. Rather than direct compensation and support (MEDE fund is for that purpose in any case, not the RF), funds given to new technology companies with the potential to dominate a growing sector multiply as these companies grow. Money is spent locally, through purchases and salaries, and reaches traditional business that way, in larger sums than the direct help. Can you imagine the amount Google employees spend at restaurants, shopping malls, car dealerships or cafes in Mountain View, or Microsoft employees in Seattle? More than direct help to restaurants, we need to grow our own next generation globally leading companies, and this is what the Recovery Fund aims to do 

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Comments

Sandra K. said…
I am very pleased to see that Europe is leading the way to ensuring life in a sustainable environment. I do expect other countries to follow.
SantiDominguezV said…
Sandra, i would agree with you in they had sensible governments. I do not have much expectation of what the Trump administration will do in US (a Biden administration would be much better from that perspective). China I think will quickly pivot to sustainability, they are geopolitically aggresive but i imagine they have no desire to destroy the World a week before they finally get to dominate it. India is a concern and Brasil of course with Jair in charge is a mess...

We need some changes to some of those governments if we are all going to align to prevent a catastrophe much greater than COVID

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