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Stimulus may lift high-tech in N.E.
Firms well placed to benefit from $37b digital upgrade.

By Hiawatha Bray
Globe Staff / January 28, 2009
The vast economic stimulus package now making its way through Congress could bring a Of $825 billion in federal spending proposed by the House of Representatives, at least $37 billion will go to projects aimed at upgrading the nation's digital infrastructure. Lawmakers want to spend $20 billion to digitize Americans' medical records, another $11 million for "smart grid" projects to computerize the nation's electrical grid, and $6 billion to deliver broadband Internet access to every citizen.
Far more will be spent on relatively low-tech infrastructure projects, like building roads and bridges, but even those activities require much supporting digital hardware and software. And Massachusetts has a host of companies, large and small, that are well positioned to cash in on the need.
The stimulus plan "really is expanding the markets for the kinds of technology products and services that Massachusetts companies are very involved with," said Greg Bialecki, undersecretary of the Massachusetts Department of Business Development.
Local companies are especially keen on the proposed medical records upgrade. "Everyone feels that an investment in health IT [information technology] can only drive down costs, improve care, and save lives," said Chris Goode, vice president for global corporate affairs at EMC Corp. in Hopkinton. As the world's leading maker of high-end data storage hardware and software, EMC could generate big revenues from an upgrade in medical recordkeeping. Goode said his company's sales teams for the healthcare industry and state and local governments are already on alert for stimulus-related opportunities. "They're developing a strategy to go after those customers," he said.
Todd Cozzens, the chief executive of Picis Inc. in Wakefield, is also counting on a stimulus boost. Privately held Picis, which had revenues of $125 million in 2008, makes software that documents activities in hospital intensive care wards and emergency rooms. "This is a positive step," Cozzens said of the stimulus plan. "By giving more money to hospitals to adopt IT as a way to improve performance, we think that'll encourage more hospitals . . . to use IT systems," Cozzens said.
Proposed federal aid for electrical network upgrades will include $4.5 billion for a "smart grid" program that will use computers and new energy storage technologies to distribute power more reliably and with less waste.
"We're certainly optimistic about that," said Bill Capp, the president of Beacon Power Corp. in Tyngsborough. His company makes giant flywheels that temporarily store electric power, then feed it back into the grid to smooth out fluctuations.
Beacon hasn't turned a profit since its founding in 1997, but the company recently began a pilot program with utilities in New England, and is awaiting final regulatory approval for a larger facility in Stephentown, N.Y. The stimulus plan could lead to still more Beacon Power installations. Capp said his company's flywheels make it easier to combine the steady output of traditional power plants with intermittent power sources like windmills and solar power stations. "Our technology could certainly be considered part of the whole smart grid portfolio," he said.
And projects such as road and bridge work will require digital hardware and software support. Some firms, like Parametric Technology Corp. of Needham, are betting that infrastructure dollars will eventually trickle down to them. Parametric, which generated $1 billion in revenue in its 2008 fiscal year, makes product development software for manufacturers. For example, Deere & Co., a major producer of earthmoving equipment, uses Parametric software to design its products. "They may need more of our products if they benefit from this spending," said Neil Moses, Parametric's chief financial officer.
But Chris Anderson, the president of the Massachusetts High Tech Council, said there's a risk that the money won't be wisely spent. "I think there's a general concern . . . about the magnitude of the spending and about the fact that a good deal of it is left to elected officials to figure out how to dole out," Anderson said.
Citing the billions in federal funds given to states for homeland security programs in the aftermath of the 2001 terrorist attacks, Anderson said, "There was very little measurable efficient return on that investment. Garbage trucks were purchased with that money in certain municipalities."
Anderson said that before the federal stimulus money is doled out to the states, Massachusetts Governor Deval L. Patrick should establish clear guidelines about how the funds will be spent here.
Hiawatha Bray can be reached at [e-mail].

http://www.boston.com/business/technology/articles/2009/01/28/stimulus_may_lift_high_tech_in_ne/