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Tech Stocks

The Next Technology Boom: Why Innovation Will Blast Us Out of the Recession

As I mentioned briefly in this column a couple of days ago, the next technology boom is upon us.

It’s one borne out of the shift to 4G broadband – and it’s a catalyst that could help lead the United States economy out of recession.

The development is significant because it gives companies an opportunity to perfect previous products, while rolling out enhanced innovations. The improved technologies will also allow for faster processing and expanded capabilities for PCs, notebooks and handheld electronics, along with further customizations and upgrades.

With new gadgets set to hit stores over the next few weeks and 235 million new smartphones coming to the market in 2010, this could result in more jobs. Keep in mind that innovation is the primary driver of economic growth in today’s knowledge-based economy. It opens up new fields of jobs in manufacturing, service, and management.

Although innovation has suffered over the past year, as companies have focused on cost-cutting (for more on this, check out Robert Williams’s analysis), the future looks bright.

From the March 9 bottom, technology sector shares jumped about 70%, compared with 60% for the broader S&P 500. And forecasts show that telecom, software and the technology hardware areas are all expected to rise over the next two years, with software enjoying an 85% jump in 2010.

Spurring this demand is venture capital. In fact, venture capitalists poured enough money into software development over the past quarter to make it the third-highest recipient of venture capital.

As we head into 2010, the sector clearly has plenty of investment appeal. I’ll detail specific opportunities in future columns.

Sheena Martin

*The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Wall Street analysts.


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