Economy Core - DDI 2015 SWS

Econ Generic DDI 15
Growth Bad
Growth Unsustainable
1NC
Growth rates are unsustainable we are exceeding the earths biophysical limits
Klitgaar and Krall 11 (Kent A. Klitgaard, , Lisi Krall, ,Ecological economics, degrowth, and institutional change, 12/12/2011,
Ecological Economics journal issue no. 84 pages 247-248, www.elsevier.com/ locate/ecolecon, DJE)
The age of economic growth is coming to an end. The mature economies of the industrial North have
already entered the initial stages of the era of degrowth. This is evidenced by data that show overall
economic activity has increased at a decreasing rate since the Golden Age of 1960s postwar capitalism turned
into the era of stagflation in the 1970s. Despite the supposed revival of growth in the neoliberal age, percentage
growth rates have continued their secular decline. In the United States real GDP growth was lower in
the1980s and 1990s than in the 1970s and lower still in the first years of the 21st century (Tables 1). While
percentage growth rates may have declined over the last five decades the absolute size of the economy, as measured by real gross
domestic product (for all its flaws) has increased, more than tripling from 1970 until 2011. This creates a dilemma within our present
institutional context. Absolute growth, which uses more resources, especially fossil fuel resources, destroys
more habitat, and emits more carbon and other pollutants into the planet's sinks, has grown
exponentially. At the same time, relative, or percentage growth, upon which employment depends, has fluctuated
over the same decades and shows a downward trend. We are growing too fast to remain within the limits of the biophysical
system. At the same time the world economy is growing too slowly to provide sufficient employment and there appears to be a secular
decline at work. Despite rapid and sustained rates of economic growth in many newly emerging market economies
(e.g. Brazil, India and China) patterns of declining growth rates also exist for the world economy (Table 2). The
reduction in the long-term growth rates, especially for mature market economies, is not something we must contend with in
the distant future. They have been occurring for decades. Neither are they simply the result of misguided policy, as growth
rates have fallen in times of both liberal and conservative policy regimes. Rather, we believe the growth rate decline is
embedded deeply within the institutional structure of the economy, as well as within biophysical limits.
Clearly a better understanding of the complex dynamics of the interactions of the economic and biophysical systems is needed to
provide important insights for the degrowth and steady-state agendas. While ecological economics has addressed ecological limits, it
has not explored as fully the limits to growth inherent in a market system. The analysis of biophysical limits has been the strength of
ecological economics. Beginning with the work of Herman Daly, who placed the economy within the context of a finite and non-
growing biophysical system, through the first 1997 text by Robert Costanza and colleagues, ecological economists have
carefully delineated limits such as the climate change, the human appropriation of the products of
photosynthesis, and biodiversity loss (Costanza et al., 1997). Subsequent analyses by Rees and Wackernagel showed
that the human ecological footprint now exceeds the earth's biocapacity, and the Limits to Growth studies by
Meadows et al. concluded that human activity has overshot the carrying capacity and the scale of human
activity is unlikely to be maintained into the next century. The work of many energy analysts (Campbell, 2005;
Campbell and Laherrere, 1998; Deffeyes, 2001; Hall and Klitgaard, 2011; Hallock et al., 2004; Heinberg, 2005; Simmons, 2006)
concludes that we are at or near the global peak of fossil hydrocarbons and future economic activity will be
impacted strongly by more expensive and less available petroleum. The second set of limits is internal and is to be
found in the dynamics of the accumulation process, involving the complex structural interaction of production, consumption, and
distribution. The internal limits that gear the economy toward both cyclical variation and secular stagnation have not been considered
systematically by ecological economists. When the economy reached these limits historically the result has been a series of periodic
recessions and depressions. Renewed growth has been the answer, just as it is now. If the system reaches its own internal limits at the
same time the world reaches its external biophysical limits we will have a profound challenge because we need a way to facilitate
decent standards of living when economic growth can no longer be the vehicle to maintain incomes and assure social stability. In the
last instance, a system in overshoot can neither growits way out of its inherent tendency toward stagnation,
nor can it grow its way into sustainability. We believe it is unlikely that the present system of capitalism,
dominated by multinational corporations, globalization, speculative finance, and dependence upon fossil
fuels, can adjust to the era of degrowth and remain intact as is. In order to devise an economy that meets human
needs as it approaches both sets of limits, ecological economics needs to understand more fully the structural and institutional
dimensions of the internal and external limits, as well as the interaction between the two. This is our challenge, and it is a difficult one.
Ecological economics can better understand the necessary institutional configuration of the non-growing economy only by an
improved understanding of the dynamics of growth and capital accumulation, because it is here that the inherent tendencies to stagnate
and the resolution to stagnation are found.
2NC Top Level
Growth is not sustainablemodels prove

Fagnart 14 (Jean-Francois Fagnart, Marc Germain, Energy, complexity and sustainable long-term growth, Elsevier, September
2nd, 2014)
This note has reconsidered what type of long-term growth is possible in a model with expanding product variety a la Gross- man and Helpman (1991) where all
human activities require energy. In this framework, we have linked the complexity of final production to the number of different components (or
inputs) en- tering into its assembly process. We have considered two cases, whether complexity is costly or not, i.e. whether product complexity increases the energy
requirements of production operations or not. A balanced growth path combining quantitative and non- quantitative growth has appeared
possible only if the potential of energy efficiency gains is unbounded in all (production and research) activities. This requires in
particular a decrease (towards zero) of the energy intensiveness of final production in spite of its increased complexity. Less optimistic assumptions
unavoidably lead to less favourable long-term growth scenarios. If the energy intensiveness of intermediate and/or final
productions is bounded from below by a strictly positive constant, quantitative growth is not sustainable in the long-run but a
purely non-quantitative growth path remains possible (i) if the impact of complexity on energy consumption is nil or not too strong
and (ii) if the energy intensiveness of the innovation process (the research activities in the present model) tends towards zero . If either one of these two
conditions is not met, zero-growth is the most favourable long-run scenario. It is not obvious to assess the
realism of the conditions under which long-term growth (even limited to its non quantitative dimension) is
possible. First, even though common perception suggests an increasing complexity of human productions and
processes, and of the economy as a whole, we do not have at our disposal an objective index of the complexity of our economies.
A fortiori, we do not have a quantification of the link between complexity and energy intensiveness at the aggregate level. How- ever,
the present note tends to reinforce the pessimistic view of ecological economics with respect to the
feasibility of long-term growth: in a finite world, even the intermediary case of a purely non-quantitative
long-term growth is only feasible under rather restrictive conditions, as discussed above.
Environmental Limits Ext.
Market Capitalism requires waste to survive

Ecological Economics journal issue no. 84 page 250, www.elsevier.com/ locate/ecolecon, DJE)
Harrod also enunciated the concept of the Natural Growth

Rate, Gn, which is determined by the increase in
population, the accumulation of capital and the level of technology, among other variables. The economic
system could not advance at a rate greater than allowed by the natural rate. If the warranted rate exceeded the natural rate the result
would be chronic tendency toward depression. The depression would drag down the warranted rate, and the reduction in Gw could
only be accomplished by means of chronic unemployment (Harrod, 1939). The impending onset of peak oil, the effects of
climate instability, ocean acidification, biodiversity loss, etc. will certainly reduce the natural rate of
growth. Without some institutional change the dynamics of market capitalism will bring on the end of
economic growth as we know it, with the natural rate falling the closer the system comes to its limits. If
we are to avoid chronic unemployment and increasing poverty a new set of institutional arrangements
must be found. Paul Baran and Paul Sweezy also analyzed the mature capitalist economy in their 1966work,Monopoly Capital.
Starting fromthe classical notion of economic surplus, or the difference between the value of the output and the sum of subsistence
consumption and replacement investment, they argued that modern capitalism is dominated by giant corporations (or
oligopolies) which maximize long-term profits by avoiding price competition, extending market share, and
reducing the cost of production. As a result the economic surplus tends to rise and needs to be absorbed.
If it is not, productionwill decline and chronic stagnation will appear. Baran and Sweezy stated that there were
three methods of absorbing this rising economic surplus: it could be consumed, invested or simply wasted. To analyze the increase in
consumption to levels sufficient to avoid stagnation Baran and Sweezy chronicle the development of the sales effort. Mass
consumption was not the result of rational consumers maximizing their subjective utilities subject to limited incomes, but a conscious
effort on the part of profit-seeking corporations and the state to assure that consumption levels are adequate to produce profit absorb
economic surplus. It is certainly possible to see the over extension of credit in our present era in the same vein. Investment directly
absorbs the economic surplus but simultaneously creates more surplus to be absorbed in the next period. Waste such as planned
obsolescence or energy inefficiency could also serve as a potential absorber as well as war. Baran and
Sweezy show that a market economy would succumb to long-term stagnation in the absence of waste. If
they are correct moving toward sustainability by reducing waste may exacerbate the economic stagnation that is already occurring
within our current economic structure. Certainly, in a rationally-planned economy, employment could be boosted,
and the environment improved, by large scale public investment in non-fossil transportation and the
construction of a non-fossil infrastructure. However Baran and Sweezy argue that large scale public investment
would not absorb sufficiently the economic surplus generated by the economy because of the power
relations of monopoly capitalism. Public investment that competed effectively with the private sector would be kept within
limits Baran and Sweezy, 1966. Their argument seems to have contemporary relevance, as the role of the government as a demand
manager is being debated both in the United States and in Europe at the present time.
Sustaining economic growth is impossible in light of its environmental harms

McElwee and Daly 14 (Sean McElwee, research assosciate, Lew Daly, the director of policy and research at Demos, a public
policy research organization, What if economic growth is no longer possible in the 21st century?, 3/20/2014, The Week,
http://theweek.com/articles/449050/what-economic-growth-no-longer-possible-21st-century, DJE)
For decades, rapid economic growth has been the norm for developed countries. An educated workforce, a large population boom,
major technological advances, and abundant fossil fuels were the key components of growth, generating substantial and broadly
distributed increases in standards of living in many countries. We have grown so used to such growth that we
inevitably view it as a panacea for a host of economic ills, whether it's a deep recession or income
inequality. We now understand, however, that the postwar growth paradigm is not environmentally
sustainable. We also know that the shared prosperity it once delivered is itself unraveling. With these combined trends,
something has to give in order to maintain living standards. One possible scenario, with surprisingly good news for
average Americans, is that constraints on growth will force political leaders to accept redistribution as a policy
tool. Indeed, if we cannot grow our way to broadly shared prosperity again, redistribution is the only way to save the middle class.
Many economists have warned that the old model is dying out. In a much-cited paper, Robert Gordon argues that the
rapid growth we take for granted is not only historically anomalous but likely to slow significantly in the
21st century, pointing in particular to diminishing returns from technology as one major drag. Developed
countries have already picked the "low-hanging fruit" of technological advance (in Tyler Cowen's phrase), and future innovations
will produce far less growth, he argues. Steven King, chief economist at HSBC, similarly argues, "The underlying reason for
the stagnation is that a half-century of remarkable one-off developments in the industrialized world will not be repeated." Gordon also
points to rising inequality, which has led to stagnating middle-class wages, as a drag on future growth. As a result of these trends and
others, average annual growth will fall below 1 percent in the 21st century, he predicts. The IMF to the rescue? Then there is the
impact on the global economy that will result from combating global warming. Working from a
conservative carbon budget of 450 parts per million (PPM), Humberto Llavador, John Roemer, and Joaquim Silvestre
predict that achieving this target will require a substantial slowing of growth, mainly borne by the United States and
China. The U.S. and China must keep growth within the threshold of 1 percent and 2.8 percent of GDP per year, respectively, for the
next 75 years, they say. In an interview, Roemer tells us that these results are optimistic; after all, some economists have argued that
growth may not occur at all. In the paper, the three argue that "there is no politically feasible solution to the climate change problem
unless" both the U.S. and China "honestly recognize the connection between restricting emissions and curbing growth." In contrast,
the Congressional Budget Office's long-range analyses use a growth projection of 2.2 percent on average over the next 75 years. Other
economists have come to similar conclusions about the connections between growth and sustainability. Early in 2012, Kenneth Rogoff
argued that maximizing growth must be weighed against the negative possibilities of growth, like global
warming. Indeed as James Gustave Speth notes, environmental impacts are the most significant challenges to growth :
"Economic activity and its growth are the principal drivers of massive environmental decline." Growth
constraints will push the issue of distribution to the forefront of political discussions. In his forthcoming book Capital, Thomas Piketty
predicts that growth will slow to between 1 and 2 percent 19th-century levels by the end of the 21st century. This trend, he
further argues, will be accompanied by higher returns to capital and lower returns to labor, thereby exacerbating inequality. The
conclusions that flow from these observations are stark. The old economic paradigm relied on unsustainable growth, so we must
change the paradigm. For decades, our rising standard of living came at a deep cost to our environment and our children's future.
There is simply not enough planetary bio-capacity to grow our way out of the messy moral discussions of
distribution. The idea that inequality is merely an inefficiency to be corrected with a technocratic fix or
perpetual growth is no longer tenable. Fortunately, we have plenty of GDP that could help the middle class, with
approximately $200,000 a year potentially available for each family of four. Given that the median family of four only gets about
$67,000 a year at this point, it should be clear that it is possible to grow and strengthen our middle class, significantly, while adjusting
to the lower GDP growth we are likely to experience in the future. The question is, will political leaders accept the need for
distributional remedies, or will they continue to side with the wealthy against the struggling middle class?
Social Limits Ext.
Internal limits mean economic growth is unsustainable

Ecological Economics journal issue no. 84 pages 247-248, www.elsevier.com/ locate/ecolecon, DJE)
The second set of limits is internal and is to be found in the dynamics of the accumulation process,
involving the complex structural interaction of production, consumption, and distribution. The internal
limits that gear the economy toward both cyclical variation and secular stagnation have not been
considered systematically by ecological economists. When the economy reached these limits historically
the result has been a series of periodic recessions and depressions. Renewed growth has been the answer, just as it is
now. If the system reaches its own internal limits at the same time the world reaches its external
biophysical limits we will have a profound challenge because we need a way to facilitate decent standards of living
when economic growth can no longer be the vehicle to maintain incomes and assure social stability. In the
last instance, a system in overshoot can neither grow its way out of its inherent tendency toward stagnation,
nor can it grow its way into sustainability.
A2: Renewable Tech
Waiting for current growth models to run their course dooms successful degrowth
Klitgaar and Krall 11 (Kent A. Klitgaard, Lisi Krall, ,Ecological economics, degrowth, and institutional change, 12/12/2011,
Ecological Economics journal issue no. 84 page 251, www.elsevier.com/ locate/ecolecon, DJE)
Although ecologically benign investments may provide a temporary cure for stagnation the root problem
of stagnation has not been solved. As Domar said, the economic stimulus is short lived. Additionally a great deal
of economic power will have to be wrestled from those who have it. Since renewable energy accounts for a small
portion of our energy supply, investment in a new energy economy would have to be considerable. It would have to be sufficient to
reduce our use of fossil fuels rather than augmenting them, and we have a difficult time imagining how the metals for the solar
economy can be mined, and the wind turbines manufactured and transported in the absence of fossil fuels (Kunstler, 2005). In
addition, renewables would have to replace the now very profitable oil industry as an investment outlet, and would have to play a
significant role in creating long term employment to replace some of the jobs presumably lost in the fossil fuel sector. Given the
profitability of fossil fuel and the jobs that presently exist in the gas, coal and oil sectors of the economy this is a tall order. The agenda
for government's role in managing investment set forth here is all the more unlikely in our present political and economic climate. It
will require greater taxation of the rich and middle class, more deficit spending, and if it doesn't fundamentally alter the dynamic at
hand we will be left in the same situation at the end of the renewable energy investment wave. Even if government-led
investment in renewable energy and refurbishing natural capital can temporarily provide employment
without accelerating environmental destruction, we still must acknowledge both the economic and the
political problems associated with this gradualism. Will profit take a back seat to well-being, as measured by access to
health care and the consistency of employment at rising real wages? It is unlikely that renewable energy will be as
profitable as fossil fuel in the final stages of peak oil because renewable sources are diffuse while oil is
energy dense. Is there any reason to believe that private capital will relinquish its prerogatives for
maximum profit with an eco-friendly wink and nod? Is there any reason to believe that the participation and purpose of
capital in green energy will be fundamentally different than it has been in other industries? Under the present institutions
capital will need to not only pursue, but maximize, profits, and more importantly will be bound by the
same forces as it has been in the past, and perhaps even more so, given the prominent role of finance with
its shorter time frames. A more enduring and sustainable economic system must begin by changing the rules of the game. If we
take the energy transition out of the hands of capital and instead have it led by the government for the
benefit of all there is a much greater chance of connecting the development of renewable energy to the
problems and challenges of unemployment and climate change. And there is less of an imperative to find outlets for
profitable investment in the future and that means less of an imperative for future expansion.
A2: Decoupling
Econ collapse is inevitable under the current modeldegrowth solves

Kallis 10 (Giorgos Kallis, In defence of degrowth, Elsevier, May 21st, 2010)
Sustainable degrowth can be defined from an ecologicaleconomic perspective as a socially sustainable
and equitable reduction (and eventually stabilisation) of society's throughput. Throughput refers to the materials and
energy a society extracts, processes, transports and distributes, to consume and return back to the environment as waste (Daly, 1996). Throughput is the food of the
social body's metabolism (Martinez-Alier, 2009b).
In the process of this social metabolism, entropy is increasing, slower or
faster (Georgescu-Roegen, 1973). Humanity and planet earth will eventually die, as each human body dies. This is an
inescapable law of physics; the question is how fast and soon will this happen (Georgescu-Roegen, 1973). A de-
grown steady-state will not be steady for infinity, but will arrest the speed of entropic degradation (Kerschner,
2010). The steady-state concerns only material throughput; qualitative changes and innovations in the economic, social or cultural sphere will still take place (Daly,
1996). Sustainable degrowth departs from the sustainable development rhetoric since it postulates that
throughput cannot be reduced with growing GDP, and even more, that throughput degrowth will inevitably entail a smaller
and qualitatively different economy, i.e. GDP degrowth. The basis for this is evidence that further economic growth is
bound to: i) exhaust non-renewable energy and material sources (Heinberg, 2010) and ii) pose unrealistic
expectations of efficiency improvements or technological breakthroughs in order to stay with in IPCC's CO2 thresholds
(Jackson, 2009; Victor, 2010). Renewable energies also yield less of a surplus than conventionally thought if one takes into
account the energy required for their (re)production (Murphy and Hall, 2010). The prophesised decoupling of economic growth from
throughput (material or energy use or CO2 emissions) is not happening (Jackson, 2009). And this may have to do with the fact that efficiency
improvements tend to rebound to increased consumption as relative prices fall (Polimeni et al., 2008; Sorrell, 2007).
We cannot rule out in theory the possibility of a dematerialized, service economy (see however Odum and Odum (2001) for a counter- argument given the high position
of services in the embodied energy hierarchy). But if we are to opt for a precautionary approach, we
should side with Daly (1996), who assumes a
correlation of throughput and GDP, and argues for limits on the scale of the economy rather than hoping for
technological, efficiency or dematerialization miracles.
Movements/Transition
Transition 2NC
A broad and deep economic crises leads to movements against growth

Lewis and Canaty (executive director of the Center for Community Enterprise; honorary research fellow at the University of
Birmingham and a director of Common Futures) 12
(Michael and Patrick, The Resilience Imperative: Cooperative Transitions to a Steady-state Economy, New Society Publishers,
googlebooks)
Stockman's soaring but accurate rhetoric echoes the utterances of many Occupy protesters on Wall Street and at 1,900
Occupy sites around the globe. This is both ironic and encouraging; it is also hopeful. The Great Transition requires a
broad range of citizens, from civil society groups to small businesspeople and from farmers to trade unionists
to find common ground and see the mutual attractiveness of a SEE Change. What is discourraging is that Stockman
sees no change coming out of the crisis of 2008. He believes a similar crisis will happen again and, indeed, that
such a crisis must be bigger and deeper if Americans are to be woken up sufficiently to mobilize
the political forces needed to overcome corporate America's undemocratic assault on freedom.
googlebooks)
Important as such action is, is it realistic to think, it can be effective against the global powerhouses of wealth and control,
who believe economic growth is an unalloyed public good most expediently advanced by keeping government out of the
way? The proposition of moving to a steady -state economy is laughable to many in this camp. After all,
they will argue, millions have been lifted out of poverty. Wealth is the basis for investment, and without the freedom to
pursue profit, investment will dry up. Besides, is it not by virtue of successful corporations that the jobs and taxes needed to
support social and environmental programs are created and sustained? These are powerful arguments. Indeed, they are
difficult to counter if you are limited to basing your argument on the last 40 years of supplyside economics, deregulation of
capital markets, and huge expansion in fossil-fuel-dependent economic growth.
Nevertheless, the rejection of these arguments is being fed by what businessman, author, and environmentalist
Paul Hawken calls "blessed unrest." Deepening disparity, human dislocation, and ecological threats
are feeding a different kind of growth - a virtually invisible but global movement that cuts across outdated
ideologies, different classes, and varied cultures.
Autonomous and diverse, often local or issue-specific in their focus, outgrowths of this movement are
multiplying across the globe. Some grow out of propositions to solve local problems; others out of opposition to
forces compromising the health of the local environment. Others cut their swath more widely, advancing propositions or
mobilizing opposition, linked together, often unwittingly, by a broad concern for the protection, healing, and health of
people and planet. Few have substantial monetary resources at their disposal, though among their numbers are a surprising
number of billionaires alleged to have had an epiphany on their way to the 21st century. Their breadth and diversity,
arguably one of their strengths and a key contributor to their successes, "also leaves the movement singularly vulnerable:'
suggests Hawken in his book Blessed Unrest:
However adaptive, diversity can also prevent connection, cooperation and effectiveness. Inevitably there is jockeying for
position and territory, and lack of collaboration, especially when organizations are forced to compete for scarce resources.
There is narcissism, when small groups begin to stare into the waters of just causes and imagine themselves to be saviours...
Strongly held beliefs can breed fanaticism as easily as genuine breakthroughs ..While issues grow in importance, a
balkanized movement does not match the scale of the problems.This is particularly obvious with respect to climate change.
On one hand, the practical implementation of hands-on energy reduction needs to be implemented on a local scale. But the
major policy changes and initiatives that must be taken on the national and international levels with respect to public
transportation, oil company subsidies, and renewable energy are stymied by the corruption of politicians and special
interests; as yet there has been no coming together of organizations in a united front that can counter the massive scale and
power of the global corporations and lobbyists that protect the status quo.
Fewer in number but strategically important are those that have managed to create a united front. This evolving
capacity to weave proposition and opposition into broadly based, multilayered federations
succeeds in shifting the discourse about what ends the economy should serve and, in modest
ways, makes some inroads into changing the rules by which the economy is governed.
Transition Possible
googlebooks)
Between now and 2050 we can choose to expand our investment in green infrastructure year on year. Jobs will be lost in the
transition from fossil fuels. But there are millions of jobs to be had as we redirect our time, talent and resource. We must
merely decide it is important, raise the price of carbon year on year and unleash the resilience of our species in a more
realistic direction.
Between now and 2050 we can grease the wheels for green infrastructure and many other transition pathways by choosing
to implement options for radically reducing the financial, human and planetary costs of compound interest. According to
the evidence we have cited, Germans pay 33% of household costs in interest and 35% of business expenses is created by
compound interest. Is it any wonder so-called progress is miring us in deeper and deeper levels of poverty and growing
joblessness? Follow the money trail. We know that usury can be overcome. We have made the case for public banking,
cooperative money and fee-based lending options to slash the growth-inducing cancer of compound interest and release life
energy and investment resources to transition towards the Green ART of Living.
Between now and 2050 we can definitely choose to implement broad land reforms that ensure both affordable housing for
all and fairness, and justice in the distribution of benefits that flow from the fruits of the earth, thus equipping ourselves
collectively for the ongoing investment in transition.
Between now and 2050 as we phase in land reform and lending reform and phase out usurious charges for land and capital,
we will reclaim our lives from the moneylenders and speculative developers. We can then take back power steadily from
the Market and be able to reduce our working time one percent per year. Long-term unemployment can simultaneously be
addressed through sharing paid work and releasing our "life energy" for what William Morris and Fritz Schumacher called
Good Work - growing food, looking after each other, pursuing the arts, playing music, and engaging in a widening panoply
of restorative investments of our time, talent, and resource.
Between now and 2050 we can choose to stabilize citizen incomes substantially through ensuring people share ownership
under a diversity of Trusteeship companies and CLBs, thus accessing a "binary" income - both wages from our work and a
share of the profits from democratic enterprises. Working hours may go down but if profits are shared, income stability can
be enhanced, performance improved, and the transition to a steady state economy can be progressively achieved.
A2: Need concrete change
Degrowth can be concrete and measurable

Kallis 10 (Giorgos Kallis, In defence of degrowth, Elsevier, May 21st, 2010)
Furthermore as Martinez-Alier et al. (2010) note the validity of concepts ... not only hold by their intellectual framing but also by their capacity to contribute to the
social changes they advocate. Philosophers are still scribbling over the meaning of liberty or equality, but this did not stop the French revolution from changing
degrowth will be politically useful if it mobilises people to bring beneficial
the world, probably for the better. Likewise,
social change and this will not be determined by whether it can be expressed in a single indicator or not.
van den Bergh is right that political change requires also concrete proposals, or even rallying slogans with specific
(measurable) demands. The call for equality for example was expressed in concrete demands to end
slavery, give women equal rights or provide full employment and social security. These were indeed clear
and unequivocal goals unlike sustainable degrowth. But sustainable degrowth is not meant to be a call in itself but
an umbrella vision, like equality, that brings together under a common framework a number of specific
demands: 21-hour working week, basic income for all, leave oil in the ground, cap CO2, cap salaries, etc
(see www.degrowth.eu and http://www.neweconomics. org/). Any of these specific demands can act as an entry points towards
a degrowth transition. Importantly, these demands can create broader social coalitions, including not only
environmentally- concerned groups, but also trade unions, precarious workers and the unemployed or environmental justice movements in the Global South (Gorz,
1994; Martinez-Alier, 2010).
Despite my argument against the importance of measurability, I do not mean that we
cannot work out indicators to capture different aspects of sustainable degrowth. We can think for
example of possible variables that capture socially sustainable degrowth , such as throughput-related ones (e.g.: CO2
emissions, percentage of land that is urbanized, hazardous waste in kg per capita, and total km travelled by food from source to consumption) and/or welfare ones
(poverty levels, equality indicators, self-reported happiness, etc). Disaggregated information may be more valuable in some analytical or policy contexts, and
aggregated indexes, with due recognition of their caveats, in other, more communicative contexts. Decrease of throughput variables and increase of welfare variables
(or an aggregate of them) may indicate progress in the direction of sustainable degrowth. Of course there are problems in aggregating different environmental indices or
material flows (van den Bergh, 2011), but I am confident that the fact that kgs of gravel cannot be aggregated with kgs of gold will not come as news to researchers of
the Wuppertal Institute in Germany who have been working with material flow indicators. Of course any indicator system is imperfect,
entailing incommensurable value claims and choices on what to measure, ad hoc weighing for aggregation or problems of empirical measurement. But this is
not particular to degrowth and it cannot be an argument against
A2: People Demand Growth
Transition is possible- humans are very adaptable

Schneider et al. Autonomous University of Barcelona. Research & Degrowth, Spain and France. ICREA, Catalonia, Spain. 1-22-
2010. Journal of Cleaner Production. Crisis or opportunity? Economic degrowth for social equity and ecological sustainability.
Introduction to this special issue
Matthey however does not examine how fixed or malleable are these aspirations. In fact, human
history suggests that we are very
adaptable to change, and that aspirations can quickly readjust if external conditions change. An aspiration for
increasing material consumption should not be taken for granted, but seen as a specific cultural-historical construct
that may easily change. The role of state policies and advertising is crucial in this respect , as in the recent crisis
where messages promoting consumption were amplified, struggling to maintain the materialist aspirations without which the market economy was in danger.
Degrowth mindset possible- already started in populations of the UK and Australia

Schneider et al. Autonomous University of Barcelona. Research & Degrowth, Spain and France. ICREA, Catalonia, Spain. 1-22-
2010. Journal of Cleaner Production. Crisis or opportunity? Economic degrowth for social equity and ecological sustainability.
Introduction to this special issue
Clive Hamilton approaches the same questions as Matthey, but from a sociological point of view. He argues that environmental problems today often originate from the
fact that consumption is no longer a means of fulfilling material needs but a method to create a personal identity (and advertising is central here). Over the last four
decades there has been a transition from a production to a consumption society with re-localization of production to the South and some countries of the East.
Marketing creativity has become key to entrepreneurs success; product usefulness is not so relevant any more (or even worse, obsolescence is often planned). The logic
of market expansion goes hand in hand with what Hamilton refers to as growth fetishism. Environmental appeals to change consumption behaviour implicitly ask
people not merely to change their behaviour but to change their sense of personal identity. Green consumerism cannot get us far, Hamilton argues. He finds instead
some ground for optimism in the fact that one
fifth of the population in the UK and Australia, a class he calls
downshifters, have voluntarily reduced their income and consumption to spend more time with family and friends. The
degrowth message should focus on a positive image of a beyond-materialism future, Hamilton argues, rather than on a
doomsday ecological imperative or a scaremongering with the present crisis. This reinforces Mattheys message to escape from a strictly economic focus on the current
crisis, as this is likely to backfire against degrowth.
A2: Economic Decline Causes War

Economic decline doesnt cause war.
Jervis 11 [Robert, Adlai E. Stevenson Professor of International Politics in the Department of Political Science, and a Member of
the Arnold A. Saltzman Institute of War and Peace Studies at Columbia University. Force in Our Times Saltzman Working Paper No.
15 July 2011 http://www.siwps.com/news.attachment/saltzmanworkingpaper15-842/SaltzmanWorkingPaper15.PDF]
Even if war is still seen as evil, the security community could be dissolved if severe conflicts of interest were to arise.
Could the more peaceful world generate new interests that would bring the members of the community into sharp disputes?
45 A zero-sum sense of status would be one example, perhaps linked to a steep rise in nationalism. More likely would be
a worsening of the current economic difficulties, which could itself produce greater nationalism, undermine democracy,
and bring back old-fashioned beggar-thy-neighbor economic policies. While these dangers are real, it is hard to believe that
the conflicts could be great enough to lead the members of the community to contemplate fighting each other. It is not so
much that economic interdependence has proceeded to the point where it could not be reversed states that were more
internally interdependent than anything seen internationally have fought bloody civil wars. Rather it is that even if the
more extreme versions of free trade and economic liberalism become discredited, it is hard to see how without building
on a pre-existing high level of political conflict leaders and mass opinion would come to believe that their
countries could prosper by impoverishing or even attacking others. Is it possible that problems will not only
become severe, but that people will entertain the thought that they have to be solved by war? While a pessimist could note
that this argument does not appear as outlandish as it did before the financial crisis, an optimist could reply (correctly, in
my view) that the very fact that we have seen such a sharp economic down-turn without anyone
suggesting that force of arms is the solution shows that even if bad times bring about greater economic
conflict, it will not make war thinkable.
A2: Economic Decline Causes War Ext.

Economic decline doesnt cause war. The Great Recession proves leaders turn to trade and institutional
cooperation, not armies. Prefer Jervis professor writing in a peer-reviewed study.
No impact to another recession.

Keystone Research 11 [Main Street Newsletter, 3 Ways the Next Recession Will Be Different,
http://keystoneresearch.org/media-center/media-coverage/3-ways-next-recession-will-be-different]
All of this has only renewed concerns among analysts and average Americans that the U.S. would suffer a dreaded double-
dip recession, but according to several economists MainStreet spoke with, even if we do enter into another recession
later this year or in early 2012, it wont be nearly as damaging as the Great Recession of 2008.If there is another
recession, I think it wouldnt be as severe and it would also be shorter, says Gus Faucher, senior economist
at Moodys Analytics. And the reason for that is a lot of the imbalances that drove the previous recession
have been corrected. As Faucher and others point out, banks are better capitalized now, the housing market
has shed (however painfully) many delinquent homeowners who signed up forsubprime mortgages before the
recession and U.S. corporations have trimmed their payrolls and are sitting on ample cash reserves to help
weather another storm. At the same time, consumers have gradually improved their own balance sheets by spending
less and paying off more of their debt.
No causal relationship between the economy and war.

Ferguson 6 [Niall, MA, D.Phil., is Laurence A. Tisch Professor of History at Harvard University and William Ziegler Professor of
Business Administration at Harvard Business School. He is also a Senior Research Fellow at Jesus College, Oxford University, and a
Senior Fellow at the Hoover Institution, Stanford University, Foreign Affairs, Sept/Oct, The Next War of the World]
Nor can economic crises explain the bloodshed. What may be the most familiar causal chain in modern
historiography links the Great Depression to the rise of fascism and the outbreak of World War II. But that simple story
leaves too much out. Nazi Germany started the war in Europe only after its economy had recovered. Not all the
countries affected by the Great Depression were taken over by fascist regimes, nor did all such regimes start wars of
aggression. In fact, no general relationship between economics and conflict is discernible for the century as
a whole. Some wars came after periods of growth, others were the causes rather than the consequences of
economic catastrophe, and some severe economic crises were not followed by wars.
Comprehensive study proves no relationship.

Miller 2K [Morris, Adjunct Professor at the University of Ottawa's Faculty of Administration, Interdisciplinary Science Review, v
25 n4]
The question may be reformulated. Do wars spring from a popular reaction to a sudden economic crisis that exacerbates
poverty and growing disparities in wealth and incomes? Perhaps one could argue, as some scholars do, that it is some
dramatic event or sequence of such events leading to the exacerbation of poverty that, in turn, leads to this deplorable
denouement. This exogenous factor might act as a catalyst for a violent reaction on the part of the people or on the part of
the political leadership who would then possibly be tempted to seek a diversion by finding or, if need be, fabricating an
enemy and setting in train the process leading to war. According to a study undertaken by Minxin Pei and Ariel Adesnik of
the Carnegie Endowment for International Peace, there would not appear to be any merit in this hypothesis. After
studying ninety-three episodes of economic crisis in twenty-two countries in Latin America and Asia in the years
since the Second World War they concluded that:19 Much of the conventional wisdom about the political
impact of economic crises may be wrong ... The severity of economic crisis as measured in terms of inflation
and negative growth bore no relationship to the collapse of regimes ... (or, in democratic states, rarely) to an
outbreak of violence ... In the cases of dictatorships and semi-democracies, the ruling elites responded to crises
by increasing repression (thereby using one form of violence to abort another).
Environment
1NC Warming
Only econ collapse solves in the necessary timeframe

Abramsky (visiting fellow at the Institute of Advanced Studies in Science, Technology and Society; fmr. coordinator of the
Danish-based World Wind Energy Institute) 10
(Koyla, Racing to "Save" the Economy and the Planet: Capitalist or Post capitalist Transition to a Post-petrol World?, in Sparking A
Worldwide Energy Revolution, ed. Koyla Abramsky, pg. 7)
the only two recent periods that have seen a major reduction in global CO2
The stark reality is that
emissions both occurred in periods of very sudden, rapid, socially disruptive, and painful periods of forced
economic degrowth-namely the breakdown of the Soviet bloc and the current financial-economic crisis. Strikingly, in
May 2009, the International Energy Agency reported that, for the first time since 1945, global demand for electricity was
expected to fall.
Experience has town that a lot of time and political energy have been virtually wasted on developing a
highly-ineffective regulatory framework to tackle climate change. Years of COPs and MOPs-the international
basis for regulatory efforts have simply proven to be hot am And, not surprisingly, hot air has resulted in global warming.
Only unintended degrowth has had the effect that years of intentional regulations sought to achieve .
Yet, the dominant approaches to-climate change continue to focus on promoting regulatory reforms, rather than on more
fundamental changes in social relations. This is true for governments, multilateral institutions, and also large sectors of
so-called 'civil society:' especially the major national and international trade unions and their federations, and NOOs. And
despite the patent inadequacy of this approach, regulatory efforts will certainly continue to be pursued .
Furthermore, they may well contribute to shoring up legitimacy , at least in the short term, and in certain
predominantly-northern countries where the effects Of climate changes are less immediately visible and impact on pepplds
lives less directly. Nonetheless, it is becoming increasingly clear that solutions will not be found at this level.
The impact is linear the greater growth, the quicker extinction happens. It magnifies all impacts and
social problems
Pradanos 15 (Luis Pradanos, writer and Assistant Professor of Spanish at Miami University, An economy focused solely on
growth is environmentally and socially unsustainable, 4/7/2015, The Conversation, http://theconversation.com/an-economy-focused-
solely-on-growth-is-environmentally-and-socially-unsustainable-39761, DJE)
Most world leaders seem to believe that economic growth is a panacea for many of societys problems. Yet there are many links
between our societys addiction to economic growth, the disturbing ecological crisis, the rapid rise of
social inequality and the decline in the quality of democracy. These issues tend to be explored as disconnected
topics and often misinterpreted or manipulated to match given ideological preconceptions and prejudices. The fact is that they are
deeply interconnected processes. A large body of data and research has emerged in the last decade to illuminate such
connections. Studies in social sciences consistently show that, in rich countries, greater economic growth on its own does very little or
nothing at all to enhance social well-being. On the contrary, reducing income inequality is an effective way to resolve social problems
such as violence, criminality, imprisonment rates, obesity and mental illness, as well as to improve childrens educational
performance, population life expectancy, and social levels of trust and mobility. Comparative studies have found that societies that are
more equal do much better in all the aforementioned areas than more unequal ones, independent of their gross domestic product
(GDP). Economist Thomas Piketty, in his recent book Capital in the Twenty-First Century, has assembled extensive data that shows
how unchecked capitalism historically tends to increase inequality and undermine democratic practices. The focus of a successful
social policy, therefore, should be to reduce inequality, not to grow the GDP for its own sake. Placing economic growth above
all else contributes to environmental degradation and social inequality. Concurrently, recent
developments in earth system science are telling us that our frenetic economic activity has already
transgressed several ecological planetary boundaries. One could argue that the degradation of our
environmental systems will jeopardize socioeconomic stability and worldwide well-being. Some scientists
suggest that we are in a new geological epoch, the Anthropocene, in which human activity is transforming
the earth system in ways that may compromise human civilization as we know it. Many reports insist
that, if current trends continue, humanity will soon face dire and dramatic consequences. If we consider all
these findings as a whole, a consistent picture emerges, and the faster the global economy grows, the faster the living
systems of the planet collapse. In addition, this growth increases inequality and undermines democracy,
multiplying the number of social problems that erode human communities. In a nutshell, we have created a
dysfunctional economic system that, when it works according to its self-imposed mandate of growing the pace of production and
consumption, destroys the ecological systems upon which it depends. And when it does not grow, it becomes socially unsustainable. In
a game with these rules, there is no way to win!
A2: Econ Key to Environment
Their authors dont consider positive environmental impacts of econ degrowth 2008 crisis resulted from
unsustainability
Schneider et al. 1-13-2010. Crisis or opportunity? Economic degrowth for social equity and ecological sustainability.
Introduction to this special issue. Journal of Cleaner Production. Accessed 7-17-2015.
4. Crisis or opportunity? Degrowth in the context of the economic crisis of 20082009 The Paris Conference took place when the economic crisis of
200809 was yet about to start (although our contributors were asked to revise their articles and reflect on the implications of the crisis). As Kallis, Martinez-Alier and
Norgaard [43] argue, the crisis is a result of unsustainable growth .
Irresponsible borrowing and the cultivation of fake
expectations in the housing market were not accidents, but a systemic failure of a system struggling to
keep up with growth rates that could not be sustained by its biophysical base (the real economy). Furthermore, the crisis
marks a failure of economicism, the doctrine of mainstream, neo-classical economics which refuses to accept any material reality beyond the beliefs of investors and
consumers. The collapse of the fictitious economy had real impacts. Because of the economic crisis, and despite growth in India,
China, Indonesia, the world trend towards increased emissions of carbon dioxide (3 per cent growth in emissions per
year up to 2007) has been stopped, and there has been a reduction of three per cent[44]. This is too little compared with the IPCC recommended reduction of over
60 per cent but it shows that more than the Kyoto commitment and more than technological changes, it is economic degrowth that achieves
greenhouse gas emission reductions. Similarly, because of the decrease in external demand for exports, the rate of
deforestation in the Brazil Amazon has decreased to only 7000 sq. km. in the year 2008 [45]. Economic degrowth can be good
for the environment. It helped to reach goals that 20 years of talking about sustainable development did not
achieve. Nevertheless, scientists and politicians have not been considering degrowth as an option. The IPCC projections [46] (or the Stern report [47]) never
considered that the peak of carbon dioxide emissions could be reached in 2007. Will this be just one peak in cordillera of peaks leading to climate disaster? The
consequences of economic degrowth have been absolute reductions of emissions and extractions, and perhaps to
some extent avoidance of outsourcing/delocalization of environmental impacts. In a context of economic degrowth,
increased efficiency in resource use is not accompanied by a rebound effect [48]. The rate of substitution of renewable
energies (wind, photovoltaic) for other energies may increase more easily when the overall use of energy is stable or declines. It is likely that the reduction of natural
resource extraction and CO2 emissions is larger than the degrowth rate of the economy because in times of economic shrinking it seems (at least in the present crisis)
that material and energy intensive industries are heavily affected, leading to an actual decoupling. For instance, the cement output has decreased faster than the overall
economy in many countries; in Spain in the first four months of 2009, cement demand dropped by about 45% [49]. If well targeted green Keynesianism rather than
public works Keynesianism and car subsidy Keynesianism had been applied, the dematerialization of the economy could have advanced further in the economic
crisis of 200809. All this does not imply that the crisis was a positive development as it involved individual and social hardships. This was not a socially sustainable
degrowth process, but recession, i.e. degrowth within a growth-based economy. We should not however assume that degrowth in a European, American and Japanese
context implies automatically a social catastrophe. These are economies with income levels (and energy and material consumption) much higher than in the 1930s when
the crisis affected the fulfilment of basic needs. An
economic crisis hitting a country with over 20,000 euros of income per
capita still allows much room for social policies that can smooth the transition, such as work-sharing,
redistributive taxation with investment in social security and public goods. The question we ask is how positive would
degrowth be if instead of being imposed on us by an economic crisis, it would actually be a democratic collective decision, a project
with the ambition of voluntarily getting us closer to ecological sustainability and socioenvironmental justice
worldwide. Economists fail to consider scenarios of economic downturn, and they unanimously view a return to economic
growth as the desirable objective, not least in order to be able to pay back the increased burden of financial debt by other means than inflation and defaults. In order to
preserve the AAA rating of US Treasury Bills, the economy must grow.
Studies Prove
Economic growth kills the environment scientific study proves

Ahmet Atl Asici, Istanbul Technical University, 6-18-2012, Economic growth and its impact on
environment: A panel data analysis Ecological Indicators.
3. Methodology 3.1. Data and descriptive analysis: With a panel of 213 low, middle and high-income countries, between
1970 and 2008, we employ a panel regression analysis to investigate the relationship between log real per
capita income and log real pressure on nature. Our dependent variable, per capita pressure on nature, in constant 2005 US $, is defined as;
Pressure on nature p.c. = carbon dioxide damage p.c. +mineral depletion p.c. +energy depletion p.c. +net forest depletion p.c. Unless otherwise indicated, all
variables are extracted from World Development Indicator (WDI) database3 of the World Bank (World Bank, 2012), and are summarized in Table
2. See Table A1 for a detailed explanation and sources of all variables. Table 1 shows that the pressure on nature takes different forms in different income groups.
Comparatively, net deforestation and mineral depletion in low-income countries, energy depletion and CO2 damage in middle-income countries and energy depletion in
high-income countries constitute the major sources of the pressure on nature. When we look at the shares of each component in the total pressure on nature, we come up
with a similar picture. In Fig. 1 we see that, in high
and middle income countries CO2 damage and energy depletion
constitute the majority of the total pressure on nature, whereas in low income countries, it is dominated
by forest depletion, followed by CO2 damage and mineral depletion. This uneven distribution of components across different
income groups requires more attention and we will turn back to this issue in the regression analysis part. Preliminary cross-country analysis, by using the plot
diagram in Fig. 2, reveals that there is a positive relationship between income and pressure on nature. In other words,
as countries grow richer, so do their pressure on nature. However, the relationship is not linear across different income groups. Due to
the possible existence of endogeneity and omitted variable biases cross-country relationship does not necessarily prove causation. Consider for example Turkey and
Finland. Finland is richer and exerts less pressure on her nature, so a simple crosscountry comparison would suggest that higher per capita income causes less pressure
on nature. But the right question to ask should be whether a country is more likely to exert less pressure on nature as it becomes richer or not. In Fig. 3, we plot the
changes in log per capita income against changes in pressure on nature between 1970 and 2008. This helps to eliminate the time-invariant country- fixed effects. But
even after eliminating them, the positive relation between income and pressure on nature remains. While differencing variables helps to remove the time-invariant
characteristics of countries, it does not necessarily heal the simultaneity bias. That is, the positive relationship emerged in the plot-diagram may be arisen due to some
other factor affecting both economic growth and pressure on nature. The preliminary analysis of the data by plot diagrams presented in Figs. 2 and 3 helps us to find the
right econometric method to study the economic growth-environmental pressure relationship. We will come back to this issue in the next subsection. Table 2 presents
the descriptive statistics of the observations included in the regression analysis.
Economic growth kills the environment data shows income, trade, and open structure increase pressure
on nature
Ahmet Atl Asici, Istanbul Technical University, 6-18-2012, Economic growth and its impact on
environment: A panel data analysis Ecological Indicators.
In other components, like mineral depletion and CO2 damage, regression results indicate a negative scale effect of increasing income. As for energy depletion, we do not find a statistically
significant effect. Lastly, we investigate the influences of some structural and institutional covariates. Table 7 presents the fixed-effects IV model results. The results are fairly supportive of the
race-to-the-bottom hypothesis which asserts that countries tend to lower down their environmental standards in order to attract more investment. Increasing integration to the global system
through trade increases the pressure on environment. We found that 10% increase in openness ratio increases the per capita
pressure on nature by 9.5%. This is in line with the conclusion reached by Borghesi and Vercelli (2003). The regression results support our hypothesis
that the governance structure is positively related with environmental sustainability which also confirms the findings of the
earlier studies mentioned above. More specifically, we found that a unit increase in the rule of law indicator decreases the per capita pressure on nature by 0.5%. Together with
the effects of increasing openness to trade, the positive relationship between rule of law (or quality of institutions) and
environmental protection calls for a closer look at the current globalization patterns. The environmental consequences of
deregulation efforts by international institutions like IMF, WB and WTO during the sample period is worth to mention. As Tisdell (2001) and Esty (2001) argue, existing environmental and
social constraints were gradually eroded by the indiscriminate deregulation of world trade. In the same spirit, Daly (1993) argues that free trade promotes competition that results in lowering of
environmental standards as well as wages, which in turn, increases environmental degradation in developing and unemployment in high-income countries. The experience of Mexico, as a
middleincome country receiving a good deal of foreign direct investment especially after the NAFTA agreement is telling. Steininger (1994) reports that lower environmental standards in
Mexico played a crucial role in the concentration of maquiladoras along the USbordering area, and this resulted in increasing unemployment in US and environmental damage and health
problems in Mexico. Coming to the education, we find a statistically significant result between the secondary school enrollment rate and pressure on nature, yet the positive sign of the estimate
is not as expected, possibly due to the very limited availability of data especially for low and middle-income countries. Overall, we see that even after controlling for various structural and
Our results suggest that there is a
institutional indicators, the positive relationship between income and pressure on nature continues to hold. 5. Concluding remarks
positive relationship between income per capita and per capita pressure on nature. The effect is much
stronger in middle-income countries than in low and high-income countries. After controlling for various
covariates, institutional and structural, the positive effect still continues to hold. Our conclusions are fairly robust to the inclusion of these covariates, and to the
inclusion and exclusion of countries from the sample. The regression results shed doubts on the environmental sustainability of
the growth process especially in middle-income countries. Increasing prosperity leads more consumption
and thereby more pressure on nature especially in the form of CO2 damage and mineral depletion. However,
we found an opposite effect on forestry resources. The institutional quality, as measured by the extent of enforceability of rule
of law, has a significant negative effect on the pressure on nature along with our expectations. Our results suggest that increasing
trade has a negative impact on environment and this finding clearly can be taken as a support for race-to-the-
bottom hypothesis. Although the formulation of MDGs clearly demonstrates that economic growth and environmental protection are mutually reinforcing, there are serious
doubts on our ability in decoupling of economic growth from pressure on nature in absolute terms (Moldan et al., 2011). Our results support those studies indicating that the current
economic growth paradigm is unsustainable especially in middle-income countries. Given the increasing importance of these
countries as recipients of FDI flows and as producers in the global supply chain, achieving environmental sustainability without jeopardizing the other determinants of human welfare continues
to be a big challenge that has to be confronted.
Growth Good
Key to the Environment
ECONOMIC GROWTH key to BIODIVERSITY

The Economist 13, 9-14-2013, The Long View, The Economist, http://www.economist.com/news/special-report/21585100-
contrary-popular-belief-economic-growth-may-be-good-biodiversity-long-view
COMPARISONS BETWEEN ADJOINING countries separated by politics or economics can be

instructive. North Koreas forests have been shrinking by around 2% a year for 20 years; South Koreas
are stable. Satellite pictures of the island of Hispaniola in the Antilles show that the western side (Haiti,
with a GDP per person of $771 a year) is barren, whereas the eastern side (Dominican Republic, GDP per
person $5,736) still has plenty of dense forest. Economic growth is widely believed to damage species
other than man. But as the contrasting fortunes of forests (a fair proxy for biodiversity) on the Korean
peninsula and Hispaniola suggest, it is not so much growth as poverty that reduces biodiversity.
Poverty without growth, combined with lots of people, is disastrous. Poverty combined with growth can
be equally calamitous. But once people enjoy a certain level of prosperity, the benefits of growth to other
species outweigh its disadvantages. The Living Planet Index (LPI), put together by the Zoological
Society of London and WWF (see chart 4), shows a 61% decline in biodiversity between 1970 and 2008
in tropical areas, which tend to be poorer, but a 31% improvement over the same period in temperate
areas, which tend to be richer. Similarly, poor countries tend to chop down forests, and rich
countries to plant them (see interactive chart 5). Some of the improvement might be due to rich
countries exporting their growth to poorer countries, but that is clearly not the only factor at work.
Nobody exported growth to North Korea and Haiti, and their environments still got trashed.
Meanwhile in countries that were poor until fairly recentlysuch as South Korea and Brazil
things are looking up for many species.
Key to Solve Poverty
Economic growth solves poverty poorest 40%

The Economist 13 (Offers authoritative insight and opinion on international news, politics, business, finance, science, technology and
the connections between them, A dollar a day, http://www.economist.com/blogs/feastandfamine/2013/09/poverty-growth-and-
world-bank, September 17th 2013, accessed 7/17/15, ASX)
In 1991, David Dollar and Aart Kraay, both of the World Bank, published an influential paper, Growth
is good for the Poor. It established, as an empirical matter, that when average incomes rise, the average
incomes of the poorest fifth of society rise proportionately. The implication was that economic growth and its
determinantsmacroeconomic stability, rule of law, openness to trade and so onbenefit the poorest
fifth as much as they do everyone else. This was the heyday of the "Washington consensus". The term had been coined by John Williamson of the
Institute for International Economics only two years before. And the study helped confirm the then-widespread view that, as a
guideline for policymakers, poor countries ought to concentrate on getting the basics of growth right , rather
than on specific measures aimed at helping the poorest. They could do that too, of course. But the impact was not all that great. When Messrs Dollar and Kraay
examined four interventionsprimary education, social spending, agricultural productivity and improvements in formal democratic institutionsthey found little
evidence that these disproportionately benefited the poor. Now, Messrs Dollar and Kraay, together with Tatjana Kleineberg, have revisited their study. Usinga
larger and more detailed data set (118 countries not 92), they find that just over three-quarters of the
improvement in the incomes of the poorest 40% is attributable to improvements in average incomesie,
it comes mainly from growth. The title of the new paper says it all: Growth still is good for the poor. But the context is very different from what it
was in the early 1990s. Now, the talk is all about income inequality, people being trapped in poverty and the need to help the poorest directly. Barack Obama,
David Cameron, the World Bank and dozens of non-governmental organizations, for example, have signed up to the
idea that extreme poverty can be eradicated by 2030 (in practice, this means reducing to about 3% the share of the worlds population
subsisting on $1.25 a day or less). With hundreds of development agencies gathering in New York on September 25th to talk about "sustainable development goals" to
replace the millennium goals that expire in 2015, the air is thick with talk about the problem of inequality and about how the poorest can be trapped by "business as
usual". Does this mean the new paper contradictsand possibly underminesthe post-Washington consensus? The World Bank itself has what it calls a new
"overarching mission" which fits the mood of the sustainable-development goals.
It commits the bank to "end extreme poverty and
promote shared prosperity". It is hard to resist discerning some tensiona difference in emphasis, at least between the aim of "promoting shared
prosperity" and this sentence from the new paper: "historical experience in a large sample of countries does not provide
much guidance on which combinations of macroeconomic policies and institutions might be particularly
beneficial for promoting shared prosperity as distinct from simply prosperity ." If it is hard to know how to promote
"shared prosperity", why not just concentrate on prosperity pure and simple? Other non-governmental organizations have gone further than the World Bank. Save the
Children, a charity, argues in a new paper ("Getting to Zero: how tackling inequality and governance could move us closer to finishing the job of the MDGs") that
"governments must get serious about addressing income inequality and improving governance." But if
economic growth produces four-fifths of the improvement in the incomes of the poorest, would it not be
better to concentrate on that? UPDATE (18th September). Laurence Chandy of the Brookings Institution, and co-author of a study that argued it
was possible almost to eradicate extreme poverty, has an interesting new paper describing the two basic approaches to reducing poverty as
inclusive growth versus global social safety net. He argues both are needed.
Economic growth solves poverty in affluent nations Brazil

Dahlquist 13 (Matilda, Industrial designer and economist at Sdertrn University, Does Economic Growth reduce
Poverty?,http://www.diva-portal.org/smash/get/diva2:747531/FULLTEXT01.pdf, September 2013, accessed 7/17/15, ASX)
Poverty is a multidimensional phenomenon, and its complexity does not decrease the more carefully it is investigated. Economic
growth decreases the level of extreme poverty. This is a main conclusion drawn from the regression,
which confirms theory and earlier studies. Also the level of poverty is strongly related to decrease of poverty, in such a way that a high level of
poverty is associated to a slow decrease of poverty. A country with a large fraction of poor and a low growth rate is thus
shown to have problems in reducing poverty. Economic growth does not appear to be sufficient a tool when the level of extreme poverty is
high. This seems to indicate that poverty reduction must be triggered, the gears must be set in motion, especially in countries with a large portion of extremely poor.
Brazil is a successful example of a middle-income country that has managed to reduce the incidence of
extreme poverty in the last decade from a high level to a relatively low one. During the era of the military regime in the
1970-80s, the growth rates were high but few benefitted from them, as there were no substantial redistributive policies. Its stabilization policies and
commodity boom in the 90s lay up for economic growth, which created monetary excesses. GDP is
however just a sum of economic activities, which can be distributed in many different ways. In Brazil
there was a political will to face the problems of the high incidence of poverty, so the growth policies were
combined with redistributive public and economic policies targeted toward the poor, which has led to an
achievement of pro-poor growth. What can also be noted from the case of Brazil as well as the regression analysis is that both the two approaches
are relevant. Growth does reduce poverty, yes, but in countries where the level of extreme poverty is high, growth policies do not seem to decrease the incidence of
poverty. This shows the complexity surrounding these phenomena.
GROWTH IS GOOD FOR THE POOR

Aart Kraay and David Dollar 01, 4-01, Growth is good for the poor, eLibrary, http://elibrary.worldbank.org/doi/abs/10.1596/1813-
9450-2587
When average incomes rise, the average incomes of the poorest fifth of society rise proportionately. This
holds across regions, periods, income levels, and growth rates. But relatively little is known about the
broad forces that account for the variations across countries and across time in the share of income
accruing to the poorest fifth. This is a consequence of the strong empirical regularity that the share of
income accruing to the bottom quintile does not vary systematically with average income. Dollar and
Kraay document this empirical regularity in a sample of 92 countries spanning the past four decades and
show that it holds across regions, periods, income levels, and growth rates. Dollar and Kraay next ask
whether the factors that explain cross-country differences in the growth rates of average incomes have
differential effects on the poorest fifth of society. They find that several determinants of growthsuch as
good rule of law, openness to international trade, and developed financial marketshave little systematic
effect on the share of income that accrues to the bottom quintile. Consequently, these factors benefit the
poorest fifth of society as much as everyone else. There is some weak evidence that stabilization from high
inflation and reductions in the overall size of government not only increase growth but also increase the
income share of the poorest fifth in society. Finally, Dollar and Kraay examine several factors commonly
thought to disproportionately benefit the poorest in society, but find little evidence of their effects. The
absence of robust findings emphasizes that relatively little is known about the broad forces that account
for the cross-country and intertemporal variation in the share of income accruing to the poorest fifth of
society. This papera product of Macroeconomics and Growth, Development Research Groupis part
of a larger effort in the group to study growth and poverty reduction.
Key to Solve Inequality
GROWTH IS A NECESSITY FOR EQUALITY AND STABILITY

J. Bradfold Delong 06, Janurary and February 2006, 82, Ph.D. 87, professor of economics at the University of California at Berkeley,
is at work on The Economic History of the Twentieth Century: Slouching towards Utopia?, Harvard Magazine,
http://harvardmagazine.com/2006/01/growth-is-good.html
Benjamin M. Friedman 66, Jf 71, Ph.D. 71, Maier professor of political economy, now fills in this gap: he
makes a powerful argument thatpolitically and sociologicallymodern society is a bicycle, with
economic growth being the forward momentum that keeps the wheels spinning. As long as the wheels of a
bicycle are spinning rapidly, it is a very stable vehicle indeed. But, he argues, when the wheels stopeven
as the result of economic stagnation, rather than a downturn or a depressionpolitical democracy,
individual liberty, and social tolerance are then greatly at risk even in countries where the absolute level
of material prosperity remains high. Friedman is not afraid to charge head-on at the major twentieth-century
counterexample to his thesis: the Great Depression in the United States. Elsewhere in the world, that catastrophe offers no challenge to
his point of view. Rising unemployment and declining incomes in Japan in the 1930s certainly played a role
in the assassinations and silent coups by which that country went from a functioning constitutional
monarchy with representative institutions in 1930 to a fascist military dictatorship in 1940a
dictatorship that, tied down in a quagmire of a land war in Asia as a result of its attack on China, thought
it was a good idea to attack, and thus add to its enemies, the two superpowers of Britain and the United
States. In western Europe the calculus is equally simple: no Great Depression, no Hitler. The saddest book on
my shelf is a 1928 volume called Republican Germany: An Economic and Political Survey, the thesis of which is that after a decade of
post-World War I political turmoil, Germany had finally become a stable, legitimate, democratic republic. And only the fact that the
Great Depression came and offered Hitler his opportunity made it wrong. Friedman has not written his version of
economic history and moral philosophy just for the sake of antiquarians like me who like to read about the
strange and faraway places that are our own past. He takes historical patterns and draws from them
immediate and powerful lessons for the present. Consider the United States today. For a generation now, the
benefits of economic growth have been concentrated in those slots in American society that are at or near
the top. To the extent that any of Americas working class is richer today in inflation-adjusted terms than
the nations workers were in the early 1970s, it is because todays households have fewer children and a
greater proportion of their members out earning money. Americas middle class today does live better
than the middle class lived in 1970 (and a bunch of the children of the 1970s working class are in todays middle class). But
today the gap between Americas middle class and its upper class yawns extremely wide, at levels not seen
since before the stock market crash of 1929.
WHY GROWTH IS GOOD
Robert Reich 10, 8-20-2010, chancellors professor of public policy at the University of California at Berkeley. He
has served in three national administrations, most recently as secretary of labor under President Clinton,
Why Growth is Good, CSMonitor, http://www.csmonitor.com/Business/Robert-Reich/2010/0820/Why-growth-is-good
Economic growth isnt just about more stuff. Growth is about a nation producing everything its
inhabitants want and need, including environmental stewardship, improved public health, and better
schools. Economic growth is slowing in the United States. Its also slowing in Japan,France, Britain, Italy,
Spain, and Canada. Its even slowing in China. And its likely to be slowing soon in Germany. If
governments keep hacking away at their budgets while consumers almost everywhere are becoming more
cautious about spending, global demand will shrink to the point where a worldwide dip is inevitable. You
might ask yourself: So what? Why do we need more economic growth anyway? Arent we ruining the
planet with all this growth destroying forests, polluting oceans and rivers, and spewing carbon into the
atmosphere at a rate thats already causing climate chaos? Lets just stop filling our homes with so much
stuff. The answer is economic growth isnt just about more stuff. Growth is different from consumerism.
Growth is really about the capacity of a nation to produce everything thats wanted and needed by its
inhabitants. That includes better stewardship of the environment as well as improved public health and
better schools. Faster growth greases the way toward more equal opportunity and a wider distribution of
gains. The wealthy more easily accept a smaller share of the gains because they can still come out ahead
of where they were before. Simultaneously, the middle class more willingly pays taxes to support public
improvements like a cleaner environment and stronger safety nets. Its a virtuous cycle. We had one
during the Great Prosperity the lasted from 1947 to the early 1970s.
Key to Solve War
Double dip recession causes nuclear war

Fordham 10 [Tina Fordham, Investors cant ignore the rise of geopolitical risk, Financial Times, 7-17-2010, http://www.ft.com/cms/s/0/dc71f272-7a14-11df-
9871-00144feabdc0.html]
Geopolitical risk is on the rise after years of relative quiet potentially creating further headwinds to the global recovery just
as fears of a double-dip recession are growing, says Tina Fordham, senior political analyst at Citi Private Bank. Recently,
markets have been focused on problems within the eurozone and not much moved by developments in
North Korea, new Iran sanctions, tensions between Turkey and Israel or the unrest in strategically
significant Kyrgyzstan, she says. But taken together, we dont think investors can afford to ignore the return of geopolitical concerns to the
fragile post-financial crisis environment. Ms Fordham argues the end of post-Cold War US pre-eminence is one of the
most important by-products of the financial crisis. The post-crisis world order is shifting. More
players than ever are at the table, and theirinterestsoftendiverge . Emerging market countries have
greater weight in the system, yet many lack experience on the global stage. Addressing the worlds
challenges in this more crowded environment will be slower and more complex. This increases the
potential for proliferating risks: most notably the prospect of politically and/or economically
weakenedregimesobtaining nuclear weapons; and military action to keep themfromdoingso. Left
unresolved, these challenges could disrupt global stability and trade. This would be a very unwelcome
time to see the return of geopolitical risk.
Escalation is likely rational action breaks down.

Dr. Malcolm Riddoch, Faculty of Communications and Creative Industries at Edith Cowan University, 9-12- 4
(http://www.energybulletin.net/2076.html)
In the coming energy/wealth decline there will be increasing pressure to concentrate the remaining wealth in the industrial
and military sectors that need it most, at the expense of everyone else and their democratic and human rights. The US
already seems to be going this way as the presidency isolates itself even further from congressional oversight and Bush
starts to rule by decree. At the same time there is a gigantic flight of US federal funds into the corporate and military sectors
and an even larger tax break for the wealthy. Following a global economic collapse this plutocratic rule will probably turn
into a free for all, the worst case scenario being a form of globalised capitalist totalitarian feudalism some time after 2010.
With the rise of totalitarianism there follows the total mobilisation of a nation's human and material resources in a total war
of annihilation against all competitors. That is the logic of modernity and its great power games, our historical precedent is
the rise of Nazism and the slaughter of WW2. The coming world war, however, will be fought with tactical nuclear
weapons against non-nuclear or weak nuclear opponents, and one might hope that this limited nuclear warfare would not
trigger a much more dangerous nuclear showdown between any number of major nuclear powers. Once unleashed, nuclear
escalation may take on a life of its own as that is the very nature of total war , its proponents are ultimately driven to take
total chances resulting in either total success or annihilation.
History proves (short version)

Mead Senior Fellow in Foreign Policy 9 (Walter Russell Mead, Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations.
The New Republic, Only Makes You Stronger, February 4, 2009, http://www.tnr.com/politics/story.html?id=571cbbb9-2887-4d81-8542-92e83915f5f8&p=2
History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If
financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The
wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars;
the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises . Bad
economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and
helped bring Adolf Hitler to power. If the current crisis turns into a depression , what rough beasts might start
slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline,
but, if we can't get the world economy back on track, we may still have to fight.
Economic collapse causes nuclear war with China (long version)
Walter Russell Mead, Senior Fellow, US Foreign Policy, Council on Foreign Relations, 2/4/ 09, Only
Makes You Stronger, The New Republic, http://www.tnr.com/politics/story.html?id=571cbbb9-2887-4d81-
8542-92e83915f5f8&p=2)
http://www.tnr.com/politics/story.html?id=571cbbb9-2887-4d81-8542-92e83915f5f8&p=2)
The damage to China's position is more subtle. The crisis has not--yet--led to the
nightmare scenario that China-watchers fear: a recession or slowdown producing
the kind of social unrest that could challenge the government . That may still come to
pass--the recent economic news from China has been consistently worse than most experts
predicted--but, even if the worst case is avoided, the financial crisis has nevertheless had
significant effects. For one thing, it has reminded China that its growth remains
dependent on the health of the U.S. economy. For another, it has shown that China's
modernization is likely to be long, dangerous, and complex rather than fast and sweet, as some
assumed. In the lead-up to last summer's Beijing Olympics, talk of a Chinese bid to challenge
America's global position reached fever pitch, and the inexorable rise of China is one reason
why so many commentators are fretting about the "post-American era." But suggestions that
China could grow at, say, 10 percent annually for the next 30 years were already looking
premature before the economic downturn. (In late 2007, the World Bank slashed its estimate of
China's GDP by 40 percent, citing inaccuracies in the methods used to calculate purchasing
power parity.) And the financial crisis makes it certain that China's growth is likely to be much
slower during some of those years. Already exports are falling, unemployment is rising, and the
Shanghai stock market is down about 60 percent. At the same time, Beijing will have to devote
more resources and more attention to stabilizing Chinese society, building a national health care
system, providing a social security net, and caring for an aging population, which, thanks to the
one-child policy, will need massive help from the government to support itself in old age. Doing
so will leave China fewer resources for military build-ups and foreign adventures. As the crisis
has forcefully reminded Americans, creating and regulating a functional and flexible financial
system is difficult. Every other country in the world has experienced significant financial crises
while building such systems, and China is unlikely to be an exception. All this means that
China's rise looks increasingly like a gradual process. A deceleration in China's long-term
growth rate would postpone indefinitely the date when China could emerge as a peer competitor
to the United States. The present global distribution of power could be changing slowly, if at all.
The greatest danger both to U.S.-China relations and to American power itself is
probably not that China will rise too far, too fast; it is that the current crisis might end China's
growth miracle. In the worst-case scenario, the turmoil in the international economy will
plunge China into a major economic downturn . The Chinese financial system will
implode as loans to both state and private enterprises go bad. Millions or even tens of
millions of Chinese will be unemployed in a country without an effective social safety net.
The collapse of asset bubbles in the stock and property markets will wipe out the savings of a
generation of the Chinese middle class. The political consequences could include
dangerous unrest--and a bitter climate of anti-foreign feeling that blames others for
China's woes. (Think of Weimar Germany, when both Nazi and communist politicians
blamed the West for Germany's economic travails.) Worse, instability could lead to a vicious
cycle, as nervous investors moved their money out of the country, further slowing growth and, in
turn, fomenting ever-greater bitterness. Thanks to a generation of rapid economic growth,
China has so far been able to manage the stresses and conflicts of modernization
and change; nobody knows what will happen if the growth stops . India's future is also
a question. Support for global integration is a fairly recent development in India, and many
serious Indians remain skeptical of it. While India's 60-year-old democratic system has
resisted many shocks, a deep economic recession in a country where mass poverty and
even hunger are still major concerns could undermine political order, long-term
growth, and India's attitude toward the U nited States and global economic
integration. The violent Naxalite insurrection plaguing a significant swath of the country
could get worse; religious extremism among both Hindus and Muslims could
further polarize Indian politics; and India's economic miracle could be nipped in the bud. If
current market turmoil seriously damaged the performance and prospects of India and
China, the current crisis could join the Great Depression in the list of economic
events that changed history, even if the recessions in the West are relatively short
and mild. The United States should stand ready to assist Chinese and Indian financial
authorities on an emergency basis--and work very hard to help both countries escape or at least
weather any economic downturn. It may test the political will of the Obama administration, but
the United States must avoid a protectionist response to the economic slowdown. U.S. moves to
limit market access for Chinese and Indian producers could poison relations for years. For
billions of people in nuclear-armed countries to emerge from this crisis believing
either that the United States was indifferent to their well-being or that it had profited
from their distress could damage U.S. foreign policy far more severely than any mistake
made by George W. Bush. It's not just the great powers whose trajectories have been affected
by the crash. Lesser powers like Saudi Arabia and Iran also face new constraints. The crisis has
strengthened the U.S. position in the Middle East as falling oil prices reduce Iranian influence
and increase the dependence of the oil sheikdoms on U.S. protection. Success in Iraq--however
late, however undeserved, however limited--had already improved the Obama administration's
prospects for addressing regional crises. Now, the collapse in oil prices has put the Iranian
regime on the defensive. The annual inflation rate rose above 29 percent last September, up from
about 17 percent in 2007, according to Iran's Bank Markazi. Economists forecast that Iran's real
GDP growth will drop markedly in the coming months as stagnating oil revenues and the
continued global economic downturn force the government to rein in its expansionary fiscal
policy. All this has weakened Ahmadinejad at home and Iran abroad. Iranian officials must
balance the relative merits of support for allies like Hamas, Hezbollah, and Syria against
domestic needs, while international sanctions and other diplomatic sticks have been made more
painful and Western carrots (like trade opportunities) have become more attractive. Meanwhile,
Saudi Arabia and other oil states have become more dependent on the United States for
protection against Iran, and they have fewer resources to fund religious extremism as they use
diminished oil revenues to support basic domestic spending and development goals. None of this
makes the Middle East an easy target for U.S. diplomacy, but thanks in part to the economic
crisis, the incoming administration has the chance to try some new ideas and to enter
negotiations with Iran (and Syria) from a position of enhanced strength. Every crisis is
different, but there seem to be reasons why, over time, financial crises on balance reinforce
rather than undermine the world position of the leading capitalist countries. Since capitalism first
emerged in early modern Europe, the ability to exploit the advantages of rapid economic
development has been a key factor in international competition. Countries that can encourage--or
at least allow and sustain--the change, dislocation, upheaval, and pain that capitalism often
involves, while providing their tumultuous market societies with appropriate regulatory and
legal frameworks, grow swiftly. They produce cutting-edge technologies that translate into
military and economic power. They are able to invest in education, making their workforces ever
more productive. They typically develop liberal political institutions and cultural norms that
value, or at least tolerate, dissent and that allow people of different political and religious
viewpoints to collaborate on a vast social project of modernization--and to maintain political
stability in the face of accelerating social and economic change. The vast productive capacity of
leading capitalist powers gives them the ability to project influence around the world and, to
some degree, to remake the world to suit their own interests and preferences. This is what the
United Kingdom and the United States have done in past centuries, and what other capitalist
powers like France, Germany, and Japan have done to a lesser extent. In these countries, the
social forces that support the idea of a competitive market economy within an appropriately
liberal legal and political framework are relatively strong. But, in many other countries where
capitalism rubs people the wrong way, this is not the case. On either side of the Atlantic, for
example, the Latin world is often drawn to anti-capitalist movements and rulers on both the right
and the left. Russia, too, has never really taken to capitalism and liberal society--whether during
the time of the czars, the commissars, or the post-cold war leaders who so signally failed to build
a stable, open system of liberal democratic capitalism even as many former Warsaw Pact nations
were making rapid transitions. Partly as a result of these internal cultural pressures, and partly
because, in much of the world, capitalism has appeared as an unwelcome interloper, imposed by
foreign forces and shaped to fit foreign rather than domestic interests and preferences, many
countries are only half-heartedly capitalist. When crisis strikes, they are quick to decide that
capitalism is a failure and look for alternatives. So far, such half-hearted experiments not only
have failed to work; they have left the societies that have tried them in a progressively worse
position, farther behind the front-runners as time goes by. Argentina has lost ground to Chile;
Russian development has fallen farther behind that of the Baltic states and Central Europe.
Frequently, the crisis has weakened the power of the merchants, industrialists, financiers, and
professionals who want to develop a liberal capitalist society integrated into the world. Crisis
can also strengthen the hand of religious extremists, populist radicals, or authoritarian
traditionalists who are determined to resist liberal capitalist society for a variety of reasons.
Meanwhile, the companies and banks based in these societies are often less established and more
vulnerable to the consequences of a financial crisis than more established firms in wealthier
societies. As a result, developing countries and countries where capitalism has relatively recent
and shallow roots tend to suffer greater economic and political damage when crisis strikes--as,
inevitably, it does. And, consequently, financial crises often reinforce rather than challenge the
global distribution of power and wealth. This may be happening yet again. None of which
means that we can just sit back and enjoy the recession. History may suggest that financial
crises actually help capitalist great powers maintain their leads--but it has other, less
reassuring messages as well. If financial crises have been a normal part of life
during the 300-year rise of the liberal capitalist system under the Anglophone powers, so
has war. The wars of the League of Augsburg and the Spanish Succession; the Seven
Years War; the American Revolution; the Napoleonic Wars; the two World Wars;
the cold war: The list of wars is almost as long as the list of financial crises. Bad economic
times can breed wars. Europe was a pretty peaceful place in 1928, but the
Depression poisoned German public opinion and helped bring Adolf Hitler to power. If
the current crisis turns into a depression, what rough beasts might start slouching toward
Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet,
decline, but, if we can't get the world economy back on track, we may still have to
fight.
Economic decline makes all conflicts worse quickly.

Tilford 8 [Dr. Earl Tilford, a fellow with the Center for Vision and Values, who resides in Tuscaloosa,
Alabama where he is working on a history of the University of Alabama in the mid to late 1960s. He holds
a PhD in history from George Washington University and served for thirty-two years as a military officer
and analyst with the Air Force and Army. From 2001 until May 2008, Dr. Tilford taught history at Grove
City College. Craig, Executive Editor of NJN Publishing, Critical Mass: Economic leadership or
dictatorship, October 14, 2008,
http://www.nj.com/cranford/index.ssf/2008/10/critical_mass_economic_leaders.html]
A global economic collapse will also increase the chance of global conflict. As
economic systems shut down, so will the distribution systems for resources like
petroleum and food. It is certainly within the realm of possibility that nations perceiving
themselves in peril will, if they have the military capability, use force, just as Japan
and Nazi Germany did in the mid-to-late 1930s. Every nation in the world needs access
to food and water. Industrial nations -- the world powers of North America, Europe, and
Asia -- need access to energy. When the world economy runs smoothly, reciprocal
trade meets these needs. If the world economy collapses, the use of military
force becomes a more likely alternative. And given the increasingly rapid rate at
which world affairs move; the world could devolve to that point very quickly.
Economic decline causes nuclear war

Sean ODonnell Staff Writer, Baltimore Examiner, B.A. in History from the University of ,Maryland
2/26/09, Will this recession lead to World War II, http://www.examiner.com/x-3108-Baltimore-Republican-
Examiner~y2009m2d26-Will-this-recession-lead-to-World-War-III
Could the current economic crisis affecting this country and the world lead to
another world war? The answer may be found by looking back in history. One of the
causes of World War I was the economic rivalry that existed between the nations
of Europe. In the 19th century France and Great Britain became wealthy through colonialism
and the control of foreign resources. This forced other up-and-coming nations (such as
Germany) to be more competitive in world trade which led to rivalries and ultimately, to war.
After the Great Depression ruined the economies of Europe in the 1930s, fascist
movements arose to seek economic and social control. From there fanatics like
Hitler and Mussolini took over Germany and Italy and led them both into World
War II. With most of North America and Western Europe currently experiencing
a recession, will competition for resources and economic rivalries with the
Middle East, Asia, or South American cause another world war? Add in nuclear
weapons and Islamic fundamentalism and things look even worse. Hopefully the
economy gets better before it gets worse and the terrifying possibility of World
War III is averted. However sometimes history repeats itself.
A2: Kills the Environment
Emissions are becoming decoupled from growth flat lining and starting to fall now
Romm 15 (Joe Romm, Ph.D in Physics from MIT, worked at the Scripps Institution of Oceanography,
Fellow of the American Association for the Advancement of Science, former Acting Assistant Secretary of
the U.S. Department of Energy, awarded an American Physical Society Congressional Science Fellowship,
executive director of Center for Energy and Climate Solutions, former researcher at the Rocky Mountain
Institute, former Special Assistant for International Security at the Rockefeller Foundation, taught at
Columbia University's School of International and Public Affairs, Senior Fellow at the Center for American
Progress, Record First: Global CO2 Emissions Went Flat In 2014 While The Economy Grew, 3/13/15)
http://thinkprogress.org/climate/2015/03/13/3633362/iea-co2-emissions-decouple-growth/
Energy-related carbon dioxide emissions flatlined globally in 2014, while the world economy grew. The
International Energy Agency reports that this marks the first time in 40 years in which there was a halt or
reduction in emissions of the greenhouse gas that was not tied to an economic downturn. The IEA
attributes this remarkable occurrence to changing patterns of energy consumption in China and OECD
countries. As we reported last month, China cut its coal consumption 2.9 percent in 2014, the first drop
this century. China is aggressively embracing energy efficiency, expanding clean energy, and shuttering the
dirtiest power plants to meet its planned 2020 (or sooner) peak in coal use. As a result, Chinese CO2
emissions dropped 1 percent in 2014 even as their economy grew by 7.4 percent. At the same time, the
Financial Times points out In the past five years, OECD countries economies grew nearly 7 percent while
their emissions fell 4 percent, the IEA has found. A big part of that is the United States, where fuel
economy standards have reversed oil consumption trends and renewable energy, efficiency, and natural
gas have cut U.S. coal consumption. All this provides much-needed momentum to negotiators preparing to
forge a global climate deal in Paris in December, explained IEA Chief Economist Fatih Birol, who was
just named the next IEA Executive Director. For the first time, greenhouse gas emissions are decoupling
from economic growth. CO2vsGDP CREDIT: IEA, FINANCIAL TIMES The IEA notes that in 40 years
of CO2 data collection, the three previous times emissions have flatlined or dropped from the prior year
all were associated with global economic weakness: the early 1980s [due to the oil shock and U.S.
recession]; 1992 and 2009. Remember the pre-Paris pledges we already have: China to peak in CO2
emission by 2030 (or, likely, sooner), EU to cut total emissions 40 percent below 1990 levels by 2030, and
U.S. to cut net greenhouse gas emissions 26-28 percent below 2005 levels by 2025. That means there is a
very real prospect for a game-changing global deal coming out of Paris this year. Such a deal would not
will not get us onto the 2C pathway, as Christiana Figueres, the top UN climate official, and others have
explained. But it would get us off the catastrophic 6C path and lead to a permanent decoupling of GDP
and CO2. And that would give the next generation a realistic chance at coming close to a 2C path in the
2020s and 2030s. Thats when stronger action will become more viable as it becomes harder to deny the
painful reality of just how dire our situation is and as the sped-up deployment of clean energy required
for countries to meet Paris commitments make achieving 2C even more super-cheap.
China has committed to game changing new coal and carbon caps
Romm 15 (Joe Romm, Ph.D in Physics from MIT, worked at the Scripps Institution of Oceanography,
Fellow of the American Association for the Advancement of Science, former Acting Assistant Secretary of
the U.S. Department of Energy, awarded an American Physical Society Congressional Science Fellowship,
executive director of Center for Energy and Climate Solutions, former researcher at the Rocky Mountain
Institute, former Special Assistant for International Security at the Rockefeller Foundation, taught at
Columbia University's School of International and Public Affairs, Senior Fellow at the Center for American
Progress, China To Cap Coal Use By 2020 To Meet Game-Changing Climate, Air Pollution Targets,
11/19/15) http://thinkprogress.org/climate/2014/11/19/3593567/china-climate-target-peak-coal-2020/
The Chinese government announced Wednesday it would cap coal use by 2020. The Chinese State Council,
or cabinet, said the peak would be 4.2 billion tonnes, a one-sixth increase over current consumption. This is
a staggering reversal of Chinese energy policy, which for two decades has been centered around building a
coal plant or more a week. Now theyll be building the equivalent in carbon-free power every week for
decades, while the construction rate of new coal plants decelerates like a crash-test dummy. The 2020 coal
peak utterly refutes the GOP claim that Chinas recent climate pledge requires the Chinese to do nothing at
all for 16 years. Indeed, independent analyses make clear a 2020 coal peak announcement was the
inevitable outcome of Chinas game-changing climate deal deal with the U.S. last week, where China
agreed to peak its total carbon pollution emissions in 2030 or earlier. We already knew that Chinas
energy commitment to increase the share of non-fossil fuels in primary energy consumption to around
20% by 2030 was going to require a staggering rate of deployment for carbon free energy. It means adding
some 800-1,000 gigawatts of zero-carbon power in 16 years, which, the White House notes, is more than
all the coal-fired power plants that exist in China today and close to total current electricity generation
capacity in the United States. The CO2 and energy pledge together mean their energy revolution must start
now and the planning for it must have started already, which it clearly has (a study from Chinas National
Coal Association earlier this year projected a 2020 coal peak). Thats because a CO2 peak in 2030 or (more
likely) a few years earlier (see below), essentially required Chinese coal use to peak around 2020. Why?
Large-scale coal power generation already has multiple commercial carbon-free alternatives solar, wind,
nuclear, hydro, and so on but large-scale oil-based transportation has far fewer. Put another way, it is
much less expensive for a still-developing country to peak coal use than it is to peak oil use or natural
gas use, for that matter, especially since some of the coal will be replaced with gas. Indeed Tuesday,
Reuters interviewed a leading Chinese energy expert about what China must do to meet CO2 and air
pollution targets: Su Ming, a researcher with the Energy Research Institute (ERI), run by Chinas National
Development and Reform Commission, said while peak coal needed to come in 2020, industrialized
eastern regions needed to start to cut consumption earlier if targets were to be met. Beijing [province]
alone would need to cut coal use by 99 percent to below 200,000 tonnes by 2030, ERI said. A peak in coal
use in 2020 is also what an analysis by MIT and Beijings Tsinghua University finds for a peak in total CO2
emissions sometime from 2025 to 2030. That analysis is a joint project between the MIT Program on the
Science and Policy of Global Change and the Institute for Energy, Environment and Economy at Tsinghua
University in Beijing. Tsinghua and MIT model three scenarios No Policy, where emissions keep rising
for decades Continued Effort, where CO2 plateaus around 2035, and Accelerated Effort, who CO2 peaks
around 2025-2030. Total Chinese CO2 emissions in 3 scenarios. Via Total Chinese CO2 emissions in 3
scenarios. Via Tsinghua-MIT 2014. These scenarios are slightly misnamed. Yes, the No Policy case
assumes no energy or climate policies are implemented from 2010 onwards but, as in all scenarios we
assume that energy prices are determined by the market in future periods, representing a retreat from
remaining controls on energy prices, specifically, prices for natural gas, gasoline, diesel, and electricity.
The historic lack of market prices has led to overconsumption of all forms of energy, so this case assumes
significant energy pricing reforms. The Continued Effort scenario assumes considerably more than just a
continuation of recent efforts to expand carbon-free power. For instance, it requires requires a modest and
slowly rising CO2 price (or its equivalent): The CO2 charge that supports this goal reaches $26/ton CO2
in 2030 and $58/ton CO2 in 2050. Finally, in the Accelerated Effort case the one closest to Chinas new
pledge the carbon tax rises from $38/ton CO2 in 2030 to $115/ton CO2 in 2050, a very serious carbon
charge, comparable to the one the U.S. will need to meet post-2025 targets needed to stabilize temperatures
at non-catastrophic levels. This case also assumes a higher resource tax on coal. And so coal consumption
peaks around 2020: Chinese energy demand in 3 scenarios, with the primary energy mix shown for the
Accelerated Effort scenario. Via Chinese energy demand in 3 scenarios, with the primary energy mix
shown for the Accelerated Effort scenario. Via Tsinghua-MIT 2014. As an important caveat, all such
projections of future energy demand and production by energy type are based on multiple assumptions,
including the rate of technological progress. So different models show different results, and I will report on
other studies as they are released. Based on my experience with and analysis of solar, wind, and other
renewables (as well as historical trends toward high and rising nuclear plant construction costs), I suspect
that China will, for instance, deploy vastly more solar power than is modeled here. Thats especially true
when you include concentrated solar thermal power, which can easily be designed with low-cost storage.
Will the Chinese meet or even beat their target? Yes, for four reasons. First, as Obama senior adviser John
Podesta explains on Charlie Rose (video here), it is very hard to get China to make such major public
commitments, but once they do, they are all in. Second, what the deniers and doubters dont get is that
climate change is going to get more and more painfully obvious in the coming years. Jump head to the
early 2020s, and all the nations of the world, including China, will be close to desperate to make even
deeper reductions. By the end of the 2020s, the entire world will be desperate. Moreover, Chinese leaders
already accept and understand the reality of climate science more than most thats one reason they made
such an unprecedented commitment to reverse decades of energy policy in the first place. Third, China has
a major public health and domestic political motivation to peak coal ASAP. Their urban air pollution levels
are catastrophic. Su Ming told Reuters, We are trying to tell provincial officials how much coal they could
use under a restricted nationwide quota. That would mean the big consuming regions of Hebei, Tianjin
and Shandong would have to cut coal use by up to 27 percent by 2030. The fourth reason the Chinese will
meet and likely beat their CO2 commitment is that they know it can be done and that doing so will
not only be critical to maintaining their political influence worldwide, but to their ongoing leadership in
solar, wind, batteries, electric cars, and the other key job-creating industries of the future. Thats what their
analysis shows, and thats what other analyses show, such as the Tsinghua-MIT work. Remember, Chinese
President Xi Jinping himself joined Obama in the U.S.-China Joint Announcement that China intends to
achieve the peaking of CO2 emissions around 2030 and to make best efforts to peak early. Now why
would China tell the whole world on the biggest stage imaginable it was going to make best efforts to peak
early if they didnt have confidence that they could and would peak before 2030? Failure to peak early
would show the best efforts of the Chinese failed. That is not how China rolls! Melanie Hart, the Director
for China Policy at the Center for American Progress, told me this week: Personally, I expect China can
probably peak a bit earlier than 2030 with truly aggressive policy action, and the language in the joint
announcement reflects that. My sense is that Chinas current peak commitment is as far as they could
feasibly go with the data they have in-hand as of now. As more data comes in and they near the end of the
12th five-year plan (2011-2015), they are likely to become even more ambitious. It is a very good thing that
they left space for even more ambition on the peak. BOTTOM LINE: Chinas game-changing deal with the
United States is already dramatically changing their energy policy and their emissions trajectory, as is clear
from the 2020 coal cap. Also, it greatly boosts chances for a global climate deal and ensures the triumph of
non-carbon energy, especially renewables, over fossil fuels, starting with coal. China has every incentive to
beat their targets, and the smart money says they will
A2: Kills the Environment Tech Turn
Economic growth results in strong tech sector

West 11 (Darrell M, Vice President and Director, Governance Studies, Founding Director, Center for
Technology Innovation, Technology and the Innovation Economy, Brookings,
http://www.brookings.edu/research/papers/2011/10/19-technology-innovation-west, October 11th 2011,
accessed 7/17/15, ASX)
Researchers have found a link between technology innovation and national

economic prosperity. For example, a study of 120 nations between 1980 and 2006
undertaken by Christine Qiang estimated that each 10 percentage point increase in
broadband penetration adds 1.3 percent to a high income countrys gross domestic
product and 1.21 percent for low to middle-income nations.[i] In addition, Taylor Reynolds has
analyzed the role of communication infrastructure investment in economic recoveries among OECD countries and found that
nearly all view technology development as crucial to their economic stimulus
packages.[ii] He demonstrates that there is a strong connection between
telecommunication investment and economic growth, especially following recessions.
These kinds of investments help countries create jobs and lay the groundwork for
long-term economic development. As a result, many nations around the world are
investing in digital infrastructure as a way to jump-start economies weakened by the
recent financial collapse. The decline in stock market valuations, rise in unemployment, and reduction in overall
economic growth has highlighted the need to target financial resources and develop national priorities. In conditions of economic
scarcity, countries no longer have the luxury of being passive and reactive. Instead, they must be proactive and forward-looking, and
think clearly about how to create the basis for sustainable economic recoveries. Not surprisingly, given its long-term potential, a
number of countries have identified information technology as a crucial
infrastructure need for national development. Broadband is viewed in many places as a way to stimulate
economic development, social connections, and civic engagement. National leaders understand that cross-
cutting technology speeds innovation in areas such as health care, education,
communications, and social networking. When combined with organizational
changes, digital technology can generate powerful new efficiencies and economies of
scale.[iii]
Strong tech sector solves social and environmental issues
SDN 13 (Science Development Net, a not-for-profit organization that produces news, views and analysis on
information about science and technology for global development, Tech firms set sail to solve world's
problems through innovation, http://www.scidev.net/global/innovation/news/tech-firms-set-sail-to-solve-
world-s-problems-through-innovation.html, Febuary 15th 2013, accessed 7/17/15, ASX)
Eleven start-up firms with novel technologies for solving social and environmental
problems have set off on a voyage around the world to find new markets where their
innovations could improve people's lives. Several technology companies from the developing world are also
on board MV Explorer, which set sail last month (9 January) from San Diego, United States. The founder of the project, Daniel
Epstein, tells SciDev.Net that the 13
countries being visited during the 100-day voyage are
booming entrepreneurial hubs or have underdeveloped markets. His objective is to
help scale up technologies dedicated to solving social and environmental challenges.
"On the environmental side, we have the world's most-efficient solar concentrator
on the ship, the world's most-efficient charcoal cooking stove in emerging markets, a company that is currently
providing clean drinking water to more than 300,000 people every day across five
countries and another that is using nanotechnology to profitably sequester carbon
out of the atmosphere," Epstein tells SciDev.Net. Deaftronics is one of the 11 firms on board. The Botswana-based
company manufactures solar-powered hearing aids, called Solar Ears. Tendekayi Katsiga, the firm's co-founder tells SciDev.Net that
he likes the idea of having entrepreneurs involved in the project, which he sees as a platform to exchange ideas. "It is giving us an
international exposure on how to run a self-sustainable business. Addedto that are networking, marketing
and distribution, and an opportunity to establish international relations and
investments. It will help scale up our operations," Katsiga tells SciDev.Net. Damascus Fortune, based in
Mumbai, India, is another company that was selected for the voyage. The firm's technology
converts carbon emissions from industry and vehicles into carbon nanostructures
that can be used to construct cars, buildings, laptops and mobile phones . "It's an excellent
experience because we are interacting with mentors who help us design our business models," Venkatesan K. R., the company's chief
operating officer, tells SciDev.Net. The project is collaboration between the Unreasonable Institute, which provides residential support
to potentially world-changing entrepreneurs; the Institute of Design at Stanford University in the United States; and the Semester at
Sea programme, a study-abroad initiative run on a ship as it sails around the world.
Innovated information and communications technology reduces CO2 emissions

Matsumura and Lewis 15 (Toyoaki, Sustainability Project Manager at Fujitsu, A specialist in
sustainability policy and strategy, focused on finding ways to apply ICT to reduce societys environmental
impact. He holds a Masters in Environmental Policy, Andy, Chief Architect for Sustainability at Fujitsu, an
experienced systems architect whose interest in environmental matters led him to move into the field of
ICT sustainability several years ago. He has a particular focus on environmental impact measurement
methodologies, The Power of ICT to solve global sustainability issues, 2015, accessed 7/17/15, ASX)
Technology can be applied in many often very innovative ways to solve

environmental problems in a wide range of situations and industry sectors. The Global e-
Sustainability Initiative (GeSI) was the first organization to provide credible estimates of the huge potential of ICTs enablement
effects. GeSIs
2008 report SMART 2020: Enabling the low carbon economy in the
information age looked at how ICT could significantly reduce emissions in various
sectors, and quantified these reductions in terms of carbon dioxide equivalent
(CO2e) emissions savings and cost savings by 2020. In 2012, GeSI published a
follow-up report called SMARTer 2020: The Role of ICT in Driving a Sustainable
Future, which found that ICT could be used to reduce global CO2e emissions by
16.5%, or 9.1 gigatons of CO2e, by 2020. This is seven times the emissions that ICT
currently produces, and would be equivalent to a US$1.9 trillion saving in gross
energy and fuel costs. SMARTer 2020 also analyzed ICTs emissions-reduction potential in seven countries Brazil,
Canada, China, Germany, India, the UK and the US and provided recommendations to policy-makers on strategies for realizing that
potential. In SMARTer 2020, GeSI identified a range of ICT solutions that could
significantly reduce carbon emissions in six sectors: Agriculture, building,
manufacturing, power, service and consumer, and transportation. GeSI also
identified four change levers that categorize the different ways ICT can benefit the
environment, particularly in relation to reducing energy consumption and greenhouse gas (GHG) emissions. These change
levers are: Digitalization and dematerialization: Substituting or eliminating the need for an emissions-intensive
product or process. Data collection and communication: Real-time data analysis and communication, feedback
and learning to enable better decision-making. System integration: Managing the use of resources. Process,
activity and functional optimization: Improving efficiency through simulation, automation, redesign or control.
Advanced tech companies create environmentally safe communities Saudi Arabia
proves
Matsumura and Lewis 15 (Toyoaki, Sustainability Project Manager at Fujitsu, A specialist in
sustainability policy and strategy, focused on finding ways to apply ICT to reduce societys environmental
impact. He holds a Masters in Environmental Policy, Andy, Chief Architect for Sustainability at Fujitsu, an
experienced systems architect whose interest in environmental matters led him to move into the field of
ICT sustainability several years ago. He has a particular focus on environmental impact measurement
methodologies, The Power of ICT to solve global sustainability issues, 2015, accessed 7/17/15, ASX)
Rapid industrialization in Saudi Arabia is creating serious environmental problems,

such as air and water pollution. Fujitsu is working with the Saudi Industrial
Property Authority (MODON) to build a monitoring system that uses sensors to
measure air and water quality, in order to constantly monitor environmental
pollution. The new system will be installed in the Dammam 2nd Industrial City in the Eastern Province, the Riyadh 2nd
Industrial City in the Saudi Capital and the Jeddah 1st Industrial City on the west coast. The diagram below illustrates how the system
monitors a variety of pollutants, and analyzes data to inform environmental initiatives. Aizu Wakamatsu City Hall and Tohoku Electric
Power Co., Inc. have launched the Aizu Wakamatsu Area Smart Community Promotion Project with assistance from Fujitsu. This
project aims to create a smart community in the Aizu Wakamatsu region of
Fukushima Prefecture. The three organizations have explored ways to build a smart
community that is environmentally friendly and low carbon. The project aims to
revitalize the local community, generate new businesses, and pioneer the creation of
an urban environment that is highly resistant to disaster and convenient for
residents. The organizations aim to create a smart community by establishing a
foundation for generating and using renewable energy in a self-sufficient manner.
Going forward, the organizations will make efforts to deploy the technology throughout Fukushima Prefecture, thereby contributing to
the rebuilding of the region.
Internet Economy Bad
Short Termism Turn
The internet economy fuels short-terminism on behalf of investors and neglects

long-term products necessary for a strong economy
Stewart 15 (Heather Stewart, the Observer's economics editor, Why bite-size thinking is as bad for the
economy as it may be for our brains, 3/1/2015, The Guardian,
http://www.theguardian.com/politics/2015/mar/01/long-term-thinking-investment-internet-age, DJE)
Delayed gratification: its an important life skill we try to teach our children when they want that tooth-
rotting treat right now. With good reason: the famous marshmallow experiment at Stanford University
showed kids that chose to wait a few minutes and get two sweets, instead of gobbling up one immediately,
were brighter and more successful more than a decade later. Yet in grown-up, economic life, patience
has gone way out of fashion. Facebook boss Mark Zuckerbergs recent epiphany about the virtues of
books may have been close to parody; but it underlined the fact that in a world in which we carry our own
constantly changing kaleidoscope of gossip, gags and cat videos on our phones (or even our wrists or our
glasses), investing the time necessary to absorb an entire book can seem disproportionate. Attention is at a
premium. There is even debate about whether this constant diet of bite-sized chunks of information will
eventually rewire our brains, leaving us ill-equipped for the slow thinking that Nobel-laureate Daniel
Kahneman says makes for better decision-making. This matters not just because great novels are some of
our most sparkling cultural treasures not to mention repositories of vital life wisdom but because
patience may well be necessary for nurturing human progress. In a fascinating and typically wide-ranging
recent speech, the Bank of Englands chief economist, Andy Haldane, warned that the erosion of
patience in the internet age may undermine the cultural conditions for innovation.
Haldane pointed out that some economic theories see technological progress the invention of the spinning
jenny and the steam engine, for example as essentially exogenous, or external, popping up in their
creators minds in a series of eureka moments. But another approach, the post-neoclassical endogenous
growth theory Ed Balls was once mocked for mentioning, suggests that the conditions for progress are, as
much sociological as technological skills and education, culture and cooperation, institutions and
infrastructure. These factors are mutually supporting and they build in a cumulative, evolutionary
fashion, rather than spontaneously combusting. Haldanes worry is that if the technological
maelstrom is leaving us ill-equipped for slow, deep thinking, our ability to build
future prosperity may be fatally undermined, increasing the risk of what economists
call secular (long-term) stagnation. Short-termism may indeed have been exacerbated by the
internet age; but it has arguably been a bugbear of UK plc for much longer. Investment, both private
and public, as a proportion of GDP a reasonable measure of willingness to wait for
future returns, as well as a pointer to future productivity growth has been low by
international standards since at least the 1970s. As the LSEs Growth Commission put it:
Problems of underinvestment are not confined to capital in the classic sense: they cut across aspects of
skills, infrastructure and innovation. The reasons for this are both institutional, and cultural. UK investors,
even the pension funds that need steady returns over decades, not months, tend to
channel their funds through a City still dominated by quarterly reporting. Banks
are more effective at pouring cash into property speculation than at backing
innovators that may take years to bring a product to market, a decade to turn a
profit. Venture capitalists tend to look for a return over three to five years, not 10.
Short Termism Ext.
The internet economy encourages a get-in-and-cash-out mindset rather than

growing sustainable businesses
Faw 12 (Larissa Faw, contributor, Are Millennial Internet Entrepreneurs Hurting The Economy?,
8/31/2012, Forbes, http://www.forbes.com/sites/larissafaw/2012/08/31/are-millennial-internet-
entrepreneurs-hurting-the-economy/, DJE)
Every day, some start-up company founded by a Millennial entrepreneur gets

purchased for millions of dollars. And as a result, yet another Millennial millionaire is born. These
ambitious Millennials are applauded, lauded, and hailed as innovators all before they spot their first grey
hair. Now, name an entrepreneur old enough for an AARP card who is revolutionizing the Internet? IACs
Barry Diller is the most familiar and recognizable name. Anyone else? While my focus group of friends all
cited Diller, we then digressed into figuring out the ages of Twitters Biz Stone and Netflixs Reed
Hastings. And when a debate hinges on the lowest age criteria of the AARP, it demonstrates there may be
matter for further examination. (For the record, Stone is 38; Hastings is 51). Is it because media coverage
prefers to showcase Millennials that makes it seem as if only youngsters are involved in online startups? Or
are older people really less likely to helm these ventures? Well, there may be a good reason why there isnt
a 60-year-old counterpart to Mark Zuckerberg: Millennials and older individuals have different
expectations towards Internet entrepreneurship. Our entire economy is now one in which 84
million people want to be entrepreneurs, but the lions share simply cant because
entrepreneurship doesnt work the way it did 50 years ago, says Paul OBrien of
entrepreneurial network Cospace. Now, vastly over simplifying the challenge, you need a website. Most
[older individuals] cant do that. So you end up with a disproportionate number of exciting startups from
Millennials. We have a disproportionate percentage of Baby Boomers with capital to
invest in those startups but they dont understand how or where. Millennials define
online entrepreneurship in very broad terms. Their definition includes both the high school student who
develops an app to monitor his dog and Amazons Jeff Bezos with his billion-dollar e-commerce platform.
Millennial entrepreneurs often start by building fun and innovative widgets,
rather than thinking about forming long-lasting and tangible companies . The
experience isnt there to create corporations, says Cospaces OBrien. The
innovators are creating apps, widgets, and webservices; not Salesforce, eBay,
Google, GM, IBM, Ford Is there an exception to that? Sure, maybe Facebook. But thats one.
Why are they getting sold for millions of dollars? Because a local, social, mobile app that manages to get
100,000 users is more significant than anything else out there. This Millennial mindset to get in
and cash out is frustrating to older Internet entrepreneurs. Most media companies take
years to reach critical mass, says Internet mogul Alan Meckler. Millennials are not patient. They see
Instagram and think that is a media company and that one can net a billion [dollars] in two years. A media
company is built with solid and unspectacular blocking and tackling. There are very, very few Instagrams.
Meckler provides a unique perspective on this topic. He is one of the original Internet entrepreneurs,
acquiring the Internet.com domain name in 1997 before selling it for $18 million in 1998. He then sold his
second Internet company, JupiterImages, in 2009 to Getty Images for $96 million. Now, he is on his third
Internet venture, WebMediaBrands, which buys and then groups smaller business-to-business sites under
one umbrella. (He also owns the domain rights to www.iWorld.com.) The media business is pretty much
the same as it was 35 years ago. Delivery of information has changed, but not the nuts and bolts, says
Meckler. However, he says its now more difficult to build a sustainable business than in
his previous experiences because Millennials are less invested after he acquires their
brand. My game plan is to build media companies worth several hundred million,
not a mere $25 million. This build is being done with Millennials; some willing to stay the course, but
many [are] not. One has to give more breathing room to them for sure. Also, after a 26-year-old has put in
a few years they start to think it is time to move on or they might waste their life in one company, says
Meckler. Its uncertain what the future holds for the online entrepreneur community. Its unlikely
Millennials will stop developing apps and Internet innovations to focus on long-term, more tangible
business creation. At the same time, its unlikely older senior citizens will revert to designing apps with the
sole intent to sell to the highest bidder. OBrien, for his part, wants the two generations to meet in the
middle. We should be demanding that those Millennials and experienced Boomers connect with one
another so that the drive, innovation, and capability meets the experience, network, and capital to turn those
million dollar apps into billion dollar companies.
Investment Turn
Investment in over-hyped digital tech startups siphons capital from more promising
businesses
Kouzmine 13 (Sergei Kouzmine, the managing partner of QWave Capital, a venture fund focused on
investing in quantum technology and other SciTech innovation, Why VCs should stop investing in
Internet startups and start investing in tech, 12/17/2013, Venture Beat,
http://venturebeat.com/2013/12/17/vc-risk-technology/, DJE)
What do photo sharing, social networking, and mobile payments have in common? They
represent hot trends that VCs have piled onto in recent years without regard for
how small these markets really are. Put plainly, theres only room for a few
(successful) photo sharing apps in the world. Yet weve watched it happen again and again.
When Groupon took off, up sprang LivingSocial, then Bloomspot. Before you could
blink, every VC firm in Silicon Valley had the daily deals space checked off on its portfolio. We all know
how that turned out. This herd mentality is siphoning capital from more promising start-
ups and sandbagging the creativity for which Silicon Valley and the startup scene
more broadly has long been known. Venture capitalists have become so risk-averse, it seems
theyve forgotten that risk-taking is the whole point of their jobs. I have actually heard investors claim that
if someone is able to sell them on a company, then they should be able to sell it to anyone. The problem
with this line of logic is that it focuses more on the pitch that is, the sales and marketing
hype than it does on the actual substance of a startup, or more importantly, its
product. In fact, rather than rushing in headlong, VCs should approach hot areas with extra caution. And
instead of seeking out copycat startups to add to their own portfolios, VCs should actively research the
landscape and seek to build a unique, thoughtful, and nuanced perspective on the industry current and
future. The best way to accomplish this is to spend time with academics, scientists, and
research centers the places where the real, down-and-dirty innovation is
happening. Investors should also have, or hire people who have, a strong background in technology and
science. This way they will be able to intelligently recognize and track major breakthroughs as they move
from abstract concepts to real-world applications. I like to think of this approach as proactive investing.
Proactive investing gives VCs a competitive advantage because, by employing a combination of research,
connections, and proprietary knowledge, VCs have can pursue interesting areas and companies that others
havent noticed yet. In order to become more proactive, VCs should step back and examine the
wider technology landscape. Doing so will make it clear that what I will broadly term the
Internet investment sphere (encompassing everything from consumer apps to enterprise software as
a service) has become overripe in the last few years. In fact, in Q3 of this year, Internet
investment was up 17 percent compared to the same period last year the highest
growth levels since the dot-com bubble burst. Of course, this doesnt happen in a vacuum. One
explanation for the herd mentality were witnessing lies in our natural distrust of things we dont
understand. Internet and computing is relatively easy to understand, even for outsiders and
those without deep tech knowledge. Certainly its much easier to bring up mobile payments at a cocktail
party than to delve into nanotechnology. Its no wonder that the former garners more buzz, even if the
latter wields more potential to transform our world. But Internet tech is just one sector of a much larger
technological field. On its own, the Internet cant solve all of the problems, or satisfy all of the needs, of
humanity. As one of my friends once put it, Social media can warn you that an asteroid is barreling
towards the earth, but it cant do anything to stop it.
A2: Leads to Spillovers/Growth
The internet economys business model fails and only benefits a small group of
entrepreneurs
Young and Hobson 15 (Robin Young and Jeremy Hobson, WBUR radio show hosts, this article is a
summary of an interview with Andrew Keen, a Sillicon Valley entrepreneur, Is The Internet Hurting More
Than Helping?, 3/16/2015, WBUR.org, http://hereandnow.wbur.org/2015/03/16/internet-economics-keen,
DJE)
Andrew Keen works in Silicon Valley and founded a couple of start-ups, but hes not sold on the Internet.
In his latest book The Internet Is Not The Answer, Keen makes the case that the Internet as it exists
now hurts the middle class. The economics of the Internet lend themselves of a
winner-take all economy, Keen tells Here & Nows Jeremy Hobson, The hollowing out of
the middle class, the emergence of a tiny plutocratic elite of Silicon Valley
entrepreneurs and technologists. Interview Highlights: Andrew Keen On why the Internet isnt
the answer The Internet isnt the answer because it compounds three of the fundamental
problems of early 21st century life: inequality, unemployment, and the emergence of
a surveillance culture, a surveillance economy. I dont buy this leveling of the playing field
argument. You could go out and buy a lottery ticket and everyone has that opportunity. In that sense, theres
a level playing field, but the reality [is that] out of every million people who buy a lottery ticket, only one
will be the winner, and thats the same with a digital economy. Its a winner take all economy in
which a tiny group of companies are dominant. Its doing away with much of the
competition of the industrial age, hollowing out the middle. So, I dont buy this idea that
its flattening things out. If anything, this world is much rockier, much more mountainous that the old 20th
century industrial world. On why he still believes in the Internet I havent soured on the Internet. I still
live in Silicon Valley. Im still very close to a lot of technology companies. I even have my own start-up in
the valley called Future Cars. Im simply skeptical about some of the more idealistic claims of the original
Internet evangelists who claim democratization, egalitarianism, and all the rest of the things which havent
happened. And actually in my book, I quote a lot of people who have been very involved in the Internet
revolution guys like Mike Moritz and Fred Wilson, investors, winners in this economy, who are as
worried as I am about monopoly, about surveillance, about bullying. I think there is a feeling, generally, in
Silicon Valley that this revolution has gone wrong. It doesnt mean that we go back to the certainties of the
analog age. We cant turn time backwards, but we have to acknowledge that there are severe structural
problems with the revolution. On what needs to change One thing we could certainly have
avoided is the free business model. I think when we buy our tea in the morning,
when we buy our clothing, when we buy our gas for our cars we exchange cash, and
I think thats one of the fundamental problems with the contemporary Internet is
that the business model doesnt work. It doesnt really work, ultimately, for us and
that needs to be re-thought. I think the better Internet really comes down to
economics. We need to come up with business models which reward creative people,
which enable creative people to earn a real living. I think was is concrete is that
entrepreneurs out there, start-up people, need to come up with business models which reward artists, which
will encourage people to produce their best work. I still think that theres a great appetite for quality
journalism, quality photographs, quality music and movies, but at the moment we dont have platforms that
are able to reward artists for that. We have the beginnings. We have Netflix. We have Spotify. Maybe
Netflix is an example of an internet platform which does reward quality.
Studies show that advances in computer technology do little for growth
Rotman 13 (David Rotman, editor, citing Erik Brynjolfsson, an MIT economics professor, How
Technology Is Destroying Jobs, 6/12/2013, MIT technology review,
http://www.technologyreview.com/featuredstory/515926/how-technology-is-destroying-jobs/, DJE)
http://www.technologyreview.com/featuredstory/515926/how-technology-is-destroying-jobs/
Given his calm and reasoned academic demeanor, it is easy to miss just how provocative Erik
Brynjolfssons contention really is. Brynjolfsson, a professor at the MIT Sloan School of Management, and
his collaborator and coauthor Andrew McAfee have been arguing for the last year and a half that
impressive advances in computer technologyfrom improved industrial robotics to automated
translation servicesare largely behind the sluggish employment growth of the last 10 to
15 years. Even more ominous for workers, the MIT academics foresee dismal prospects for
many types of jobs as these powerful new technologies are increasingly adopted not
only in manufacturing, clerical, and retail work but in professions such as law,
financial services, education, and medicine. That robots, automation, and software can replace
people might seem obvious to anyone whos worked in automotive manufacturing or as a travel agent. But
Brynjolfsson and McAfees claim is more troubling and controversial. They believe that rapid
technological change has been destroying jobs faster than it is creating them,
contributing to the stagnation of median income and the growth of inequality in the
United States. And, they suspect, something similar is happening in other technologically advanced
countries. Perhaps the most damning piece of evidence, according to Brynjolfsson, is a chart
that only an economist could love. In economics, productivitythe amount of economic value created for a
given unit of input, such as an hour of laboris a crucial indicator of growth and wealth creation. It is a
measure of progress. On the chart Brynjolfsson likes to show, separate lines represent
productivity and total employment in the United States. For years after World War II, the
two lines closely tracked each other, with increases in jobs corresponding to increases in productivity. The
pattern is clear: as businesses generated more value from their workers, the country as a whole became
richer, which fueled more economic activity and created even more jobs. Then, beginning in 2000, the
lines diverge; productivity continues to rise robustly, but employment suddenly
wilts. By 2011, a significant gap appears between the two lines, showing economic
growth with no parallel increase in job creation. Brynjolfsson and McAfee call it the great
decoupling. And Brynjolfsson says he is confident that technology is behind both the healthy growth in
productivity and the weak growth in jobs. Its a startling assertion because it threatens the faith that many
economists place in technological progress. Brynjolfsson and McAfee still believe that technology boosts
productivity and makes societies wealthier, but they think that it can also have a dark side: technological
progress is eliminating the need for many types of jobs and leaving the typical worker worse off than
before. Brynjolfsson can point to a second chart indicating that median income is failing to rise even as the
gross domestic product soars. Its the great paradox of our era, he says. Productivity is at record levels,
innovation has never been faster, and yet at the same time, we have a falling median income and we have
fewer jobs. People are falling behind because technology is advancing so fast and our skills and
organizations arent keeping up.
Uniqueness
US Econ Strong Now
US ECON IN GOOD SHAPE STOP WHINING
Steve Ivanovitch 14, President of MSI Global, a New York research company, senior
economist at OCED in Paris, and international economist at the Federal Reserve Bank
of New York and taught economics at Columbia, 2-16-2014, Stop Whining! The US
economy is in good shape, CNBC, http://www.cnbc.com/2014/02/16/stop-whining-the-us-
economy-is-in-good-shape.html
While operating more than an entire percentage point below its potential
growth rate, the U.S. economy still raised its business sector employment by nearly
2 million people over the last twelve months. Based on current growth dynamics,
this year promises an even better outlook for employment creation and America's
contribution to the world economy. That is a remarkable achievement because
companies usually don't step up hiring until a sustained increase in capacity
pressures them to start adding to their labor force. And no other economy
contributed last year 4.1 percent of its gross domestic product (GDP) to the rest of
the world. Those in the emerging markets, who are now complaining about
declining dollar liquidity, may also wish to note that the U.S. last year bought from
them $515 billion more than it sold to them. Based on current growth dynamics, this
year promises an even better outlook for employment creation and America's
contribution to the world economy.
US ECON IS IMPROVING
CNNMoney 15, 5-18-2015, Good News: The US Economy adds 223,000 jobs, CNNMoney,
http://money.cnn.com/2015/05/08/news/economy/april-jobs-report-economy-pick-up/
America can breathe a sigh of relief. The economy is improving

with the spring weather. The U.S. added 223,000 jobs in April, a
healthy pick up after a disappointing March and about in line with what
economists surveyed by CNNMoney projected. The good news doesn't stop
there. The unemployment rate dropped to 5.4%, its lowest mark
since May 2008. This is likely to be helpful to Democratic presidential
candidate Hillary Clinton. Many believe she needs the economy to keep
growing until Election Day in order for her to win the presidency. The one
thing regular Americans still want is better pay. There are
finally signs it's picking up. Wages are now growing at 2.2%,
above the expectations from CNNMoney's survey. Experts say pay
should continue to bump up if unemployment remains low.
US ECON IS STABLE NOW

John Mason 15, 7-9-2015, The U.S. Economy Continues to Grow Slowly and Maybe Thats the Good
News, The Street, http://www.thestreet.com/story/13213524/1/the-us-economy-continues-to-grow-
slowly--and-maybe-thats-the-good-news.html
Tepid economic growth in 2015 isn't the worst thing that could happen. With fears
of instability around the world, a vastly changed Europe, a Chinese stock market in
correction territory, and myriad other factors, we'll be lucky to have weak economic
growth be the headline over the next 12 months. We just finished the 24th quarter of
the current economic recovery. The compound annual rate of growth for the full
recovery will come in around 2.3% or so. This is the fourth longest economic
recovery since the end of World War II but also the weakest recovery on record.
And, things don't appear to be getting much better. The recent meeting of the Board
of Governors of the Federal Reserve System indicated no changes in the economic
projections of Board members from the previous meeting. For all of 2015, board
members indicated that they expected real GDP to climb to 2.0%. In 2016 the range
is 2.4% to 2.7% and in 2017 the range is 2.1% to 2.5%. The longer range projection
is for a growth rate of 2.0% to 2.3%
Tech Leadership Decline Inevitable
OTHER MAJOR THREATS TO TECH LEADERSHIP
Jeff Clark 13, Masters and doctorates degrees in engineering from Virginia Tech, 12-3- 2013,
Maintaining U.S. Technology Leadership, The Data Center Journal,
http://www.datacenterjournal.com/maintaining-technology-leadership/
The U.S. is generally recognized as the world leader in technology, having founded
the silicon industry and hosting many top universities in science and engineering.
Each year, however, prognostications about the nations demise into second-tier
status crop up, usually in the context of demanding more government funding of
various programs, reducing corporate tax rates or beefing up education. But truly
maintaining technology leadership involves more than just throwing more (of other
peoples) money at the problem: it requires recognition of the source, purpose and
goals of technological development. Competition between the U.S. and, say, China (a
likely candidate to replace the U.S. as technology leader, should the U.S. falter) is not
necessarily bad; like any form of competition, in the right measure it can encourage
each side to improve. Unfortunately, much of the competitive spirit in the U.S. is
more a reflection of jingoism and a sense of entitlement, as though the nation has
some claim to a leadership position simply because of who it is (a nation that is
much, much younger than many others around the world). All in all, the greatest
threat to U.S. leadership in technology isthe U.S. The nations
overfinancialization, educational inflation and IP laws hamper innovation, but calls
for greater government spending on research and development or education simply
feed the problems rather than solving them. Partly to blame is the overemphasis on
growth, which is ultimately an unsustainable policy. A turnaround in any of these
destructive policies, however, is unforeseeable apart from a drastic change in
conditions (i.e., another crash a la the Great Recession).
Tech Leadership High Now
US TECH LEADERSHIP IS STABLE NOW BUT COULD DECLINE
MHTA 12, Asian Countries Challenge U.S. Tech Leadership, MHTA, https://www.mhta.org/news-1/
The United State remains a global leader in supporting science and technology
research and development, but only by a slim margin that could soon be overtaken
by other regions of the world. That is a key finding in the Science report released recently by
the National Science Board. The information clearly shows we must re-examine long-held
assumptions about the global dominance of the American science and technology
enterprise, said NSF Director Subra Suresh. And we must take seriously new
strategies for education, workforce development and innovation in order for the
United States to retain its international leadership position. The report notes
President Obamas 2009 Strategy for American Innovation, which recognized the
importance of science and technology as drivers of innovation. Analysts reacting to
the report noted there are factors in play that could make the U.S. more competitive
with China when it comes to manufacturing. Wages in China are growing at a rapid
pace would could lessen its advantage. A report by the Boston Consulting Group
found that within five years, the cost gap between the United States and China will
be virtually closed.
Tech Leadership Inev
US TECH LEADER FOR NEXT 20 YEARS
Steve Minter 14, 3-17-2014, US Positioned as Technology Leader for The Next 20 Years, Industry
Week, http://www.industryweek.com/trade/us-positioned-technology-export-leader-next-20-years
The U.S. is expected to retain its position as a leading technology goods exporter for
the next two decades, according to trade research conducted by international bank
HSBC. Optimism about trade generally among U.S. business leaders is at its highest level since the bank
began conducting its semiannual trade survey. The U.S. HSBC Trade Confidence Index rose to
115 from 114 six months ago and was higher than the global average of 113. The
index surveys small and middle-market businesses, including 250 in the U.S. HSBC
forecasts that U.S. trade will grow 6% annually from 2014 to 2016. The bank expects
global trade to grow 8% annually to 2030. U.S. exports set a record in 2013,
reaching $2.3 trillion. In 2013, the United States had a trade surplus in services of
$229 billion and a goods deficit of $703.9 billion for a total trade deficit of $474.9
billion. That was nearly at $59.8 billion improvement from 2012.
Yes Tech Bubble
Tech bubble now- burn rates to start ups and high risk
John Cook 14, John Cook is GeekWire's co-founder and editor, a veteran reporter and the longest-serving
journalist on the Pacific Northwest tech startup beat., 9-15-14 "Venture capitalist Bill Gurley: Tech sector is
overheating, and the boom could end," GeekWire, http://www.geekwire.com/2014/venture-capitalist-bill-
gurley-says-things-overheating-tech-sector-current-boom-cycle-will-end/
All good things must come to an end. And Benchmarks Bill Gurley one of the most successful venture
capitalists on the planet thinks the current tech boom is starting to show
signs of the dot-com boom (and bust). What worries the backer of Zillow, Uber,
NextDoor and Opentable? Burn rates are rising at startups, and
companies are feeling as if they need to raise huge piles of
capital in order to compete. Every incremental day that goes past I have this feeling a
little bit more, Gurley tells the Wall Street Journal in a wide-ranging interview. I think that
Silicon Valley as a whole or that the venture-capital community
or startup community is taking on an excessive amount of risk
right now. Unprecedented since 99. In some ways less silly than 99 and in other ways more silly
than in 99. Gurley goes on to surmise that burn rates the amount of money
that a company is spending at venture-backed companies
are now at an all-time high. He also suggests that more people
are working for money-losing companies than have been in 15
years, and that many of the entrepreneurs today dont have the muscle memory of what
happened in the late 90s. So risk just keeps going higher, higher and higher. The problem is that because
you get there slowly the correcting is really hard and catastrophic. Right now, the cost of capital is super
If the environment were to change dramatically, the
low here.
types of gymnastics that it would require companies to
readjust their spend is massive. So I worry about it constantly. Interestingly, when I
interviewed Gurley at last years GeekWire Summit, which took place last September, Gurley didnt sound
quite as cautious in his remarks. At one point, I asked him about Benchmarks investment in Webvan
perhaps the greatest example of 1990s dot-com hubris and he noted that the firm likely would invest in
the concept again. They
got too ambitious. They tried to do too much,
too fast and then the bubble happened, he said. If you have
a high-capital business and you are being overly aggressive
and you surf over a financial reset, you are dead. Just like Webvans
crash, Gurley predicts that well see some high-profile failures in the next year or two, something he says
will be healthy for the tech ecosystem as a whole.
Valuations of tech companies are unreasonably high- we are in a tech bubble

Steve Tobak 14 Steve Tobak is a management consultant, columnist, former senior executive and author,
3-11-2014, "Its Official: We Are in a Tech Bubble," Fox Business,
http://www.foxbusiness.com/technology/2014/03/11/its-official-are-in-tech-bubble/
As a survivor of the first dot-com bubble, you might say Im particularly sensitive to the suggestion that we
may be heading toward another. Maybe skeptical is a better word. I mean ,
how can an
industry full of so many brilliant and innovative people an industry
make the same eminently self-destructive
I was once a proud part of
mistake twice? They can. And they are. Never mind what all the pundits say:
Sure, there are similarities, but its different this time. Back then we had companies getting funded on
nothing but a concept. We had startups running Super Bowl ads, going public, and quadrupling on the first
day of trading without selling a single anything to anybody. Well sure its different this time. Its been 14
years, almost to the day, since the Nasdaq peaked at 5,132 before plummeting back to earth. Fourteen
long and eventful years. And remember what they used to say about Internet time, that it accelerates
everything? So that must be something like 210 years in Internet time, right? Or maybe thats dog years. I
the
always get those two confused. Of course not everythings the same as before. But
underlying causes are, not to mention some pretty impressive
signs staring us right in the face. And perhaps the most telling sign is how hard all
those pundits are working to prove that, this time, its for real. That this time, were not in a bubble. Heres
why I think theyre all wrong. Dont overlook the obvious. The Nasdaq skyrocketed by more than 4,000
points over the five-year period leading up to its all-time high on March 10 of 2000. Fast forward to today.
Over the past five years, the Nasdaq has risen more than 3,000
points. Its less than 800 points shy of its lofty peak in the dot-
com bubble. And we only need an 18% gain to get there
about the same rise weve seen in just the past six months .
Public valuations for Internet and related hot tech companies
are, once again, unjustifiably sky high. LinkedIns (LNKD) price-
to-earnings ratio is 942. Guidewire Softwares (GWRE) P/E is
782. Amazons (AMZN) is 632. Netflixs (NFLX) is 245.
Facebooks (FB) is 116. Twitter (TWTR) has a $30 billion market cap with no earnings and
whopping price-to-sales multiple of 44. Not to mention the dozens of startups that went public over the
past year or two that, like Twitter, have never made money and boast otherworldly price-to-sales multiples
in the high double-digits. Valuations of private companies are even more
pumped up. A few weeks ago,Facebook bought 4-year-old WhatsApp for $19 billion a record for a
Silicon Valley company. And the messaging app has just 55 employees and a few million dollars in revenue.
Last November, Snapchats 23-year-old CEO Evan Spiegel turned down a $3 billion all- cash offer from
Mark Zuckerberg and company. Rumor has it that Google (GOOG) offered even more. Clearly, the
messaging startups VC backers IVP, Benchmark, and Lightspeed are expecting a far bigger return for
their investment. Tech IPOs are just beginning to heat up. According to CB Insights, 600 startups in the IPO
pipeline have raised more than $55 billion thats nearly $100 million apiece. And 47 venture-backed
companies including Palantir, Pinterest, Box, Spotify, Fab, and Square are valued at more than a billion
dollars. And those are just the obvious signs.
Unicorn companies, interest rates, and overvalued companies show there is a bubble
Jim Edwards, Jim is the founding editor of Business Insider UK. The U.S.
Supreme Court cited his work on the death penalty in the concurrence to
Baze v. Rees, on the issue of whether lethal injection is cruel or unusual. 6-9-
2015, "The CEO of a $1 billion 'unicorn' startup admits we're in a bubble,"
Business Insider, http://www.businessinsider.com/1-billion-unicorn-ceo-yes-its-
a-tech-bubble-2015-6
I had drinks with one of the $1 billion "unicorn" CEOs last night, in a trendy Noho bar in London. He told me he thinks
we're in a tech bubble, and it's going to end badly for many companies . Unicorn companies were
so-named a few years ago because it was exceedingly rare for
a tech startup in private hands to be worth as much as $1
billion. But now there are 102 "unicorn" companies. So finding a unicorn
CEO to have drinks with isn't as hard as it used to be. This fact wasn't lost on my unicorn CEO. He was very sure that all
these unicorns lying around means we're in a bubble. I was somewhat

shocked to hear this because, normally, when tech founders take vast sums of money from investors, they have a lengthy
and convincing explanation of why their company is fundamentally different from everyone else's and won't fail when / if the
economy runs into trouble. But my guy thinks it's all coming to an end sooner rather than later. Here is the context. In
order to believe there is not a bubble, you have to believe the following narrative: Although tech stocks are at an all-time
high, and private tech startup valuations are hitting astonishing highs (Uber is valued at $41 billion!), this is not a bubble.
It's a boom, for sure, and these companies may be temporarily overvalued. But these companies have real revenues, and
the economy is shifting in their direction regardless of the underlying economic cycle. i.e., money is moving out of TV and
newspapers and into apps regardless of whether there is a recession or growth. When the recession comes, the "no
bubble" people say, some companies will get hurt, just like in a regular recession. But we won't see the kind of full-scale
bonkers collapse that we saw in 2000 and 2008. Back in 2000, the tech sector deflated because companies had gone
public with no revenue whatsoever. In 2008, the economy tanked because banks had loaned mortgage money to millions
of people who couldn't pay it back. This time it's different, because these new tech companies are real businesses, the "no
bubble" people say . My unicorn, however, has been worrying that it is a
bubble for months. Here are the things he's really worrying about: People have no
memory of 2000 or 2008: The dotcom crash was 15 years ago. The mortgage crisis was eight years
ago. An entire generation of entrepreneurs under age 30 has no clue
what it's like when everyone runs out of money at once

because they were children when it happened last time.
Interest rates: Central banks currently have interest rates set at
zero percent. That means any investment that returns more than zero looks good right now. When
central banks raise those rates, all the marginal business ideas
that return just a few percent in profits will be wiped off the
map because no one will fund them. Valuations: Look at Uber,
the unicorn says. Its market cap is now bigger than Delta Air Lines,
Charles Schwab, Salesforce.com and Kraft Foods. It's allegedly

bigger than the value of the entire global taxi market is is
trying to replace. Sure, he says, Uber is a great business and a great company. But $41 billion?
Now? Maybe in a few years time. Private valuations not
matching public ones: Some private tech startups are now
valued greater than those on the public markets, post IPO. This seems ...
unusual. Tech startups offering stock at a discount in order to juice their valuations. Box offered stock at a discount to late
About one in six tech
investors, a factor that required its valuation to be written higher.
startups increases its valuation not because the underlying

business is believed to be capable of generating more value
but in order to accommodate protections given to preferred
investors, The New York Times reported. Burn rates: Some tech founders are
walking around telling investors not to worry about the fact
that they haven't yet worked out their revenue models. They have a
long runway ahead of them while they perfect their products. These founders are banking on
the notion that after their current round of funding there will
be another round of funding coming along. When your current
business model is to raise more funding ... that's bubble talk. Too
many business models are dependent on "one thing not happening": In an economy on the upswing, everyone can
survive. A rising tide lifts all boats. But some companies seem to be dependent on a certain single factor not happening,
such as being unable to raise a new round, being unable to become cash flow positive in the near-term, or being unable to
stop competitors raiding your workforce in a downturn (when there is no money to persuade them to stay).
"Margin compression": A lot of tech businesses sell things, and
because the market is good there isn't much price competition.
My unicorn sees a lot of companies that appear to be dependent on
customers paying what they're told to pay. These companies have yet to
experience, or survive, a price war with their rivals. Of course, like all unicorn CEOs, my unicorn was pretty confident that
he's going to do just fine in a recession, or when the Fed and the ECB start raising interest rates. In fact, he's looking
forward to it, in part because it will wipe away a lot of not-great, second-rung companies who only exist because so many
VCs are diversifying their portfolios across so many tech sectors. But it won't be pretty, he says. Bubbles
burst, and we're in one.
Consensus agrees there is a tech bubble now
Steven Russolillo, He earned an undergraduate degree from the University
of Delaware and is currently enrolled in a part-time MBA program at Baruch
College in New York. Steven Russolillo is a markets reporter for the Wall Street
Journal and has worked in various roles for the Journal and Dow Jones
Newswires. 4-22-2014, "David Einhorn: We Are Witnessing Our
Second Tech Bubble in 15 Years," WSJ,
http://blogs.wsj.com/moneybeat/2014/04/22/david-einhorn-we-are-
witnessing-our-second-tech-bubble-in-15-years/
Hedge-fund manager David Einhorn just joined the growing list of market watcherswarning about a market
bubble. There
is a clear consensus that we are witnessing our
second tech bubble in 15 years, said Mr. Einhorn of Greenlight Capital Inc. What is
uncertain is how much further the bubble can expand, and what might pop it. He described the current
bubble as an echo of the previous tech bubble, but with fewer large capitalization stocks and much less
public enthusiasm. There are three reasons he cited in an investor
letter that back his thesis: the rejection of conventional
valuation methods, short sellers being forced to cover
positions and big first-day pops for newly minted public
companies that have done little more than use the right
buzzwords and attract the right venture capital. He didnt specify which
companies he felt met that criteria. Mr. Einhorn isnt the first investor to warn of a bubble. Pricey
stock valuations, record high levels of margin debt and a near
record number of money-losing companies going public have
made some investors nervous that the market has rallied far
beyond what the fundamentals dictate. Some of the markets biggest
momentum plays, such as biotech, Internet and social-media stocks, have been hit hard since early March
amid concerns that they have gotten too pricey. Many of those names have recovered some of those
losses over the past week and a half. Without disclosing specific names, Mr. Einhorn said he has shorted a
basket of so-called momentum stocks. He highlighted the risk of such a move: We have repeatedly noted
that it is dangerous to short stocks that have disconnected from traditional valuation methods, Mr.
there is a
Einhorn said. After all, twice a silly price is not twice as silly; its still just silly. But now that
clear consensus that tech stocks are in a bubble, he said he is more
comfortable shorting a basket of these high-flying stocks.
Tech bubble now

Steve Tobak, is a management consultant, columnist, former senior
executive and author, 10-16-2014, "Were Definitely in a Tech
Bubble," Fox Business,
http://www.foxbusiness.com/technology/2014/10/16/were-definitely-
in-tech-bubble-now-what/
About a year ago I started seeing early signs of a tech bubble. We werent exactly partying like it was
1999, but valuations of private startups and multiples of certain public sectors were definitely on the frothy
we werent in bubble territory. Not yet. By March of
side. Nevertheless,
2014, that ship had sailed. Facebook (FB) took a trip to Crazytown and acquired
WhatsApp for a staggering $19 billion, albeit a drop in the bucket of the social networks $180 billion
public multiples and private valuations of
market cap. Meanwhile
Internet, cloud, social media and clean-tech companies were
sky-high. And the Nasdaq was within spitting distance of its all-
time peak. It was official: We were in a tech bubble. Warren Buffett had
a different view, saying, I dont see it. We do not have a big bubble market now. What does he know?
Hedge-fund manager David Einhornwas emphatic, saying, Now there is a clear
consensus that we are witnessing our second tech bubble in 15
years. What is uncertain is how much further the bubble can expand, and what might pop it."
Besides all the obvious signs that the market looked like a
duck and quacked like a duck, what sealed the deal for me was how creative
everyone was getting in order to justify the unjustifiable. Mostly they described a
perfectly elastic market with infinite growth potential, the
same sort of loony assumption we used to hear back in 1999.
"While some VCs might be young enough to be subject to the muscle memory analogy, most were around
to get burned during the first bubble. And therein lies the rub." - Steve Tobak The flaw in the ointment is
that all these hundreds of companies would somehow
magically manage to monetize their ridiculously high
valuations at some point in the future. There was no
comprehension that they were actually competing for the same
sets of eyeballs and limited disposal income. The other thing I kept hearing
was how theres no precedent for this sort of thing. How, this time, its different; how fundamentals like
revenues and profits dont apply here. And as I said back then, most of that crazy talk came from people
who were still in college when the dot-com bubble burst. Six months later, Benchmark Capitals Bill Gurley
-- one of the smartest VCs around -- sounded the alarm that the tech industry had
indeed gotten way ahead of itself. In a Wall Street Journal interview, he said, "I
think that Silicon Valley as a whole is taking on an excessive
amount of risk right now -- unprecedented since '99." He talked about
how more people are working for money-losing companies and
average burn rates at venture-backed firms are at an all-time
high since the dot-com era -- maybe even higher. And he said, No one's
fearful, everyone's greedy, and it will eventually end. And so on. He also said more than half
of todays entrepreneurs werent around for the first bubble,
so they have no muscle memory whatsoever. As I always say, great minds think alike. Still, you cant lay
this entirely at the founders feet. While some VCs might be young enough to be subject to the muscle
memory analogy, most were around to get burned during the first bubble.
Ubers value extremely high- tech bubble now

Mark Gongloff, 6-6-2014, "Uber Worth $18 Billion Because Sure, Why
Not?," Huffington Post,
http://www.huffingtonpost.com/2014/06/06/uber-18-
billion_n_5460748.html
Now do you believe we're in a new tech bubble? Uber, a controversial
car-hiring app, just raised $1.2 billion in fresh investor cash, giving it a total
value of either $17 billion, according to the company, or $18.2 billion, according to
The Wall Street Journal. Really, though, what difference does a billion here or a billion there make any
Uber, the value of which has quadrupled in less than a
more, when money no longer has meaning?
is now the most expensive member of the WSJ's "Billion
year,
Dollar Startup Club," made up of companies being financed by
venture capital that are worth more than $1 billion. There are
now more than 30 such companies, most of them in tech, including Airbnb ($10
billion), Dropbox ($10 billion) and Pinterest ($5 billion). Would you like some dubious comparisons to help
Uber is the second
you put these outlandish numbers in perspective? Of course you would.
most-valuable startup in history, after Facebook, according to the WSJ.
Uber is now worth more than half of the companies in the
Standard & Poor's 500-stock index, including dozens of banks,
oil companies and technology companies. It is worth more than
Chipotle or Whole Foods. It is worth more than ancient-economy companies like Alcoa
and Clorox. Uber is now worth more than all the personal real
estate in the crowded Washington, D.C., suburb of Falls
Church, Virginia, according to the real-estate research firm Redfin. Uber is now
worth more than two times the net worth of billionaire/real-life-Iron-Man
Elon Musk (as measured by Forbes). Uber is worth more than George
Lucas, Steven Spielberg, Donald Trump and H. Ross Perot
combined. Anyway, you get the idea: It's worth a lot of money. Whatever money is. We have
warned you repeatedly of a tech bubble in the past couple of
years, and we continue to be correct.
Prominence of unicorns shows tech bubble now

Louis Emmerson, Editor-in-Chief | Public Relations Coordinator at
Symbid, 7-14-2015, "Wave of $1 Billion "Unicorns" Sparks Fears of
Tech Bubble," Symbid Blog | Financial Democracy,
http://blog.symbid.com/2015/trends/wave-of-1-billion-unicorns-
sparks-fears-of-tech-bubble/
When social media software firm Sprinklr unveiled its latest funding round earlier this year, it was
catapulted into the elite club of unicorns, or tech startups worth at least $1 billion. This came just days
after Slack, the business software collaboration tool, entered the group of well-known names like Uber and
While unicorns are supposed
Snapchat that are leading the new wave of tech giants.
to be rare, mythical creatures, the proliferation of these
billion-dollar startups is beginning to cause concern in the very
heart of the fast-moving technology sector, Silicon valley. More
than 80 tech firms can now be called unicorns, according to a newForbes
Magazine list. Venture capital research firm CB Insights lists 53 US-based unicorns, saying the enormous
valuations are fuelled by growing excitement among private equity investors seeking to get a slice of the
next tech superstar. The use of the term unicorn began with a blog from investor Aileen Lee of Cowboy
Ventures in late 2013, when there were just 39 of the creatures and
an average of four born each year. In 2014 the number rose
to 48, according to CB Ventures. While some startup unicorns seem destined for big things,
unicorn fever has raised fears of a dot-com-like bubble. Dead
unicorns The unicorns include a handful of startups worth at least
$10 billion, a group sometimes called the decacorns. These include
Chinas Xiaomi, Airbnb, Pinterest and Dropbox, in addition to Uber and Snapchat. Some equity
investors are getting nervous over the trend. I do think youll
see some dead startup unicorns this year, said Bill Gurley, a partner at the
Silicon Valley venture firm Benchmark, at the South by Southwest festival in March. Gurley, who has been
investors and startups
a leading voice of caution on unicorns, said in a blog post that both
are pushing too hard, ignoring traditional standards of risk. We
are in a risk bubble, he said. Companies are taking on huge burn rates to justify spending the capital
they are raising in these enormous financings, putting their long-term viability in jeopardy. In a running
Twitter conversation on the subject, Danielle Morrill of the research firm Mattermark said Ive narrowed it
down to 61 potential dead unicorns. This is the stuff everyone is talking about but no one will publish.
Highly prominent venture capitalist Marc Andreessen, one of the founders of Netscape during the dot-com
era, expressed similar concerns in a series of tweets last year, saying too many startups
are burning cash too quickly. When the market turns, and it
will turn, we will find out who has been swimming without trunks on: many high burn
rate companies will VAPORIZE, he said. Mark Cuban, an early dot-com entrepreneur,
said on his blog that the current situation is worse than the tech
bubble of 2000 because of angel investors investing in apps
and tech firms with little scrutiny. I have absolutely no doubt in my mind that most
of these individual angels and crowd funders are currently under water in their investments, he wrote.
Because there is ZERO liquidity for any of those investments. None.
Zero. Zip. Heading for a fall Perhaps the market shakedown has already begun. Online retail startup
Fab.com, which raised $300 million and joined the unicorn club last year, ended up selling most of its
assets in March to the manufacturing firm PCH in a deal reported to be worth just $15 million. Another
former unicorn, the gaming service OnLive, was acquired recently by Sony for an undisclosed price.
Many startups have been able to raise cash from eager
investors without heading to Wall Street for a public share
offering. This also means the firms are not subject to the same
scrutiny and publicly traded company for finances and
governance. Theres a growing sense in Silicon Valley
particularly among the investor community of a lack of
transparency in the way these startups are being valued . Anant
Sundaram, a professor specialising in corporate valuations, said that while financial data on these unicorns
is often limited he is nonetheless surprised by how few have demonstrated an ability to grow revenues and
establish a sustainable business. Based on historical data, I wouldnt be
surprised if a vast majority of these firms fail to live up to their
valuations, Sundaram told AFP. Still, he said that these types of investments are part of the
process of innovation and creative destruction which fuel the economy. If this is beginning
to sound like the dot-com boom all over again, Sundaram noted that while
in the last cycle there many businesses with high valuations going bust, this did produce some standout
successes like Google and eBay.
Too many unicorns

Maria Aspan, Maria Aspan is a senior editor at Inc. magazine, where she
runs the Money section. She was previously a senior editor at American
Banker, where she won multiple "Best in Business" awards. 6-9-2015, "Why
Uber's $50 Billion Valuation Could Burst the Tech Bubble," Inc,
http://www.inc.com/maria-aspan/kevin-kinsella-on-uber-and-unicorns.html
Veteran venture capitalist Kevin Kinsella has a message for fast-growing startups: Take the money and
Kinsella, founder of Avalon Ventures and an investor in tech and life
run--far away from Uber.
sciences companies, has been sounding the alarm recently about the
high valuations of tech companies. He's particularly concerned
about the rise of so-called "unicorns," or private companies valued at more than
$1 billion--though he says that as long as investors are showering some startups with cash, entrepreneurs
should embrace unicorn status. "If the bank window is open and they're giving away money on the cheap, I
think entrepreneurs should be backing their trucks up," the La Jolla, California-based investor said in an
That's
interview last week. "From an entrepreneur's standpoint, it's a lovely day out there."
particularly true for Uber, the on-demand car service now reportedly valued at
an incredible $50 billion--more than the market capitalization
of many huge, public incumbents, including FedEx and Salesforce.com. Kinsella
calls himself a fan of Uber's service ("I use it; all my friends use it; it's providing a terrific experience"), but
he worries that any problems with the company or a similar-size market leader could burst the tech
bubble. "If
there was a serious hiccup in Uber's valuation, since it's
the lead unicorn--if it got a cold, I think the rest of the unicorns
would get pneumonia," he says. Uber did not immediately respond to a request for
comment. It's a familiar worry about the outsize influence that one dominant, successful company can
have on its industry; if Uber were in banking, it might be deemed "too big to fail." And Kinsella doesn't see
many obvious ways for the company to avoid eventually sparking a collapse in tech startup valuations,
unless Uber can get similar buy-in from public investors in an IPO. "Maybe one of these unicorns, maybe
the leading one--maybe it should go public," he says. " If
Uber or any other unicorn
gets the public markets to agree that yeah, it's worth $50
billion, that could avoid" bursting the tech valuation bubble. It's
worth noting that a very small percentage of startups reach unicorn status, though their numbers are
There are 110 unicorns, worth a collective $402 billion,
growing at an accelerated rate.
including 18 U.S. companies that have reached the $1 billion
mark since the start of 2015, according to CB Insights. That's far too
many, according to Kinsella, whose most famous investments include the game maker Zynga and the
Broadway musical Jersey Boys. He blames his fellow investors for not exercising more restraint when
handing out those truckloads of money. "There's a serious imbalance between
capital available to invest and ideas that are worth investing
in," he says. But for entrepreneurs, "you should take the highest valuation you can," Kinsella says. "Your
job is to conserve capital; you just need to do that very diligently and with a great deal of caution. Now
that may lead to you not needing to raise equity at all. But if you have to raise money, take it at the
highest valuation you can get."
Tech Bubble Now- Many similar warning signs from 2000

Bill Maris, Bill Maris is president and managing partner at Google Ventures.
3-24-2015, "Tech Bubble? Maybe, Maybe Not," TechCrunch,
http://techcrunch.com/2015/03/24/tech-bubble-maybe-maybe-not/
The case for a bubble Our data analysis reveals more than sunshine and lollipops.Here are six
troubling signs that suggest we may be in another tech
bubble. 1. Investors are putting more money into late-stage
rounds If you believe late-stage financing is replacing IPOs for fundraising, this might not be a
worrisome sign. Still, its easy to see the similarity to 2000: 2. Private
company valuations are rising Until now, our data have shown an environment that is
milder than 2000. Todays valuations tell a different story: 3. Valuations are increasing
faster than venture fundraising Heres another concerning chart: 4. High-
end IPO valuations are rising dramatically IPO valuations have increased
across the board, but the most successful companies are going public
at much higher valuations (or perhaps theyre just waiting longer). 5. Late-stage
financing is displacing exits Both late-stage valuations and acquisition price tags are
going up. Meanwhile, IPO valuations are going down. Late-stage financing and
acquisitions are, in effect, replacing IPOs. 6. Exit ratios are
dropping The data indicate that IPO valuations are not growing as fast as late-stage private
company valuations. In fact, if we look at the ratio of IPO valuation to late-stage
valuation, we can see that this ratio has been declining since
2009. This suggests that late-stage investors might expect
lower returns than in the past.
Unicorns causing fear over tech bubble
Louis Emmerson, Editor-in-Chief | Public Relations Coordinator at
Symbid, 7-14-2015, "Wave of $1 Billion "Unicorns" Sparks Fears of
Tech Bubble," Symbid Blog | Financial Democracy,
http://blog.symbid.com/2015/trends/wave-of-1-billion-unicorns-
sparks-fears-of-tech-bubble/
When social media software firm Sprinklr unveiled its latest funding round earlier this year, it was
catapulted into the elite club of unicorns, or tech startups worth at least $1 billion. This came just days
after Slack, the business software collaboration tool, entered the group of well-known names like Uber and
While unicorns are supposed
Snapchat that are leading the new wave of tech giants.
to be rare, mythical creatures, the proliferation of these billion-dollar
startups is beginning to cause concern in the very heart of the fast-moving
technology sector, Silicon valley. More than 80 tech firms can now be called
unicorns, according to a newForbes Magazine list. Venture capital research firm CB Insights lists 53
US-based unicorns, saying the enormous valuations are fuelled by
growing excitement among private equity investors seeking to
get a slice of the next tech superstar. The use of the term unicorn began with a
blog from investor Aileen Lee of Cowboy Ventures in late 2013, when there were just
39 of the creatures and an average of four born each year. In
2014 the number rose to 48, according to CB Ventures. While some startup unicorns
seem destined for big things, unicorn fever has raised fears of a dot-com-
like bubble. Dead unicorns The unicorns include a handful of startups worth at least $10 billion, a
group sometimes called the decacorns. These include Chinas Xiaomi, Airbnb, Pinterest and Dropbox, in
addition to Uber and Snapchat. Some equity investors are getting nervous
over the trend.
No Tech Bubble
No tech bubble now- many differences from 2000
Bill Maris, Bill Maris is president and managing partner at Google Ventures.
3-24-2015, "Tech Bubble? Maybe, Maybe Not," TechCrunch,
http://techcrunch.com/2015/03/24/tech-bubble-maybe-maybe-not/
The case against a bubble While the data show that venture investing is increasing, they also
illustrate four key differences from the dot-com bubble. 1.
Companies are slower to go public During the 2000 bubble,
many companies rushed to go public before they had any
revenue. Today, companies are taking longer to IPO: 2. Venture
fundraising is way below 2000 peak In 2000, money flooded
into venture capital, and VCs used that money to fund
companies that might not otherwise meet the bar resulting in
some spectacular failures. Today, VC fundraising is on the uptick, but its
still far below the 2000 level: 3. Total number of investments is
fairly flat In 2000, VCs made a record number of investments
over 2,000 that year alone. How does that compare to today? It may not feel like it, but the
number of VC investments has actually been fairly flat since 2007.
This suggests that VCs are still being selective: 4. VCs are investing more money
but only half of 2000 peak Venture capital investing shot up in 2013 and 2014, but its still far short of dot-
in 2000, more VC dollars led to more
com bubble levels: During the bubble
investments. Today, VC investing is up, but the number of
deals is flat. Whats going on? As well see, investors are focusing their money on a relatively
small number of large deals.
No bubble now- much better than in 1999

Dan Primack, Dan Primack is a senior editor at Fortune and the author of
Term Sheet, a daily newsletter about private equity. 6-15-2015,
"Andreessen Horowitz: Why were not in the next tech bubble,"
Fortune, http://fortune.com/2015/06/15/andreessen-horowitz-why-
were-not-in-the-next-tech-bubble/
Earlier this month, around 100 institutional investors gathered at the Rosewood Hotel in the heart of Silicon
Valley, for the annual limited partner meeting of venture capital firm Andreessen Horowitz. What they
heard was the firms staunch belief that the tech market is not currently in a
bubble, despite the proliferation of so-calledunicorn startups that have received billion-dollar (or
higher) valuations in the private markets. Among the unicorns in Andreessen Horowotizs portfolio are
Airbnb, Actifio, Instacart, Jawbone, Lyft, Jawbone, Pinterest, Slack and Zenefits. Prior investments included
Box BOX 3.14% and Twitter TWTR 1.23% . The VC firms argument was first presented to investors by
It
chief operating officer Scott Kupor, via a slideshow that isnow available on the firms website.
primarily compares the current environment to that of the
dotcom bubble, showing that todays tech investment volumes
are much smaller despite the much larger number of Internet
users. The firm also argues that the unicorn development
and relative lack of IPOs means that most of the value
appreciation is going to private market investors (i.e., those in the
room).
For example, Andreessen Horowitz reports that the total
amount of venture capital and IPO financing dollars in 2014
was $48 billion, compared to $71 billion in 1999. That works
out to around 2.6% of todays GDP, while the 1999 figure
comprised a much higher 10.8% of GDP. Moreover, the S&P IT
indexs forward price-earnings ratio is 16.1x today versus 39x
in 1999. All of this comes at a time when the global Internet
population is 7.5x larger and annual e-commerce revenue is up
more than 25x. As for the unicorns, Andreessen Horowitz essentially argues that all of these
later-stage, high-dollar venture rounds are essentially substitutes for IPOs, which it acknowledges are
on life support. The volume of early-stage funding, however, has remained somewhat stable since the
private market
financial crisis. What that means, according to the VC firm, is that
investors are in line to recognize much more value from their
2015 portfolios than they were in past eras as evidenced by public market
investors like mutual funds and hedge funds dipping down to improve their cost bases. In short: This time
is different because there are always differences between markets that are 15 years apart. Whats
important, Andreessen Horowitz believes, is understanding these differences and how they should impact
investment returns (positively or negatively). As the above slide shows, the firm remains bullish. But there
are three big issues that, from my perspective the Andreessen Horowitz presentation glosses over a bit too
quickly:1.
While it is true that todays tech P/E multiples are closer
to the early 1990s than the late 1990s, a big part of that is because so few of
the unicorns have gone public. So is it really an apples to apples comparison? Moreover, while it is true
that public equity investors were the main beneficiaries of stock price run-ups for companies like
Amazon AMZN 3.10% and Microsoft MSFT 1.97% , they also were the primary losers when a wider swath
of VC-backed tech companies collapsed in late 2000 and 2001. When trying to understand the current lack
of unicorn IPOs, one common explanation is that these companies, while typically older than 1999 IPO
issuers, share traits like unprofitabilty and immature corporate governance. What if VC firms like
Andreessen Horowitz are nearing the same type of inflection point that public equities investors hit in late
2000? Different but the same? The flip-side of hoarding value appreciation by keeping companies private is
that youre also increasing risk.2.In a related vein, Andreessen Horowitzs
presentation treats the relative lack of tech IPOs as a sign of
market health. As I wrote last week, there is a much less charitable way to view it. Moreover, the
lack of IPOs also means that the public markets have yet to validate many of these unicorn valuations. 3.
One difference between 1999 and today that wasnt addressed in the presentation was that of founder
VCs have much less influence over portfolio
control, or how
companies than they did in years past. Part of this, of course, is directly related
to the success of Facebook FB 2.60% a founder-controlled company that opted not to sell out early
(against the advice of most of its investors and advisors, save for the notable exception of Marc
Andreessen) in an obvious stroke of business genius. It is unclear how this change will ultimately play out,
but it certainly puts much more value on startup stock-picking than on operational value-add.
More moderate tech sector than in 2000

John Kennedy, Editor John Kennedy is an award winning technology
journalist. He was recipient of the Irish Internet Associations NetVisionary
Technology Journalist Award 2005. 6-17-15, "This is not a tech bubble
says Andreessen Horowitz," Silicon Republic,
https://www.siliconrepublic.com/start-ups/2015/06/17/tech-bubble-
there-is-no-tech-bubble-claims-silicon-valley-vc-andreessen-horowitz
This is no Year 2000 tech bubble, things are different this time thats the gist of the
latest slideshare from eminent Silicon Valley venture firm Andreessen Horowitz, which is getting a lot of
more money is flowing
attention online. Andreessen Horowitzs presentation notes that
into privately-owned tech companies than at any time since
the last tech bubble popped spectacularly in March 2000. The presentation, compiled
by Morgan Bender, Benedict Evans and Scott Kupor, says that while tech market indices
are approaching the levels of 1999, it is actual revenues and
not price/earnings multiples that are growing. The tech
industries share of the S&P 500 has remained stable for 14
years at 20pc, down from the peak of 30pc in 2000. Another core difference they point out is that the
internet is too big to fail. Growing from 40m users in 2000 to 4bn in 2014. The corollary of this is that
people are spending more money online US$304bn a year in terms of e-commerce and online
advertising is capturing a spend of approximately US$50bn a year. The Andreessen Horowitz partners
there is still considerable room for growth for the
observe that
digital economy by pointing out that e-commerce is only 6pc of
US retail revenue theres far more room to grow. Funding as a share of US
GDP is moderate at around 0.3pc, compared with 2000 when
US tech funding as a percentage of GDP had soared to almost
11pc of US GDP. Everything, they say, is more moderate. Tech
funding invested in 2014 stands at US$48bn, compared to US$71bn in 1999, and US e-commerce revenues
stand at US$304bn compared with US$12bn in 1999.
Tech boom not bubble

Jeff Elder, He was awarded a Knight Fellowship to Stanford University in
2008-2009 to study social media. Jeff Elder is an investigative reporter
covering social media and technology in Silicon Valley. 2-3-2015, "Silicon
Valley Is Not a Bubble About to Burst, Report Says," WSJ,
http://blogs.wsj.com/digits/2015/02/03/silicon-valley-not-a-bubble-
not-about-to-burst-report-says/
Silicon Valleys economy is booming, but according to one economic report
theres not a bubble in sight. According to the think tank Joint Venture Silicon Valley,
Silicon Valleys job growth rate, at 4.1 percent, is the highest
its been since 2000, adding nearly 58,000 jobs. Average annual incomes in Silicon Valley and
San Francisco were $116,033 and $104,881, respectively, compared to $61,489 in the United States, the
study shows. On the investment side, Silicon Valley and San Francisco lured $20.2 billion in venture capital
in 2014, according to the Silicon Valley Index, a report tallying economic indicators since 1995. I dont see
any kind of bubble, said Russell Hancock, president of Joint Venture Silicon Valley. This
is not
2000. Hancock cited gradual growth in investments, an
expanding regional economy with good job growth, and a
diverse portfolio including big data and clean tech investments
as reasons for a steadier market. More than half the VC investments were in
software, a figure that has grown steadily for five years, the report says. The share of U.S.
investments shot up nearly 7 percentage points to 43 percent.
The report says there were were 275 U.S. Initial Public Offerings in 2014, 23 of which were Silicon Valley
companies, and five of which were San Francisco companies.
Companies have lower PE ratios and sustainable business models- no bubble

Anthony Tjan and Andrew Fu. Anthony (Tony) is one of the World Economic
Forums Global Leaders for Tomorrow and has been a speaker at the TED
conference. Andrew graduated from the University of Pennsylvania where he
earned a B.Sc in Economics with Honors from The Wharton School. 3-31-
2015, "Its a Boom, Not a Bubble," CB Insights - Blog,
https://www.cbinsights.com/blog/tech-bubble-boom/
So what is a bubble? A bubble is characterized by a spike in valuation that is unwarranted by business
during the last
fundamentals such as revenue and profitability. This was certainly true
bubble in which top tech companies enjoyed PE ratios in the 80-
90x range, 70% of IPO candidates were unprofitable, and $5B
valuations were given to companies such as Webvan, which had less
than $0.5M in sales. Nowadays, valuations are much more
sober: the average NASDAQ-listed company today trades at around
21x PE, and even high-flying companies such as Apple, the most valuable company ever, trades at
only 15x PE. Companies today have real revenue and free cash flow
they have proven and sustainable business models. NASDAQ listed
companies of today have an estimated $500B in combined cash, accumulated from their profits;
compare this to 2000 when over 80% of tech IPO companies
werent making a dime. Further, the median tech IPO today has
more than 4 times the revenue and more than 2 times the
maturity of the median 15 years ago. So while the market is undeniably hot right
now, there is significantly more fundamental economic performance supporting market activity this time
around. This statement should not be confused with the likely reality that a good number of public and
private companies (and yes some of those unicorns) are over-valued, but there is no denying that the
picture is different than it was in 1999-2000. As a reminder ,
the 2000s was a period
when internet companies could do no wrong. For example, Pets.com, a
darling of the dot com era, plowed a massive chunk of $300M into ineffective infrastructure, sold products
at a third of their cost, and famously spent almost $12M on marketing to achieve less than $1M in sales!
No bubble- gradual growth and careful venture capitalists
Tracey Lien, Tracey Lien is a technology reporter for the Los Angeles
Times working in the San Francisco Bay Area. She previously covered
the video game industry for Vox Media and, before that, Kotaku
Australia. 2-3-2015, "Tech economy is booming with no bubble burst
in sight, report says," latimes,
http://www.latimes.com/business/technology/la-fi-tn-silicon-valley-
index-20150203-story.html
Silicon Valleys economy is booming, according to the Silicon Valley
Index, an annual analysis of the regions job creation, growth rate, earnings
and capital investments. And, in comforting news for investors, it shows no
signs of slowing down. The index found that in 2014, the region created
nearly 58,000 new jobs, yielding average annual earnings of $116,000,
venture capital investments were higher than any other year
since 2000, and more than 16 million square feet of new commercial
building space was approved. More importantly, the organization behind the
index, Joint Venture, said SiliconValleys current growth bears little
resemblance to the tech boom of the late 1990s, which ended in a
spectacular collapse from 1999 to 2001. Were not experiencing a
spike like we did in the first tech boom, said Joint Ventures director
and Chief Executive Russell Hancock. Weve grown into this year after year
since 2010. Weve experienced steady incremental growth.
According to Hancock, there might be more venture capital money to go
around, but its now harder to get. Investors are being more
discerning about who they invest in; theyre not tripping over
themselves to throw money at some 14-year-old with a pets website,
Hancock said, referring to Pets.com, a dot-com enterprise that failed during
the first tech boom. Hancock said another difference between today and the
boom of the '90s was that technology has diversified and become
an integral part of many industries, such as healthcare, education,
retail, and the nonprofit sector. Theres now a mobile phone industry with a
thriving app market. And what we consider the technology industry has
also diversified to include everything from nanotechnology to clean-air
technology to IT infrastructure. All of these things are in the portfolio and
theyre all growing, Hancock said.
US Cloud Good
US companies dominating the cloud storage sector
Tj Mccue, 1-29-2014, "Cloud Computing: United States Businesses Will Spend $13 Billion On It,"
Forbes, http://www.forbes.com/sites/tjmccue/2014/01/29/cloud-computing-united-states-businesses-will-
spend-13-billion-on-it/
Instead of a slow-moving fluffy white cloud image, the cloud computing industry should use a tornado that might be a better way to
visualize how fast cloud
computing is growing today. Amazon is dominating, but is
followed by the usual suspects: IBM IBM -0.05%, Apple AAPL +0.99%, Cisco, Google GOOG
-0.22%, Microsoft MSFT +0.33%, Salesforce, and Rackspace, to name a few. (Disclosure: I am on the paid blogger
team for IBM Midsize Insider, which covers technology pertinent to midsize companies, including the cloud, among other topics.)
The cloud is frequently in the news, but there is also a fair amount of confusion, outside of technology teams. What is cloud
computing and why do businesses need to care? IBM published this handy infographic: 5 Reasons Businesses Use The Cloud. Among
the reasons: Collaboration, better access to analytics, increasing productivity, reducing costs, and speeding up development cycles. By
2015, end-user spending on cloud services could be more than $180 billion. It is predicted that the global market for cloud equipment
will reach $79.1 billion by 2018 If given the choice of only being able to move one application to the cloud, 25% of respondents
would choose storage By 2014, businesses
in the United States will spend more than $13 billion
on cloud computing and managed hosting services. According to Jack Woods at Silicon Angle, theres some serious
growth forecasted and he lists 20 recent cloud computing statistics you can use to make your case for why you need the cloud or to
understand why you should consider it for your business. The above bullet points come from his post. At the simplest level, cloud
computing lets you share files and resources via the web. If
you run a small business, you read about cloud
storage [is] as a way to backup and protect your data. Companies, such as, Google Docs (now Drive),
DropBox, Carbonite, Cubby, and a slew of others. If you need to choose an online backup provider, take a look at Tim Fishers post:
40 Online Backup Services Reviewed. Looking beyond online backup, to understanding where the cloud is going, I look to Louis
Columbus who writes extensively about the cloud here on Forbes and elsewhere. After reading Louis Big Data post a couple of weeks
ago, 2014: The Year Big Data Adoption Goes Mainstream In The Enterprise, (linked in left column) it made it clear that big data takes
big crunching power and is part of why many midsized and large enterprises are not leveraging in-house servers there is no leverage.
You want to leverage a cloud provider like those listed above that can scale up and down with your computing needs.
US companies surpass competition - Amazon holds 28% of global cloud storage

Jack Clark, 4-23-2015, "You Thought Amazon's Cloud Was Big? Alibaba's Is Huge," Bloomberg,
http://www.bloomberg.com/news/articles/2015-04-23/you-thought-amazon-s-cloud-was-big-alibaba-s-is-
huge
, Amazon finally broke out earnings for its Amazon Web Services
After keeping the world waiting for nine years on Thursday.
The $1.57 billion in sales for the quarter suggest that the company is far ahead of
rivals in the cloud computing business. Amazon has 28 But as AWS expands globally, it faces strong competition from a familiar foe: Alibaba. already
percent of the worldwide market for cloud infrastructure services, followed by

Microsoft with 10 percent, according to Synergy Research Group. To expand its a report by
share, Amazon has spent the past few years plunking down gigantic data centers
around the globe to help it quickly serve customers outside the U.S. In some cases, it did so to abide by local regulations
Unlike many of its rivals, Amazon has targeted China, opening a data
as to where these servers should be located.
center near Beijing in 2014. Typically, when Amazon has expanded around the world to locations such as Brazil, Ireland, and Singapore, it has faced scant local competition, aside from a few regional Web
hosting companies or telecommunication companies. China is different.
Note: some small text talk about opportunity for Alibaba, but the argument is that even though Alibaba
wants to enter the global competition, US companies are still dominating
The strongest foreign company is still an underdog compared to competition from
the US
Michael Kan, 3-3-2015, "Alibaba enters US cloud market, signaling global ambitions," PCWorld,
http://www.pcworld.com/article/2892752/alibaba-enters-us-cloud-market-signaling-global-ambitions.html
Alibaba enters US cloud market, signaling global ambitions Michael Kan IDG News Service Mar 3, 2015 11:45 PMe-mailprint
Chinese e-commerce giant Alibaba Group is making a push into the U.S. cloud
computing market, where its expected to run into competition from Amazon.com,
Google and Microsoft. Alibaba subsidiary Aliyun is already the biggest cloud player in its home market, and on
Wednesday, it opened a data center in California, its first data center outside of China. The U.S. business will first focus on attracting
Chinese enterprises based in the country, before it expands to international customers in this years second half, Alibaba said in a
statement. No
doubt Alibaba will face intense competition in the U.S., where Amazon
Web Services and Microsoft Azure are major players. But opening the data center in Silicon Valley
sends another message that it wants to be a global company, said Charlie Dai, an analyst with Forrester Research. Although revenues
from the U.S. business may be small at first, Dai added, I think this is a good move, especially after their IPO. Every investor wants
to know whether Alibaba has any huge potential globally.
US companies growing customer demand is the motivation

Scarlet Edmonds, 2-2-2015, "US cloud storage market expects growth as demand for online data
storage increases," Companies and Markets, http://www.companiesandmarkets.com/News/Information-
Technology/US-cloud-storage-market-expects-growth-as-demand-for-online-data-storage-
increases/NI10023
US cloud storage market expects growth as demand for online data storage
increases Cloud-storage company Trunx revealed lower prices for more cloud-storage, in a bid to gain more control over the
cloud-based storage market. The picture storing start-up, founded in 2013, is attempting to penetrate the competitive cloud-storage
market by offering 15GB of storage to customers for no cost, or charging $4.99 per month for unlimited storage; making Trunx a
considerably cheaper option than Amazon Prime, who offer of unlimited storage for $99 per year, and an initial 5GB of free storage.
The cloud storage market is experiencing growth worldwide, with Thailand's cloud service market expected to grow by 17% to 22
billion baht as more organisations adopt cloud technology.
In the US the cloud-storage gateway market is
expected to grow at a CAGR of 54.37% by 2019. Cloud-storage gateways (or CSGs) are an emerging appliance
which combine local storage, data protection and online cloud storage to for a collaborative package which is cost effective and
secure. Additionally, CSGs establish compatibility between local systems and cloud storage, as well as connecting enterprises to each
other via the cloud. CSG ensures cloud-stored data follows common protocol and facilitates network traffic management and storage
space in a more efficient manner. The
leading corporations in the US cloud storage market are
currently: Amazon.com Inc., CTERA Networks Ltd., EMC Corp., Emulex Corp.,
F5 Networks Inc., Microsoft Corp. and NetApp Inc. Other prominent companies include: Agosto,
DataCore Software, Egnyte, Maldivica, Nasuni and Panzura.US cloud storage market There seems a rise in consumer demand for free
cloud storage, and with start-ups such as Trunx offering more storage for free, the profitability of the smaller scale cloud-storage
market may be in jeopardy. Leading analysts predict that data storage will soon be a free commodity. To ensure increased profits in the
cloud-storage market as a whole, companies will have to focus on higher data storage users, as well as IoT and cloud storage
compatibilities. The costs of cloud-storage will be replaced with the cost of professional tools and features associated with data storage
needs. One
exciting development in the cloud storage market is the development of the
Internet of Things. IoT products and solutions will grow dramatically in the next
few years from $1.9 trillion in 2013 to $7.1 trillion in 2020. With the growth of the
IoT market, the cloud storage and CSG market should simultaneously grow, as IoT
technologies rely increasingly on cloud-storage applications.
US free market drives competition- pushes cloud companies to expand globally
Leo Sun, 2-17-2015, "Will Google Inc. and Microsoft's Free Cloud Storage Wars Kill Box Inc.?," Motley
Fool, http://www.fool.com/investing/general/2015/02/17/duplicatewill-google-inc-and-microsofts-free-
cloud.aspx
Cloud storage is now cheaper than ever, thanks to the ongoing pricing war between
Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and several other rivals.
Microsoft recently offered 100 GB of cloud storage on its OneDrive service for two
years -- a $48 value based on its regular monthly price of $1.99 -- to users who sign up for a free Bing Rewards account. Bing
Rewards is a program that rewards Bing search users with points that can be redeemed for gift cards or other items. Mean while,
Google started offering users an additional 2 GB of permanent space in exchange
for completing a "security checkup" on their Drive accounts. Dropbox also offered
users an additional gigabyte of storage to users who installed Mailbox, its own email
client.
Tech Sector High
Tech industry growing
Thomas J. Casey, 1-22-2015, "2015 Technology Industry Trends," Pwc Network,
http://www.strategyand.pwc.com/perspectives/2015-technology-trends
The tech industry is always in flux. Frequent new products and category innovation
define and redefine the sectors constantly shifting landscape. But lately weve seen
even greater volatility than usual, and it has begun to affect the makeup of
hardware and software companies themselves. Increasingly, technology firms are
reexamining the structure of their businesses and taking bold steps to squeeze out
better financial performance. They are doing this because their profit margins and market share are under siege from
disruptive, often well-funded startups and other aggressive competitors. The competition, in turn, has made customers more
demanding.
They are seeking greater performance, better features, and more platform
independence and flexibility at the lowest price point possible. This volatility is manifested in a
flurry of attempted and consummated mergers, acquisitions, and divestitures. In the early fall of 2014, for example, multiple major
business publications reported that Hewlett-Packard was in talks to purchase storage equipment maker EMC, primarily to improve
scale and cut costs. Both sides refused to comment on any possible deal, and none occurred. Then, in November, HP announced that it
was splitting in two, separating its computer and printer hardware business (HP Inc.) from its enterprise hardware, software, and
services units (Hewlett-Packard Enterprise). HPs goal for the split is to allow both units, which will each generate more than US$50
billion in revenue and be Fortune 50 companies, to become more nimble and focused on their respective markets and competitors.
With this breakup, the two companies will have to find ways to improve the performance of slow-growth businesses struggling to
maintain decent profit margins.
Tech globalization now

Michael Gerrity, 7-14-2015, "Technology is Reshaping the Global Property Industry," World Property
Journal, http://www.worldpropertyjournal.com/real-estate-news/united-states/elie-finegold-technology-
impact-of-real-estate-industry-real-estate-technology-trends-disruptive-real-estate-technologies-9220.php
Technology is Reshaping the Global Property Industry Technological innovation is

radically changing how and where people choose to work, live and play on a global
scale, essentially forcing us to rethink the built environment--and our place in it. To address these issues, Elie Finegold, senior vice
president of global innovation and business intelligence at CBRE Group, Inc., recently discussed three emerging trends that are
reshaping the way people will use real estate in the future with Blueprint, CBRE's global online magazine. According to Finegold ,
from broad access to WiFi and the ubiquity of smartphones to ever-lighter laptops
and more powerful tablet devices, technology has created an inextricably connected
world. With the virtual barrier between work and home all but gone, the way people
think about real estate is fundamentally changing. "This industrial-era concept that there is a separation between
work and home is becoming increasingly less relevant," he says. "Because you can work from anywhere, space has become more
fungible." Finegold, an innovator and entrepreneur with expertise in real estate and technology, says there are three emerging trends
reshaping the way people will use real estate in the future. The ability of people and machines to work from anywhere is transforming
the utilization of traditional spaces. "If you conduct a survey and ask people, 'Have you worked in a living room, a bedroom, a plane,
an office, an elevator, somebody else's house--even a bathroom?' everyone is going to answer yes to almost every one of them,"
Finegold says. "There's a whole set of tasks that were once capable of only being done in an office that we can now do from anywhere,
and though working face-to-face with others will likely never become obsolete, companies are going to be looking for much more
adaptable real estate frameworks as a way of managing both flex in the workforce and the diversity of working habits," he adds.
COLLABORATIVE ECONOMY As people increasingly choose to share and
crowdsource goods, services, funding and transportation, the real estate market
must adapt to new ways of distributing demands, Finegold says. The sharing economy created affordable
solutions for consumers during the Great Recession and has offered unique income streams for people who need extra cash or more
flexible work situations. For instance, Airbnb and Uber have enabled people to turn their homes and vehicles into sources of income.
As people migrate to cities, they may prefer to rent apartments or cars rather than own them. Similarly, if more people are going into
business for themselves as freelancers or contractors, the demand for coworking spaces could outweigh the need for traditional office
space. TRANSPORTATION REVOLUTION The rise of autonomous vehicles and transportation--self-driving cars, multi-modal
trucking, distribution drones, etc.--coupled with collaborative models like Uber, will make it easier for people and goods to move
around more freely. It may also ultimately change infrastructure needs, Finegold says, cutting down on
the number of cars on the road or in parking lots at any given moment, while simultaneously creating a competitive market for space
utilization. "There will be huge opportunities for redevelopment of spaces previously used for personal vehicles, from streetside
parking spots to multilevel parking decks," Finegold says. While some of these trends may be in the distant future, aspects of all three
already exist, and they are quickly creating new modes for people to access real estate, Finegold says.
Tech Sector Low
Tech innovation is slowing down an example is in the oil & gas industry
Martha Aviles, Marthaleads both customer training and product marketing for Drillinginfo. Martha has an
MBA from The University of Texas., 7-14-2015, "Technology Innovation and Adoption in Oil & Gas
Industry," Forbes, http://www.forbes.com/sites/drillinginfo/2015/07/14/technology-innovation-and-
adoption-in-oil-gas-industry-why-did-it-slow/
As weve discussed before, the great crew change is a real concern in the oil & gas industry. Another obvious concern is
the slow pace of technology adoption. The oil & gas industry has historically relied
upon rudimentary paper-based technology and really had no need to think outside of the box because
companies were too busy developing resources and making money. Just a year ago, WTI was
over $100 a barrel, and since the economics worked so well, there was no real push toward finding
efficiencies. And in the oil and gas industry, there was no real precedent for updating products and
tools when compared to other industries where the pace of technology adoption is widespread. Faster, Better, Cheaper is the Norm
The technology industry grew up on a foundation of innovation, and even leapfrog products are not really that surprising. Whether it
is a consumer product, network security infrastructure or semiconductors, the technology industry is well-versed in the concept of
obsolescence, and there is the expectation that something new and better will always be just around the corner. For example, after
Ultra HD 4K televisions were announced, many consumers were either buying them or had a plan to buy one when prices dropped.
Suddenly, early adopters began abandoning 1080p and retailers dropped prices on the current, but now old technology, to help move
inventory and introduce televisions that still did not have content to support it. What? Thats right, 4K content is rare, so even if you
have this high-end piece of gadgetry in your home entertainment system, companies are still working on delivering something you can
actually watch in 4K. In this tech-frenzy world, consumers and businesses alike will always eagerly await the latest shiny object.
US tech falling behind other countries

Kevin Ashton 06/2015 [the co-founder and former executive director of the MIT Auto-ID Center,
coined the term Internet of Things. His book How to Fly a Horse: The Secret History of Creation,
Invention, and Discovery was published by Doubleday earlier this year] "America last?," The Agenda,
http://www.politico.com/agenda/story/2015/06/kevin-ashton-internet-of-things-in-the-us-000102
And, while they were not mentioning it, some key indicators began swinging away from the U.S. In
2005, Chinas high-
tech exports exceeded Americas for the first time. In 2009, just after Wen Jiabao spoke about the
Internet of Things, Germanys high-tech exports exceeded Americas as well. Today,
Germany produces five times more high tech per capita than the United States. Singapore and
Koreas high-tech exporters are also far more productive than Americas and, according to the most recent data, are close to
pushing the U.S. down to fifth place in the worlds high-tech economy. And, as the most recent data are
for 2013, that may have happened already. This decline will surprise many Americans, including
many American policymakers and pundits, who assume U.S. leadership simply
transfers from one tech revolution to the next. After all, that next revolution, the Internet of Things, was
born in America, so perhaps it seems natural that America will lead. Many U.S. commentators spin a myth that America is No. 1 in
high tech, then extend it to claims that Europe is lagging because of excessive government regulation, and hints that Asians are not
innovators and entrepreneurs, but mere imitators with cheap labor. This is jingoistic nonsense that could not be more wrong. Not only
does Germany, a leader of the European Union, lead the U.S. in high tech, but EU member states fund CERN, the European
Organization for Nuclear Research, which invented the World Wide Web and built the Large Hadron Collider, likely to be a source of
several centuries of high-tech innovation. (U.S. government intervention killed Americas equivalent particle physics program, the
Superconducting Super Collider, in 1993 an early symptom of declining federal investment in basic research.) Asia, the alleged
imitator, is anything but. Apples
iPhone, for example, so often held up as the epitome of
American innovation, looked a lot like a Korean phone, the LG KE850, which was
revealed and released before Apples product. Most of the technology in the iPhone was invented in, and is exported by,
Asian countries.
Cloud High
Cloud usage is growing
Kim Weins, 2-18-2015, "Cloud Computing Trends: 2015 State of the Cloud Survey," Rightscale,
http://www.rightscale.com/blog/cloud-industry-insights/cloud-computing-trends-2015-state-cloud-survey
The 2015 State of the Cloud Survey shows that cloud adoption is growing and most
enterprises are leveraging multiple cloud environments that combine both public and private cloud
options. As a result, central IT teams are stepping in to offer cloud infrastructure services to
their organizations while ensuring governance and control over costs. This shift of cloud
adoption from shadow IT to a strategic imperative is a critical step in the move to a cloud-centric future.
Exponential growth consumers see opportunity in cloud computing

Brett Relander, 3-27-2015, "Cloud-Computing: An industry In Exponential Growth," Investopedia,
http://www.investopedia.com/articles/investing/032715/cloudcomputing-industry-exponential-
growth.asp#ixzz3fyT6NevZ
Investors today have far more options available than in the past. Among these options is the cloud. Nasdaq reported that
last year revenues for cloud services grew by 60 percent. Furthermore, cloud computing is
anticipated to continue growing at a robust rate over the course of the next five
years. If you are considering investing in a technology-based company, there are certainly many advantages. By owning stock in a
company offering cloud-based services, you will not only be able to follow the latest trends but also have the opportunity to make
money from the explosive growth of this industry. Before getting involved in cloud computing investing, however, it is important to
understand what is involved, what is driving the growth in this industry, and the best way to plan your cloud investments. What Is
Cloud Computing? Before you consider investing in cloud computing, it is a good idea to have a basic understanding of
exactly what it is. While many of us enjoy the ability to upload photos, documents, and videos to "the cloud" and then retrieve them at
our convenience, the concept of cloud computing is somewhat abstract. The heart of cloud computing is fairly simple.
Companies providing cloud services make it possible to store data and applications
remotely, and then access those files via the Internet. (For a background on the Internet industry from
which cloud computing has emerged, see article: The Industry Handbook: The Internet Industry.) Cloud computing is
primarily comprised of three services: infrastructure as a service (IaaS), software as a service (SaaS),
and platform as a service (Paas). Software as a service is expected to experience the fastest growth, followed by infrastructure
as a service. According to research conducted by Forrester, the cloud computing market is anticipated to
grow from $58 billion in 2013 to more than $191 billion by the year 2020. Software as a
Service (SaaS) Deployed online, SaaS involves the licensure of an application to customers. Licenses are typically provided through a
pay-as-you-go model or on-demand. This rapidly growing market could provide an excellent investment opportunity, with Goldman
Sachs reporting that SaaS software revenues are expected to reach $106 billion by next year. Infrastructure as a Service (IaaS)
Infrastructure as a service involves a method for delivering everything from operating systems to servers and storage through IP-based
connectivity as part of an on-demand service. Clients can avoid the need to purchase software or servers, and instead procure these
resources in an outsourced on-demand service. Platform as a Service (PaaS) Of the three layers of cloud-based computing, PaaS is
considered the most complex. While PaaS shares some similarities with SaaS, the primary difference is that instead of delivering
software online, it is actually a platform for creating software that is delivered via the Internet. Forrester research indicates that PaaS
solutions are expected to generate $44 billion in revenues by the year 2020. What Is Driving Growth in Cloud Computing The rise of
cloud-based software has offered companies from all sectors a number of benefits, including the ability to use software from any
device, either via a native app or a browser. As a result, users are able to carry over their files and settings to other devices in a
completely seamless manner. Cloud computing is about far more than just accessing files on
multiple devices, however. Thanks to cloud-computing services, users can check their email on any computer and even store files
using services such as Dropbox and Google Drive. Cloud-computing services also make it possible for users to back up their music,
files, and photos, ensuring that those files are immediately available in the event of a hard drive crash .
Driving the growth
in the cloud industry is the cost savings associated with the ability to outsource the
software and hardware necessary for tech services. According to Nasdaq, investments in key strategic
areas such as big data analytics, enterprise mobile, security and cloud technology, is expected to increase to more than $40 million by
2018. With
cloud-based services expected to increase exponentially in the future, there
has never been a better time to invest, but it is important to make sure you do so cautiously. (See article: A
Primer On Investing In The Tech Industry.)
A2: Cloud computing fails government may think that way, but the opposite is
reality
Steve Towns, 6-1-2011, "Preparing for Cloud Computing Failures," Governing the states and localities,
http://www.governing.com/columns/tech-talk/Preparing-for-Cloud-Computings-Failure.html
Problems in April with Amazons cloud computing platform sparked media

questions about cloud computings readiness for prime time. The well publicized incident on April
21 brought down a number of websites, including news aggregator Reddit and Q&A site Quora. Ultimately, though, the incident is
unlikely to slow governments adoption of the new computing technique. Government
CIOs have been wary of
moving their data and software applications to Internet-based cloud services run by
private companies, often citing concerns about reliability and security of systems over which they hav[ing]e
little control. But wide adoption of the technology and the desire to control costs is
gradually breaking down public-sector resistance. Indeed, CIOs who gathered in Washington, D.C., for
the National Association of State Chief Information Officers Midyear Conference in May ranked cloud computing among their
highest priorities in an onsite poll taken by the organization. The Amazon incident did little to dampen their interest. Did it give us
pause for a minute? Probably, says Michigan CIO David Behen. But
quite frankly, the whole idea about
security around the cloud is something that we just need to educate more people
about. The private industry is using the cloud for everything, and government needs
to embrace that. Behens recession-wracked state has been a leader in sharing computer systems among state agencies and
between state and local entities. Behen sees cloud computing as a tool for sharing technology resources on an even broader scale.
Behen and others may be ready to move forward on cloud computing initiatives, but they say that the Amazon incident also holds
lessons for public agencies moving data and computer applications to the cloud. The new computing model puts a premium on
choosing reliable cloud contractors, since agencies depend on them to host websites, store data and run computer programs. It also
demands more attention on contract terms that hold contractors accountable for outages and performance problems.
Cloud Low
Cloud disappearing businesses arent interested
Bernard Golden, 6-4-2014, "Has Cloud Computing Been a Failed Revolution?," CIO,
http://www.cio.com/article/2375736/cloud-computing/has-cloud-computing-been-a-failed-revolution.html
When It Comes to Cloud Computing, Most Companies Aren't Trying As Leong notes,
many IT organizations fail to understand the key characteristics of cloud computing and, as a
result, fall far short of actually operating real cloud environments. While she didn't detail the
issues she found in the discussions she's had with IT professionals, I'd bet they revolve around clients failing to grasp the importance
of self-service, easy elasticity and resource usage-based billing. Simply put, many traditional IT organizations
view these characteristics as optional add-ons that some providers have put into operation namely,
Amazon Web Services but not really critical as part of internal cloud implementations .
Moreover, too many of them view automated infrastructure as something that will improve the internal workings of IT operations, not
as something relevant to the company at large.
Private clouds are failing now research explains the reasons

Tom Bittman, 9-12-2014, "Why Are Private Clouds Failing?," Gartner Blog Network,
http://blogs.gartner.com/thomas_bittman/2014/09/12/why-are-private-clouds-failing/
Why Are Private Clouds Failing? I recently wrote a research note to explain what weve been seeing from our client base. In
thousands of interactions, there are very specific patterns for private cloud successes and failures. The top ten reasons (in
no particular order) that private clouds are failing are: cloud failsFocusing Exclusively on Operational Benefits:
Thinking private cloud is an internal IT project only. Building the Wrong
Expectations or None At All: Business case and metrics are key. Defending IT: Building private cloud to
protect ITs turf. Doing Too Little: Often, private cloud really means virtualization, with maybe some automation
Doing Too Much: Putting in everything including the kitchen sink. Optimized for everything, so it is
optimized for nothing. Focusing Strictly on Infrastructure: VMs are not enough somethings got to run inside
them. Failure to Change the Operational Model: Jamming cloud into your existing process model and org
structure aint gonna work. Failure to Focus on People: Your staff can be your biggest supporters, or your biggest
roadblocks. Google the possible etymology of the word sabotage. Failure to Change the Funding Model:
When you build a drive-thru service model, you better get paid first. Using the Wrong Technologies: Choices,
choices whats tactically right might be strategically wrong.
Cloud computing fails technological pitfalls are abundant

Reuven Cohen, 7-2-2012, "Cloud Computing Forecast: Cloudy With A Chance of Fail," Forbes,
http://www.forbes.com/sites/reuvencohen/2012/07/02/cloud-computing-forecast-cloudy-with-a-chance-of-
fail/
Amazons Cloud service is having a bad a couple weeks. Forthe second time in as many weeks Amazons
East Coast cloud crashed during a severe storm that left 1.3 million in the
Washington D.C. area without power. The outage brought down numerous high
profile web sites hosted on Amazon including Netflix, Instagram, Pinterest, and
Heroku. Making things worse was the fact that other cloud services hosted in the area experienced no downtime. I spoke briefly
to George Branch, Director of Service Delivery for Washington D.C. based cloud provider Virtustream, who told me The Virtustream
Data Center was generally unaffected by the storms in the region. We did not have to switch over to generator at any time and we
remain on utility power at the facility. Due to problems with one of our telephone vendors, we did lose access to our 877 telephone
support line. (Disclosure, the author of this post is employed by Virtustream) This
isnt the first time a lightning storm
has taken down Amazons cloud. Back in 2009, a lightning storm caused damage to a single
power distribution unit which resulted in a wide scale outage for the company. The
latest outage brings new and unneeded attention to the potential pitfalls of hosting in the cloud. Krishnan Subramanian, a well
respected technology expert with focus on cloud computing notes In the clouds, if you dont design for failure, you are destined to
fail. A possible solution is the use of a hybrid cloud approach that combines many data centers and cloud based resources into a
federated global cloud. This approach is quickly becoming a preferred deployment model for enterprises looking to use the cloud but
who dont want to put all their eggs in one basket. In a post on GigaOM, Steve Zivanic, VP of marketing for Nirvanix, proposes a
multi cloud approach saying, Its becoming rather clear that the answer for [Amazon's] customers is not to try to master the AWS
cloud and learn how to leverage multiple availability zones in an attempt to avoid the next outage but rather to look into a multi-
vendor cloud strategy to ensure continuous business operations.You can spend days, months and years trying to master AWS or you
could simply do what large-scale IT organizations have been doing for decades rely on more than one vendor. In a conversation,
Ben Kepes, a prominent New Zealand based technology analyst who focuses on cloud computing, said, Outages happen and the onus
is on the user to architect accordingly. That said there seems to be a suggestion that in this case there was a degree of culpability on the
part of AWS. Im waiting to see a definitive post mortem until deriding AWS for this event. At the end of the day however multi site,
multi provider and automated failover are increasingly important. In a blog post, Nati Shalom, CTO and Founder of GigaSpaces, an
Israeli Platform as a service company wrote, The general lesson from this and previous failures is actually not new. To be fair, this
lesson is not specific to AWS or to any cloud service. Failures are inevitable, and often happen when
and where we least expect them to. Instead of trying to prevent failure from happening we should design our
systems to cope with failure. The method of dealing with failures is also not that new use redundancy, dont rely on a single point
failure (including a data center or even a data center provider). Automate the fail-over process. Heres the problem with the blame
the customer sentiment: many new cloud users have a hard time learning the rules of the road. A quick search for AWS failure
planning on the Amazons Web Services forums resulted in little additional insights and really appears to be mostly about trial and
error. In the case of outages, which happens to everyone at some point, it seems Amazon, along with the various industry pundits,
expects you to design your architecture correctly for these kinds of events through redundancy. For example, use multiple VMs across
multiple availability zones. Amazon expects a certain level of knowledge of both system administration as well as how AWS itself has
been designed to be used. The mantra is novice users need not apply or should use at their own risk. This certainly doesnt seem to be
all that clear to a new user who hears that cloud computing is safe and the answer to all the worlds IT problems. That claim, in itself,
should be a red flag. The
problem is twofold. An over hyped technology and unclear failure
models combine to create a perfect storm. You need the late adopters for the real revenue opportunities, but
these same late adopters require a different gentler kind of cloud service. One that is a little more platform focused rather than
infrastructure focused. Complicating things is the reality that a lot of the easy to use platforms, such as SalesForces Heroku, were
also offline during the outage. A big part of the pitch to use these sorts of cloud platforms is that they hide the infrastructure
complexity so developers can focus on the more important parts of building applications.
Internet Econ Strong
Internet economies are high around the globe and United States is in the lead
Mckinsey Global Institute, May 2011. "Sizing the Internet economy," Mckinsey & Company,
http://www.mckinsey.com/features/sizing_the_internet
The United States leads the global Internet supply ecosystem.

The United States captures more than 30
percent of global Internet revenues and more than 40 percent of net income. Using a
proprietary model, the McKinsey Internet supply leadership Index, we show[s] that the
United States remains the largest player in the internet supply ecosystem . It is the country
with the most diverse structure within the global ecosystem among the 13 we analyzed in this research, garnering relatively equal
contributions from hardware, software and services, and telecommunications. The
United Kingdom and Sweden
are changing the game. These two countries have leveraged very strong Internet usage across the
board to gain greater importance within the global Internet ecosystem. This move is helped by the
strength and strong performance of their telecom operators. India and China are
strengthening their position in the global Internet ecosystem rapidly . Both countries show
growth rates of more than 20 percent. France, Canada, and Germany have strong Internet usage.
All three could leverage this usage to increase their presence in the global supply ecosystem. South Korea is rapidly accelerating its
influence on the internet economy at a faster rate than Japan. Brazil, Russia, and Italy arein the early stages of Internet supply. They all
have strong potential for growth.
Internal Link
No Data Localization
Countries wont localize due to loses
Makivama in 14 (Hosku Lee-Makivama, director of European Centre for International Political
Economy (ECIPE) and a leading author on trade diplomacy, EU-Far East relations and the digital economy.
ECIPE, 7-16-2015, "The costs of data localization," http://www.ecipe.org/blog/the-costs-of-data-
localization/)
In the aftermath of recent revelations on mass-scale electronic surveillance, there

has been a widespread proliferation of internet restrictions. One of the most drastic,
yet a common policy response to the problem has been the mandatory requirement
on storing critical data on servers physically located inside the country. This policy
of data localisation has been considered by a number of countries including Brazil,
where the multistakeholder summit NetMundial 2014 is taking place this week.What
Brazil and other countries like China, the European Union, India, Indonesia, Korea and
Vietnam (who all have considered similar strategies) fail or choose to fail to see, is that
information security is not a function of where data is physically stored or
processed. A forthcoming [released on May 15th] study by ECIPE economists shows that cross-
border data flow is essential for developing economies to secure access to foreign markets and participation
in global supply chains. Thus, data is a major sources of growth, jobs and new
investments. Manufacturing and exports are highly dependent on access to support services at
competitive prices services that depend on secure and efficient access to data. Forced data
localisation affects any business that uses the internet to produce, deliver, and
receive payments for their work, or to pay their salaries and taxes . The results of our
study show that even the current language of Brazils Marco Civil da Internet (without mandatory data
localization) results in a GDP loss of -0.2%; EU GDPR results in -0.4%. Other results include China (-
1.1%), India (-0.1%), Indonesia (-0.5%), Korea (-0.4%) and Vietnam (-1.7%) for their internet policies.An
economy-wide data localisation requirement (or discriminatory barriers to that effect) would substantially
increase the GDP loss if they are enforced: Brazil (-0.8%), the EU (-1.1%), India (-0.8%), Indonesia (-
0.7%), Korea (-1.1%). Even conservative estimates are sufficient to eradicate all post-crisis economic
recovery, benefits from all their currently negotiated trade agreements, or may even cause social unrest in
some countries.Impact on investments is also considerable: Brazil (at least -4.2%), China (-1.8%), the EU
(-3.9%), India (-1.4%), Indonesia (-2.3%), Korea (-0.5%) and Vietnam (-3.1%). Exports of China and
Indonesia also decrease by -1.7% as a direct consequence of loss of competitiveness.
Welfare losses (expressed as actual financial loss by its citizens) are up to 63bn USD for China and 193 bn
USD for the EU. The findings show that the negative impact from disrupting data should not be ignored.
The globalised economy has made unilateral trade restrictions a counterproductive strategy that puts the
country at a relative loss to others, with no possibilities to mitigate the negative impact in the long term.
Forced localisation is often the product of poor, one-sided economic analysis, often with the surreptitious
objective of keeping foreign competitors out although economic and security gains are too small to
outweigh losses in terms of jobs and output in the general economy.
The cost of data localization is not worth the gains companies wont leave
Marel, Makivama, and Bauer in 15(Published May 2014 by Erik van der
MArel, Hosku Lee-Makivama, Matthias Bauer ECIPE, 7-15-2015,
"The Costs of Data Localisation: A Friendly Fire on Economic Recovery,"
http://www.ecipe.org/publications/dataloc/ )
This paper aims to quantify the losses that result from data localisation requirements and related data
privacy and security laws that discriminate against foreign suppliers of data, and downstream goods and
services providers, using GTAP8. The study looks at the effects of recently proposed or
enacted legislation in seven jurisdictions, namely Brazil, China, the European Union
(EU), India, Indonesia, South Korea and Vietnam.Access to foreign markets and
globalised supply chains are the major sources of growth, jobs and new investments
in particular for developing economies. Manu- facturing and exports are also
dependent on having access to a broad range of services at competitive prices,
which depend on secure and efficient access to data. Data localisation potentially affects any
business that uses the internet to produce, deliver, and receive payments for their work, or to pay their
salaries and taxes.The impact of recently proposed or enacted legislation on GDP is
substantial in all seven countries: Brazil (-0.2%), China (-1.1%), EU (-0.4%), India (-0.1%),
Indone- sia (-0.5%), Korea (-0.4%) and Vietnam (-1.7%). These changes significantly affect
post-crisis economic recovery and can undo the productivity increases from major
trade agreements, while economic growth is often instrumental to social stability.If
these countries would also introduce economy-wide data localisation requirements
that apply across all sectors of the economy, GDP losses would be even higher: Brazil (-
0.8%), the EU (-1.1%), India (-0.8%), Indonesia (-0.7%), Korea (-1.1%).The impact on overall domestic
investments is also considerable: Brazil (-4.2%), China (-1.8%), the EU (-3.9%), India (-1.4%), Indonesia
(-2.3%), Korea (-0.5%) and Vietnam (-3.1). Exports of China and Indonesia also decrease by -1.7% as a
consequence of direct loss of competitiveness.Welfare losses (expressed as actual economic losses by the
citizens) amount to up to $63 bn for China and $193 bn for the EU. For India, the loss per worker is
equivalent to 11% of the average month salary, and almost 13 percent in China and around 20% in Korea
and Brazil.The findings show that the negative impact of disrupting cross-border data flows
should not be ignored. The globalised economy has made unilateral trade restric-
tions a counterproductive strategy that puts the country at a relative loss to others,
with no possibilities to mitigate the negative impact in the long run. Forced locali-
sation is often the product of poor or one-sided economic analysis, with the sur-
reptitious objective of keeping foreign competitors out. Any gains stemming from
data localisation are too small to outweigh losses in terms of welfare and output in
the general economy.
Big tech companies are not going to localize their data

Miller in 14 (Claire Cain Miller, 1-24-2014, "Google Pushes Back Against Data Localization,"
Bits Blog, http://bits.blogs.nytimes.com/2014/01/24/google-pushes-back-against-data-localization/, NB)
The big tech companies have put forth a united front when it comes to pushing back
against the government after revelations of mass surveillance. But their cooperation
goes only so far. Microsoft this week suggested that it would deepen its existing
efforts to allow customers to store their data near them and outside the United
States. Google, for its part, has been fighting this notion of so-called data localization.
If data localization and other efforts are successful, then what we will face is the
effective Balkanization of the Internet and the creation of a splinternet broken up
into smaller national and regional pieces, with barriers around each of the splintered
Internets to replace the global Internet we know today, Richard Salgado, Googles
director of law enforcement and information security, told a congressional panel in
November. Data crisscrosses the globe among data centers, and companies often
store redundant copies of data in different places in case of natural disaster or
technical failure. In most cases, companies cannot even pinpoint precisely where
certain data is located. At the same time, the United States government is tapping
the fiber-optic network that connects data centers worldwide, according to leaked
documents. So even if data is stored outside the United States, it could be
intercepted during its travels. Still, Microsoft and other tech companies are trying to
prevent foreign customers from switching to services outside the United States. In
the next three years, the cloud computing industry could lose $180 billion, 25
percent of its revenue, because of such defections, according to Forrester, a research
company. Yet even though Google faces these same risks and requests from foreign
customers, its policy position is for surveillance reform instead of data localization ,
according to a person briefed on Googles policy who would speak only anonymously.
Though Google at one time tried to offer customers the ability to store their data in one location in response
to requests, it does not offer that feature now because it determined it was illogical, the person said.
Google decided data is more secure if it is stored in multiple locations and that
storing it in one location slows Google services and makes accessing the data less
convenient for customers, the person said. Mr. Salgado said a proposed law in Brazil that would
require all data of Brazilian citizens and companies to be stored in the country would be so difficult to
comply with that Google could be barred from doing business in one of the worlds most
significant markets. For a great many around the globe, the Snowden disclosures revealed a
disturbing relationship between the major U.S. technology firms and the American
national security establishment. Specifically, the disclosures showed that Yahoo, Google, and
other large American tech companies had provided the NSA with access to the data
of the users of their services. Although there were many programs that tied the major American
firms to the NSA, three in particular drew special ire: the much-discussed PRISM7
program, a collaborative effort between the NSA and the FBI which compelled
Internet companies to hand over data held within servers located on U.S. soil in
response a subpoena issued by a special intelligence court, and two programs known
as MUSCULAR and TEMPORA,89 both of which allowed the NSA (in partnership
with Britains signals intelligence agency, the GCHQ) to access information
transmitted through the data communication links of American-owned firms
located outside the U.S., where statutory limitations on data collection are far less
stringent.10 he fact that American companies provided the U.S. government with information and access
to data (knowingly in some cases, apparently unwittingly in others) has led many foreign leaders to
conclude that only domestic firms or at least non-American firms operating
exclusively within local jurisdictions, can be trusted to host the data of their citizens .
Prominent political voices around the globe have been anything but subtle in their articulation of this
assessment. Following the publication of the PRISM program in the Guardian newspaper, German
Interior Minister Hans-Peter Friedrich declared that, whoever fears their
communication is being intercepted in any way should use services that don't go
through American servers.11 Frances Minister for the Digital Economy similarly insisted that it
was now necessary to locate datacenters and servers in [French] national territory in order to better ensure
data security.12 Brazilian President Dilma Rousseff agreed, insisting that, " there is a serious
problem of storage databases abroad. That certain situation we will no longer
accept."13 Unsurprisingly, these declarations from government officials at the
ministerial level and higher, and the policy responses those declarations suggest, are
profoundly troubling to American technology companies. U.S. firms have issued dire
warnings in response,14 predicting that they could lose tens of billions of dollars in revenue abroad as
distrustful foreign governments and customers move either by choice or by legal mandate to non-U.S.
alternatives. Firms fear that the anti-American backlash and potentially resulting data
localization laws (depending on the specifics of the rules enacted) will mean that
they will be forced out of certain markets, or forced to build expensive and
oftentimes unnecessarily redundant data centers abroad. Analysts are suggesting the
fallout could mirror what happened to Huawei and ZTE, the Chinese technology and telecommunications
firms that were forced to abandon some U.S. contracts when American lawmakers accused the companies
of planting in their products coding backdoors for the Chinese Peoples Liberation Army and intelligence
services. 15 A much-cited estimate16 by the Information Technology and
Yes Data Localization
Companies are leaving now due to growing security concerns and US companies are
complying now - but increased transparency, collaboration and reformation of the
NSA can reverse the trend
Katharine Kendrick(Kendrick is a policy associate for Internet communications technologies at
the NYU Stern Center for Business and Human Rights, Capital Flows, 2-19-2015, "Risky Business: Data
Localization," Forbes, http://www.forbes.com/sites/realspin/2015/02/19/risky-business-data-localization/,
NB)
Since the Charlie Hebdo attacks last month, the French government is considering
requiring greater website blocking by Internet companies, U.K. Prime Minister David
Cameron has suggested banning encrypted messaging services like WhatsApp, and multiple countries are
talking about increased surveillance powers. Put these scenarios in Russia or China and
American tech companies would be up in arms. Theres another demand that European
governments and repressive regimes alike are making and, in the long run, its more
dangerous: data localizationrequiring foreign companies to store citizens data
within a countrys borders. We should be concerned at the number of governments
proposing this type of data sovereignty and how some companiesrather than
pushing backare rushing to comply. Internet experts have long criticized localization
requirements, which suggest that data should be stored based on political needs, rather than technical
efficiency. These requirements contribute to a trend of atomizing todays global Internet into country-level
networks. They put a burden on companies, and pose risks to political activists and
human rights defenders by making their information more accessible to authorities.
Yet, according to the general counsel of online storage company Dropbox, more than
20 governments proposed localization in the last year. For many, the stated reason
has been not domestic monitoring, but rather protection against foreign government
(read: American) spying. Germany has led efforts in Western Europe arguing measures
like local storage and Europe-only routing as protection from the NSAs reach. This
may be politically attractive, but its doubtful whether localizing actually affords that protection technically
while instead giving a new government more access to user data. Its concerning how major U.S.
tech companies are responding to these requests. Hurting from lost sales in the wake
of the Snowden leaks, Amazon, Salesforce, IBM and Oracle are responding to this
climate by proactively setting up data centers in Germanyabsent a requirement .
To be fair, some companies need servers closer to customers for performance and efficiency. But
companies like Amazon admit that they are driven, in part, by political pressure to
regain trust with European customers. For some companies, enabling data sovereignty is now a
selling point. In December, Russian President Vladimir Putin signed a bill mandating that foreign
companies store Russian citizens data on servers within Russia and give Russian security forces greater
access to user information. This is just one more tactic in years of efforts to invade Russian citizens
privacy, which U.S. tech companies have been caught up in before. Similarly, when Apple gained
access to Chinawhich Tim Cook predicts will be the companys biggest market the company
agreed to store user data on mainland servers, assuaging government stated fears
over data security and NSA access. Almost immediately Apples iCloud data was hacked in a
likely state-sponsored attempt to intercept citizens usernames and passwords. U.S. companies eagerness to
please the EU affects their leverage in a place like Russia or China, and undermines their principled calls
for a global Internet. Just as weve seen the emergence of company best practices to minimize how
information is censored, we need best practices to minimize risks in where it is stored.
Companies should take the following steps: Avoid localizing in a repressive country
whenever possible. When Yahoo! entered Vietnam, to meet performance needs
without enabling the governments Internet repression, it based its servers in
Singapore. Explore global solutions. Companies like Apple and Google have started
encrypting more data by default to minimize inappropriate access by any
government. This doesnt solve everything, but its a step forward for user privacy.
Minimize exposure. If you must have an in-country presence, take steps to minimize
risk by being strategic in what staff and services you locate there. Embrace
transparency. A growing number of companies have increased transparency by
issuing reports on the number of government requests they receive. They should also
publish legal requirements like localization, so that people understand the
underlying risks to their data. Work together. Companies should coordinate
advocacy in difficult markets through organizations like the Global Network
Initiative. Tech companies can take a proactive, collective approach, rather than
responding reactively when their case hits the headlines. We can only expect localization
demands to increaseand business pressures to pull in the opposite direction. While
the political dynamics have shifted, companies should still have respect for human
rightsand the strength of the global Internetat the forefront of decisions over
where to store their data.
Big companies are privatizing their cloud computing now - Amazon proves, the
public cloud is becoming useless because of security concerns
Asay in 14(Matt Asay, 6-3-2014, "In Big Companies, The Public Cloud Is Leaving The Private
Cloud In The Dust," ReadWrite, http://readwrite.com/2014/06/03/public-cloud-dominates-enterprise-
cloud, NB)
For years we've been told that enterprises wouldn't put their sensitive data into
the public cloud, particularly Amazon Web Services. We've been reminded, over
and over, that companies value control and security too much to entrust their
applications to someone else's public data center. Then when it became clear that
Amazon's cloud business was exploding, we were told enterprises were only
running dev and test workloads there. The good stuff was still running behind
the firewall, and always would. Today, it's clear that such reasoning is flawed
and completely out-of-whack with actual enterprise computing trend, which
heavily favor public cloud computing. How did the experts get cloud so
amazingly, patently wrong? Because in our rush to listen to what enterprises said
they wanted, we failed to focus on what they demonstrably do, which is to buy
convenience. Nor is it just the private cloud providers that have struggled
against Amazon. Despite (literally) billions of dollars being spent to create
competitive offerings, Amazon's domination among its public cloud peers hasn't
budged, as Gartner's latest Magic Quadrant makes clear While Gartner analyst
Lydia Leong cautions that "AWS currently has a multiyear competitive
advantage, but is no longer the only fast-moving, innovative, global-class
provider in the market," a multi-year advantage and an immense amount of
developer fealty pose difficult obstacles for Amazon's rivals to overcome.
Couple that with the trickiness of making internal resources play nicely with
private cloud roll-outs and you have a perfect storm for people giving up on
internal resources altogether, as InfoWorld's Eric Knorr suggests: The
common-denominator benefit of the private cloud is the move to commodity
scale-out infrastructure. That sounds fantasticbut it's not what most
enterprises have in place. Bending your existing infrastructure to
accommodate a vast private cloud, not to mention migrating the lion's share
of legacy applications to that cloud, is a losing proposition. The reason for
Amazon's continued rise is simple: Amazon Web Services makes technology simple
to acquire and offers a host of platform services that developers find easy to use. In
short, convenience rules, and AWS delivers convenience . The signs are all around
us that convenience trumps most everything. From the GitHub generation's
emphasis on licensing freedom to the trend toward open source (no need to
get corporate bureaucracy involved) and the equally big trend toward
software-as-a-service (remove IT from the purchasing equation), enterprise IT
adoption is taking the path of least resistance, and is being driven by
developers. In a conversation with Redmonk analyst Stephen O'Grady, he put
it this way: In almost every case, a physical server will outperform the virtual
equivalent offered up by public clouds. And yet the adoption of public cloud
has been sufficient to force Dell to go private, IBM to decommit from the x86
server market entirely and HP to try and charge for firmware upgrades. This
is the power of convenience. Much like the camera you have with you being
better than the high end SLR too heavy to carry around, developersthe new
kingmakers within the enterpriseare heavily advantaging time to
productivity when it comes to technology selection. While this trend is
perhaps easiest to articulate in relation to developers, aMcKinsey survey of IT
management reveals much the same. IT plans to spend much less on
infrastructure (servers, etc.) and far more on "innovation." While innovation is
a very nebulous term, the survey data suggests that IT is divorcing itself from
the idea that "innovation requires me to run my applications in my data
center." Despite the obvious rise of public cloud computing, some argue that the
real cloud winner is hybrid clouds. For example, Eucalyptus CEO Marten Mickos,
whose company makes blending AWS cloud workloads seamless with
Eucalyptus private cloud workloads, argues that the distinction between
"public" and "private" is fading: In Mickos' view, distinctions between public and
private clouds become meaningless over time. He may be right. But if so, public
cloud still trumps because enterprises looking to run workloads "in the cloud" will
start with public resources like AWS and bolt on private cloud resources like
Eucalyptus. The starting point, in other words, is AWS, not the data center.
And the reason? AWS delivers the convenience that developers crave . Only those
vendors who manage to seamlessly combine the convenience of AWS with
the sometime need of behind-the-firewall control of private cloud computing
(which Eucalyptus aims to do) will remain relevant.
Huge corporations are blocking out America data servers now this crashes the
economy
Miller in 14(Claire Cain Miller, 3-21-2014, "Revelations of N.S.A. Spying Cost U.S. Tech Companies,"
New York Times, http://www.nytimes.com/2014/03/22/business/fallout-from-snowden-hurting-bottom-line-
of-tech-companies.html#story-continues-7, NB)
Microsoft has lost customers, including the government of Brazil. IBM is

spending more than a billion dollars to build data centers overseas to reassure
foreign customers that their information is safe from prying eyes in the United
States government. And tech companies abroad, from Europe to South America, say
they are gaining customers that are shunning United States providers, suspicious
because of the revelations by Edward J. Snowden that tied these providers to the
National Security Agencys vast surveillance program. Even as Washington
grapples with the diplomatic and political fallout of Mr. Snowdens leaks, the
more urgent issue, companies and analysts say, is economic. Technology
executives, including Mark Zuckerberg of Facebook, raised the issue when
they went to the White House on Friday for a meeting with President Obama.
It is impossible to see now the full economic ramifications of the spying
disclosures in part because most companies are locked in multiyear
contracts but the pieces are beginning to add up as businesses question the
trustworthiness of American technology products . The confirmation hearing last
week for the new N.S.A. chief, the video appearance of Mr. Snowden at a
technology conference in Texas and the drip of new details about government
spying have kept attention focused on an issue that many tech executives
hoped would go away. Despite the tech companies assertions that they
provide information on their customers only when required under law and
not knowingly through a back door the perception that they enabled the spying
program has lingered. Its clear to every single tech company that this is affecting
their bottom line, said Daniel Castro, a senior analyst at the Information
Technology and Innovation Foundation, who predicted that the United States
cloud computing industry could lose $35 billion by 2016. Forrester Research, a
technology research firm, said the losses could be as high as $180 billion, or 25
percent of industry revenue, based on the size of the cloud computing, web hosting
and outsourcing markets and the worst case for damages. The business effect of the
disclosures about the N.S.A. is felt most in the daily conversations between tech
companies with products to pitch and their wary customers . The topic of
surveillance, which rarely came up before, is now the new normal in these
conversations, as one tech company executive described it. Were hearing from
customers, especially global enterprise customers, that they care more than ever
about where their content is stored and how it is used and secured, said John E.
Frank, deputy general counsel at Microsoft, which has been publicizing that it
allows customers to store their data in Microsoft data centers in certain
countries. At the same time, Mr. Castro said, companies say they believe the
federal government is only making a bad situation worse . Most of the companies
in this space are very frustrated because there hasnt been any kind of
response thats made it so they can go back to their customers and say, See,
this is whats different now, you can trust us again, he said. In some cases,
that has meant forgoing potential revenue. Though it is hard to quantify
missed opportunities, American businesses are being left off some requests for
proposals from foreign customers that previously would have included them, said
James Staten, a cloud computing analyst at Forrester who has read clients
requests for proposals. There are German companies, Mr. Staten said,
explicitly not inviting certain American companies to join . He added, Its like,
Well, the very best vendor to do this is IBM, and you didnt invite them. The
result has been a boon for foreign companies. Runbox, a Norwegian email service
that markets itself as an alternative to American services like Gmail and says
it does not comply with foreign court orders seeking personal information,
reported a 34 percent annual increase in customers after news of the N.S.A.
surveillance. Brazil and the European Union, which had used American undersea
cables for intercontinental communication, last month decided to build their own
cables between Brazil and Portugal, and gave the contract to Brazilian and Spanish
companies. Brazil also announced plans to abandon Microsoft Outlook for its own
email system that uses Brazilian data centers . Mark J. Barrenechea, chief
executive of OpenText, Canadas largest software company, said an anti-American
attitude took root after the passage of the Patriot Act, the counterterrorism law
passed after 9/11 that expanded the governments surveillance powers. But the
volume of the discussion has risen significantly post-Snowden , he said. For
instance, after the N.S.A. surveillance was revealed , one of OpenTexts clients, a
global steel manufacturer based in Britain, demanded that its data not cross United
States borders. Issues like privacy are more important than finding the cheapest
price, said Matthias Kunisch, a German software executive who spurned
United States cloud computing providers for Deutsche Telekom. Because of
Snowden, our customers have the perception that American companies have
connections to the N.S.A. Security analysts say that ultimately the fallout from
Mr. Snowdens revelations could mimic what happened to Huawei, the Chinese
technology and telecommunications company, which was forced to abandon major
acquisitions and contracts when American lawmakers claimed that the companys
products contained a backdoor for the Peoples Liberation Army of China even
though this claim was never definitively verified. Silicon Valley companies have
complained to government officials that federal actions are hurting American
technology businesses. But companies fall silent when it comes to specifics
about economic harm, whether to avoid frightening shareholders or because
it is too early to produce concrete evidence. The companies need to keep
the priority on the government to do something about it, but they dont have
the evidence to go to the government and say billions of dollars are not
coming to this country, Mr. Staten said. Some American companies say the
business hit has been minor at most. John T. Chambers, the chief executive of
Cisco Systems, said in an interview that the N.S.A. disclosures had not
affected Ciscos sales in a major way. Although deals in Europe and Asia
have been slower to close, he said, they are still being completed an
experience echoed by several other computing companies. Still, the business
blowback can be felt in other ways than lost customers . Security analysts say
tech companies have collectively spent millions and possibly billions of dollars
adding state-of-the-art encryption features to consumer services, like Google search
and Microsoft Outlook, and to the cables that link data centers at Google, Yahoo
and other companies. IBM said in January that it would spend $1.2 billion to build
15 new data centers, including in London, Hong Kong and Sydney, Australia, to lure
foreign customers that are sensitive about the location of their data.
Salesforce.com announced similar plans this month. Germany and Brazil,
where it was revealed that the N.S.A. spied on government leaders, have been
particularly adversarial toward American companies and the government.
Lawmakers, including in Germany, are considering legislation that would make it
costly or even technically impossible for American tech companies to operate inside
their borders. Yet some government officials say laws like this could have a
motive other than protecting privacy. Shutting out American companies
means more business for local companies, Richard A. Clarke, a former
White House counterterrorism adviser, said last month.
The economic fallout will be devastated if ongoing trends are not reversed cloud
computing industry, tech sales overseas, and data localization are all impacts
Strauss in 14 (Mark Strauss, 7-29-2014, "The U.S. Economy Is A Casualty Of NSA Surveillance
Programs," io9, http://io9.com/the-u-s-economy-is-a-casualty-of-nsa-surveillance-prog-1612667629, NB)
Ever since Edward Snowden revealed the true extent of the National Security
Agency's surveillance methods, the public debate has focused mostly on
issues of privacy and national security. But new evidence shows that
the fallout from the NSA backlash is wider than we thought,
and could cost U.S. companies billions. A report published today by
the Open Technology Institute has categorized and quantified
these costs, with the ominous conclusion that "the NSA's
actions have already begun to, and will continue to, cause
significant damage to the interests of the United States and
the global Internet community." The scrupulously researched, 60-page
study is worth reading in full, but here are some of the most significant
findings: Costs to the Cloud Computing and Web Hosting Industries
Given heightened concern about the NSA's ability to access
data stored by U.S. companies, American companies that offer
cloud computing and webhosting services are experiencing the
most acute economic fallout. Nearly 50 percent of worldwide
cloud computing revenue comes from the United States, and
the domestic market more than tripled in value from 2008 to
2014. However, within weeks of the first revelation, reports began to emerge
that American cloud computing companies like Dropbox and Amazon
Web Services were losing business to overseas competitors.
The NSA's PRISM program is predicted to cost the cloud
computing industry from $22 to $180 billion over the next three
years. Costs to Overseas Tech Sales The economic impact of NSA spying
does not end with the American cloud computing industry. In the past year, a
number of American companies have reported declining sales
in overseas markets, loss of customers, and increased
competition from non-U.S. services marketing themselves as
"secure" alternatives to popular American products . In November
2013, Cisco became one of the first companies to publicly discuss the
negative impact of the NSA on its business. Qualcomm, IBM, Microsoft,
and Hewlett-Packard have all reported that sales are down in
China as a result of the NSA revelations. Mandatory Data
Localization The NSA disclosures appear to have given ammunition to
proponents of greater national control of traffic and network infrastructure,
accelerating the number and scope of data localization and
national routing proposals intending to limit the amount of
global Internet traffic and data that passes through or is
stored in the U.S. Now, more than a dozen countries, including
Germany, Brazil, and India, have introduced or are actively
discussing data localization laws, which would prevent or limit
information flows. Brazil, for instance, has proposed that Internet
companies like Facebook and Google must set up local data centers in order
to bind them by Brazilian privacy laws. Perhaps the most bitter irony of all is
that the localization of Internet traffic could make it easier for countries to
engage in national surveillance, censorship and persecution of online
dissidents. The NSA's methods might be on the verge of going viral.
US Economy Not Decoupled
US Economy strong Rising Dollar
Snider 1/27 (Jeffrey, Chief Investment Strategist of Alhambra Investment Partners, The US Economy Has
Not Decoupled, The Rising Dollar Reflects Global Trouble, Contra Corner,
http://davidstockmanscontracorner.com/the-us-economy-has-not-decoupled-the-rising-dollar-reflects-
global-trouble/, January 27th 2015, accessed 7/15/15)
Its interesting in that if you actually look at Caterpillars dealer sales volume, the idea of decoupling never makes it past the housing
bust. It is actually very clear that the global economy is the global economy, and that one piece is never long out of alignment with the
majority. The decoupling fantasy from 2008 lasted only until Lehman Brothers recoupled global economic existence in the
nightmare of a collapse. But that has now been repeated, with 2012 standing in where 2006 and the housing bust started the decline
last time. If anything, the global economy, as using Caterpillar as a proxy for productive investment agrees and
correlates so closely with so many other indications, has been more closely aligned in
the post-crisis era than before which is not a comforting factor given where all this is heading. There is nothing in
that quoted passage that I would agree with, as US companies are not less competitive but simply
unable to sell products in economies that are clearly falling apart. A full part of the
reason they are doing so is that central banks have destroyed the innate ability of
the global economy to allocate resources based on anything other than skewed
financialism. Thus, tightening in the dollar acts as a massive restraint at a time
when growth prospects have dimmed since 2012. If the dollar were rising as a
result of US recovery strength, I highly doubt the credit markets, which are conspicuously
absent from every one of these kinds of excuses, would be so bearish. Instead, credit markets and the
dollar are highly complementary, as are these earnings reports, of a broad-based
breakdown. Energy, the dollar, overseas economies. It seems as if the only thing in the world
going in the right direction right now is the parts of the US economy that best
advocate buying more stocks. But even in this respect, there is too much contradiction for it to survive the times.
The dollar will assure that earnings decline in more than just the energy sector ,
meaning that even that excuse will have to be inconveniently set aside in the very near future. Thats because the global
economy truly runs not on a rising or falling dollar, but is desperate for a stable
currency regime. That is where the global recovery is hiding, somewhere waiting out the endless monetarism and its
deleterious effects on actual business everywhere. The Treasury Secretary proclaims adherence to a
strong dollar when instead that very result is causing all this trouble; that is simply because nobody
seems to remember what a strong dollar actually means anymore fluctuations
up and down are financialisms, and thus the direction does not matter as it is all bad.
What it used to mean is exactly the kind of stability that fosters true economic
recovery and advance, with full wages, wealth and all.
US hasnt decoupled No Oil Tax Cut
Stockman 1/13 (David, a former businessman and U.S. politician who served as a Republican U.S.
Representative from the state of Michigan and as the Director of the Office of Management and Budget,
The US Hasnt Decoupled And There Aint No Giant Oil Tax Cut, Contra
Corner,http://davidstockmanscontracorner.com/the-us-hasnt-decoupled-and-there-aint-no-giant-oil-tax-cut/,
January 13th 2015, accessed 7/15/15)
The false narrative is an old standby that is usually revived when worrisome clouds form on the global horizon .
Namely, that
the US economy has decoupled from the troubles brewing abroad; and that this
time the collapse of crude oil amounts to a giant tax cut that will send US
consumers into a frenzy of new spending, thereby fueling a surge of hiring, income and growth. Nice
theorybut its not going to happen. In the first place, the plunge in oil prices is not
a tax cut and its doesnt put a dime into the pockets of any consumer. That whole notion
is just one more example of ritual incantationa baseless repetitive refrain that flows from Keynesian doctrine and Wall Street
bullhorns. Now
the net gain to the US economy of the $120 billion difference is nothing
to sneeze ateven if it does amount to only 1% of the current $12 trillion of PCE. Yet
even that is not all that meets the eye. In the first place, net oil imports are virtually certain to continuing falling in 2015
notwithstanding lower prices to domestic producers. That is owing to the sunk capital phenomenon, which is especially true in the
capital intensive petroleum industry, and especially in the shale patch. Based
on fields already opened,
production infrastructure in place and wells already drilled, shale oil production is
likely to continue rising this year- along with condensates and NGLs from the wet
gas fields. In all, the net benefit to the US economy-even on a crude first order basisis likely to
be less than $100 billion per year. Moreover, some of that re-allocated spending will go to
imports of goods and services, reducing the mathematical net gain even more. After
all, net imports on the current account amount to nearly 15% of GDP; and the
overwhelming share of stuff that might benefit from spending reallocation-
shoes, shirts, i-Pads,furniture, flat-screen TVs and all the other trinkets sold at Wal-Mart- still come
from China and its satellites.
US Economy diverging still linked to global econ
Watson 2/13 (Michelle, Chief Investment Officer, First Republic Investment Management Northern
California, 2015 Outlook: US Diverging, Not Decoupling, From Global Economy, First Republic,
https://www.firstrepublic.com/community/life-and-money/investments/2015-outlook-us-diverging-not-
decoupling-from-global-economy, February 13th 2015, accessed 7/15/15)
Given the strong U.S. economic results relative to overseas counterparts during the past year, it was not surprising that 2014
investment returns in the U.S. dominated other global markets. With
the health of the domestic economy
improving, the Federal Reserve stopped quantitative easing in October and shifted
toward raising U.S. interest rates. Meanwhile, their counterparts overseas have new
easing programs under way, leading many financial experts to say that the U.S. has
decoupled, or separated, from the rest of the world. We prefer the term
diverging, defined as moving in different directions but still linked. Increasing divergence
is the overriding theme of our 2015 outlook. U.S. markets outperformed other markets in 2014 due in
part to diverging fundamental, technical and economic policy differences. The
divergence was most apparent in the equity market, where the S&P 500 returned
double digits for the year, while both the MSCI EAFE Index and MSCI Emerging
Markets Index declined. This divergence was exacerbated by the surging dollar,
which flipped gains in local currency terms to losses when measured in U.S. dollars.
Similar success was seen in other areas as well. U.S. fixed income generally enjoyed higher returns
than bonds in other developed countries. The standout performer for 2014 in the asset classes we follow was
U.S. real estate investment trusts (REITs), which were up 30% for the year. For 2015, we expect the positive momentum for the U.S.
economy to continue. However, believing our economy can operate independent of the rest of the world is somewhat simplistic and
risky. We are connected to the overseas economies in many ways, but explicitly
through the financial markets and commodity markets. The following are some examples of that
interconnectivity: One reason U.S. interest rates are low is that our intermediate and long-
term bond yields are more attractive than Japanese and German fixed income
instruments on a relative basis. So when the Federal Reserve ended its quantitative
easing, demand from U.S. and global institutional and retail investors took up the
slack. The dollar is strong not only because our economy is growing, but also
because Japan and the eurozone are further reducing their interest rates through
monetary programs, driving global demand for dollars. Our stock market is benefiting from our
better relative fundamentals as overseas investors choose to invest here rather than in other parts of the world. The U.S.
equity market is reflecting this in its higher valuation relative to other markets and
its own historical valuations. U.S. oil production is a big reason why global oil prices have declined. Lower energy
prices have positive implications for U.S. consumers, but other countries benefit as well. Because the vast majority of Asia imports its
energy, lower prices should boost their economies. Last
year, the United States was the dominant
player within the global economy, and we expect more of the same in 2015. We favor
U.S. equities over international equities and U.S. fixed income over our global
counterparts but would hold international investments given simulative monetary
policy overseas. We are being very selective in choosing assets tied to energy as the shifting structure of the oil market will
create distinct winners and losers. Fed policy changes are coming, and while the Fed has tried to hint at its thinking on the interest rate
changes, rates will be changing direction for the first time since 2008. Change is often accompanied by greater volatility. With this in
mind, we recommend reviewing your financial objectives and taking the time to connect with your advisor to make sure your portfolio
is positioned appropriately.
US not decoupling inflation, yield curve, Europe, credit spreads, stock market,
GDP
Bilello 1/20 (Charlie, the Director of Research at Pension Partners, LLC, an investment advisor that
manages mutual funds and separate accounts. He is the co-author of two award-winning research papers in
2014 on Intermarket Analysis and investing. Mr. Bilello is responsible for strategy development,
investment research and communicating the firms investment themes and portfolio positioning to clients,
IS THE U.S. REALLY DECOUPLING FROM THE WORLD?, Pension Partners,
http://pensionpartners.com/blog/?p=1225, January 20th 2015, accessed 7/15/15)
One of the key themes of 2014 was this notion that the U.S. was decoupling from the
world. The narrative Japan may be in recession, Europe in a deflationary collapse,
and China slowing but the U.S. is strong and is an island unto itself. The narrative,
though, is not the same as reality. While the U.S. economy has certainly fared better than its global peers, an
acceleration we have yet to see, with real GDP still showing the slowest post-war recovery in history and real wage growth telling
the same story. What, then, are investors basing their decoupling theme on? Very simply, the
U.S. stock market,
which to put it mildly has been trouncing its global peers since 2010. Five years of
outperformance is a long time and enough to build a strong case for just about
anything. If we look away from just the large cap stock indices, though, the U.S. story looks more like Europe and Japan than
most investors may want to believe. First, inflation expectations in the U.S. have been falling
precipitously over the past year with breakeven rates (2-years through 30-years) back to their lowest
levels since 2009. Second, the yield curve in the U.S. is flattening, down to a 129 bps
spread between the 10-year yield and the 2-year yield. Third, like Europe and
Japan, U.S. long duration yields have plummeted over the past year. The 30-year
Treasury yield is at a new all-time low, below the crisis lows of 2008. Fourth, credit
spreads in the U.S. are widening, with the high yield index showing a 542 basis point
spread, up from 388 basis point one year ago and 335 basis points last June. Fifth,
within the U.S. stock market it is not cyclical but defensive sectors (Utilities, Health
Care, and Consumer Staples) that have been outpacing the S&P 500 since the
beginning of 2014. Sixth, if we look past lagging indicators like GDP and focus
instead on leading indicators, they are telling a different story. The growth rate on the ECRI
Weekly Leading Index has moved into negative territory, at its lowest level in three years. Similarly, the U.S. composite PMI Output
index is showing its slowest rate of expansion in 14 months.
US interest rates key to growth in global economy

Marthuros 14 (Fon, Head of Media, Public Engagement at World Economic Forum, US Interest Rates
Hold Key to Continuing Growth in Global Economy in 2015, http://www.weforum.org/news/us-interest-
rates-hold-key-continuing-growth-global-economy-2015-0, September 10th 2014, accessed 7/16/15)
Tianjin, Peoples Republic of China, 10 September 2014 The

global economy has been performing
moderately well, but the pace of expansion in the first half of 2014 has been
surprisingly weak, panellists concluded at a session on the global economy on the first day of the eighth Annual Meeting of
the New Champions in Tianjin, China, on 10-12 September. More than 1,900 participants from 90 countries are taking part. This may
say something about the future, cautioned Min Zhu, Deputy Managing Director, International Monetary Fund (IMF), Washington
DC; World Economic Forum Foundation Board Member. The IMF is scaling down its 2014 forecast from
3.7% to just about 3%. It will release new projections on 7 October. The European
Union is struggling more at this time than we have foreseen earlier in the year, said
Victor Halberstadt, Professor of Economics, Leiden University, Netherlands. Germany will do better than the
periphery, but the rest of Europe will perform considerably below trend. France
and Italy, which account for a third of Europes economy, need to embark on
structural reforms to ensure sustainable recovery. The big question mark is the
timing of the US Federal Reserves normalization of interest rates. Asset prices are
being priced with the idea that higher interest rates will be long in coming and slow,
but the Fed is saying, no, its going to be faster than that, said Kenneth Rogoff, Thomas D.
Cabot Professor of Public Policy and Professor of Economics, Harvard University, USA. It might be a shock to the
system. Still, many countries may be more prepared today for the unwinding of US
quantitative easing than they were in May 2013, when the then Federal Reserve
chairman Ben Bernanke seemed to indicate that the US was ready to raise interest
rates. All in all, Latin America is ready, said Luis Alberto Moreno, President, Inter-American Development Bank,
Washington DC; World Economic Forum Foundation Board Member. GDP growth in China, the worlds
second largest economy, is slowing, but new engines of growth and structural
reforms promise to put the economy on a more sustainable path, said Li Daokui, Dean, The
Schwarzman Scholars Program, Tsinghua University, People's Republic of China. The slowdown is temporary. If
the restructuring is successful, there will be a U-shaped recovery. Japan, the worlds third
largest economy, is also on the mend. We are taming deflation, said Akira Amari, Minister for Economic Revitalization and Minister
for Economic and Fiscal Policy, of Japan. The focus now is on the governments so-called third arrow structural reforms such as
the elimination or easing of regulatory barriers and changes in labor policies, including encouraging women to rejoin and realize their
full potential in the workforce.
US Economy Decoupling
Countries not dependent on the US economy Chinas purchasing power
Bird 14 (Mike, a European markets reporter, working from London and covering financial and economic
issues, China Just Overtook The US As The World's Largest Economy, Business Insider,
http://www.businessinsider.com/china-overtakes-us-as-worlds-largest-economy-2014-10, October 8th 2014,
accessed 7/16/15)
Sorry, America. China just overtook the US to become the world's largest economy,
according to the International Monetary Fund. The simple logic is that prices aren't the same in each country: A shirt will
cost you less in Shanghai than in San Francisco, so it's not entirely reasonable to
compare countries without taking this into account. Though a typical person in
China earns a lot less than the typical person in the US, simply converting a Chinese
salary into dollars underestimates how much purchasing power that individual, and
therefore that country, might have. The Economist's Big Mac Index is a great example of these disparities. So the
IMF measures both GDP in market-exchange terms and in terms of purchasing power. On the purchasing-power
basis, China is overtaking the US right about now and becoming the world's biggest
economy. We've just gone past that crossover on the chart below, according to the IMF. By the end of 2014, China
will make up 16.48% of the world's purchasing-power adjusted GDP (or $17.632
trillion), and the US will make up just 16.28% (or $17.416 trillion).
US Economy Decoupling emerging markets and economies
The Economist 8 (Offers authoritative insight and opinion on international news, politics, business,
finance, science, technology and the connections between them, The decoupling debate, The Economist,
http://www.economist.com/node/10809267, March 6th 2008, accessed 7/15/15)
One reason is that while exports to America have stumbled, those to other emerging
economies have surged (see chart 1). China's growth in exports to America slowed to only
5% (in dollar terms) in the year to January, but exports to Brazil, India and Russia were
up by more than 60%, and those to oil exporters by 45%. Half of China's exports
now go to other emerging economies. Likewise, South Korea's exports to the United
States tumbled by 20% in the year to February, but its total exports rose by 20%,
thanks to trade with other developing nations. A second supporting factor is that in many emerging
markets domestic consumption and investment quickened during 2007. Their
consumer spending rose almost three times as fast as in the developed world. Investment
seems to be holding up even better: according to HSBC, real capital spending rose by a staggering 17% in emerging economies last
year, compared with only 1.2% in rich economies. Sceptics argue that much of this investment, especially in China, is in the export
less than 15% of China's investment is linked
sector and so will collapse as sales to America weaken. But
to exports. Over half is in infrastructure and property. It is not just China that is building power
plants, roads and railways; a large chunk of the Gulf's petrodollars are also being spent on gleaming skyscrapers and new airports
not to mention ski-domes in the desert. Mexico, Brazil and Russia
have also launched big infrastructure
projects that will take years to complete. The four biggest emerging economies,
which accounted for two-fifths of global GDP growth last year, are the least
dependent on the United States: exports to America account for just 8% of China's
GDP, 4% of India's, 3% of Brazil's and 1% of Russia's. Over 95% of China's
growth of 11.2% in the year to the fourth quarter came from domestic demand. China's
growth is widely expected to slow this yearit needs to, since even Wen Jiabao, the prime minister, warned this week of overheating
but to a still boisterous 9-10%. Smaller economies in Asia look more vulnerable. For example, Malaysia's
exports to
America amount to 22% of its GDP, and they fell by 18% in the year to December.
Yet its annual GDP growth jumped to 7.3% in the fourth quarter, thanks to consumer spending and a jump in government
infrastructure investment. Mexico's
exports to America are an even larger 27% of its GDP.
Real GDP growth held steady at 3.8% in the year to the fourth quarter, but manufacturing jobs are falling
and workers' remittances from abroad are falling. Retail sales grew by only 1% in the year to December. Yet the economy is holding
up better than during previous American downturns, partly because high oil revenues have enabled the government to increase
investment by around 50% over the past year. American downturns have often caused the prices of oil and other raw materials to
slump, but this time China's surging demand is propping up prices and fuelling booms in Brazil, Russia and the Middle East.
Brazil's exports jumped by 26% in the year to February. In turn, if prices stay
strong, so will China's exports to commodity-producing countries. A sharp
slowdown in China would hurt them more than an American recession will.
China key to global economy high domestic savings, government balance sheet,
reforms
Xinhua News 3/20 (the official press agency of the People's Republic of China, China key to global
economy: IMF chief, http://www.chinadailyasia.com/business/2015-03/20/content_15241535.html, March
20th 2015, accessed 7/16/15)
WASHINGTON - As China is moving its economy to a more inclusive, environment-

friendly, and sustainable growth path, the sustainability in the end will mean higher incomes in the country,
with even larger gains in consumption and living standards - a result good for both
China and the rest of the world, IMF Managing Director Christine Lagarde has said. China's economy
faces rising vulnerabilities in a number of areas, including real estate, local
government financing, and the financial system, she said. "In the near term, the risks
are manageable, thanks to a number of buffers, including high domestic savings, a
strong external position, and a still-robust government balance sheet. However, timely and
steadfast implementation of the reform agenda is needed both to prevent a further build-up of risks and put the economy on a
sustainable growth path," Lagarde said. Creating significant adjustment in many sectors of the
economy, China's comprehensive package of reforms may result in somewhat slower
growth in the near term but the costs will be more than offset by the benefits of
much higher income over the medium term. From a global perspective, the benefits
from stronger demand in China will result in higher global output over time, she said.
In regard to China's slower growth, the IMF chief said in an optimistic tone that the
slower growth is still "twice the rate of global growth!" China has contributed one-
third of global economic growth in the past seven years and is expected to remain an important engine
for the global economy, she said. Lagarde said the share of emerging economies in global GDP will
continue to increase, and much of the increase will be driven by the BRICS
countries, in particular by China and India. According to the IMF, EMDEs share in global GDP adjusted by
purchasing power is projected to rise from 57 percent in 2014 to about 60 percent in 2019.
India key to global economy 7.2% growth

The Economic Times 3/16 (India's Leading Business Newspaper offers Business News, Financial news,
Stock/Share Market News, Economy News, Loans & Banking, India bright spot in global economy, will
clock 7.2% growth: IMF, http://articles.economictimes.indiatimes.com/2015-03-
16/news/60174765_1_imf-chief-global-growth-global-economy, March 16th 2015, accessed 7/16/15)
NEW DELHI: Terming India a bright spot in the "cloudy" global economy, IMF Managing
Director Christine Lagarde today said the country will clock 7.2 per cent growth in the current
fiscal and its GDP will exceed combined total of Japan and Germany by 2019. "In this
cloudy global horizon, India is a bright spot. Recent policy reforms and improved business
confidence have provided a booster shot to economic activity," she said while speaking at a
function at Lady Shri Ram College here. On introduction of new series of national accounts with base year 2011-12, she said,
"Using India's new GDP series, the IMF expects growth to pick up to 7.2 per cent
this fiscal year and accelerate further to 7.5 per cent next year --- making India the
fastest growing large economy in the world." The IMF chief further said, "Indeed, a brighter future is being
forged right before your eyes. By 2019, the economy will more than double in size compared to
2009." When adjusting for differences in purchasing prices between economies,
India's GDP will exceed that of Japan and Germany combined, she said adding it
will also exceed the combined output of the three next largest emerging market
economies --- Russia, Brazil, and Indonesia. Lagarde further said, "Just as many countries around the world
are grappling with low growth, India has been marching in the opposite direction." India's growth rate this year is
expected to exceed that of China, she said, adding the country will also become the most populous in the world by
2030. The IMF chief believes that the conditions are ripe for India to reap the
demographic dividend and become a key engine for global growth as it (the country) is on the
verge of a new chapter, filled with immense promise. On world economy, she said, "More than six years after the global financial
crisis, the recovery remains too slow, too brittle, and too lopsided. We have pared down our forecasts of global growth since last
October, despite the boost from cheaper oil and stronger US growth." While the global economy is expected to grow by 3.5 per cent
this year, and 3.7 per cent next year, this is still below what could have been expected after such a crisis, she added.
Internet Not Key to Global Econ
Top Level
The Internets positive influence is overhyped the washing machine has done more
for our economy
Dave Masko, award-winning foreign correspondent and photojournalist, 7-16-2015, "Internets Impact
Exaggerated, Washing Machine Does More," Read Wave, http://www.readwave.com/internet-s-impact-
exaggerated-washing-machine-does-more_s85070
Story and photo by Dave Masko EUGENE, Oregon Data

collected by the Pew Internet & American
Life Project finds the Internet being hyped as something great when ITs not. Still, there
are many University of Oregon students admitting to spending lots of time surfing the Internet because they are lonely or bored.
Are you kidding, if I had a girlfriend and in love I would hardly spend my weekends surfing the Net for what for just more mind
fxxx you know; its just a way to think you are something when you are just another loser; lost and lonely online, admits senior Brian
Kelleher. In turn, Kelleher points to a recent lecture he viewed online when researching an economics assignment. The lecture by
Nobel Prize nominee Ha-Joon Chang really opened my eyes to the power of Internet branding and marketing over the past 25 years
the Net has existed, Kelleher explained. Basically, Professor
Chang stated that the Internets impact
is vastly exaggerated; while showing how the washing machine has done way more
for our society and various cultures worldwide than the Internet because not
everyone on Earth today uses views online knowledge as something of value. Frankly,
Professor Chang opened my eyes as to why so many of us are blind when it comes to Internet hype being just more bullxxxx.
Meanwhile, this interview with Kelleher took place a few months ago when this university senior was single. After letting go of my
Internet addiction, I met a like-minded student named Carol who got me outside in the real world when not in class. You know what, I
feel really alive again thanks to Carols view that we unplug from the machine we dont really need the Net. Its great to be offline and
loving life again. Carol and I even go to the laundry and use our favorite new machine the washing machine, joked Kelleher who is
pictured walking around campus with Carol on a bright and beautiful April 30, 2015 spring day in Eugene. In fact, Kelleher said
Professor Changs lecture raised eyebrows here at the University of Oregons famed Wearable Computing Lab that was founded in
1995 at the dawn of the so-called information-era. While Kelleher thinks digital-age fans here on campus view the Internet as
revolutionizing just about everything, they took pause when Professor Chang a famed University of Cambridge, England,
economist presented interesting views on why the washing machine helps more people worldwide than the Net ever could.
Professor Chang argues that the Internets revolutionary is pretty harmless, noting that, Instead
of reading a paper,
we now read the news online. Instead of buying books at a store, we buy them on-
line. Whats so revolutionary? The Internet has mainly affected our leisure life. In
short, the washing machine has allowed women to get into the labor market so that
we have nearly doubled the work force. Moreover, Professor Chang questions all the hype about the good stuff
the Internet is doing for the poor. Charities are now working to give people in poor countries access to the Internet. But shouldnt we
spend that money on providing health clinics and safe water, writes Professor Chang. While the digital revolution has helped make
the shift from traditional industry, the clothes washer technology also has been revolutionary because it reduces the drudgery of
scrubbing and rubbing clothing, the professor added. Professor Chang is viewed as one of the foremost thinkers on new economics
and development. Hiseconomic textbook, 23 Things They Dont Tell You About Capitalism also details his
interest in how the washing machine is way more revolutionary than the Internet.
Thanks to washing machine technology, women started having fewer children,
gained more bargaining power in their relationships and enjoyed a higher status.
This liberation of women has done more for democracy than the Internet, states Professor
Changs lecture. The washing machine is a symbol of a fundamental change in how we look at women. It has changed society more
than the Internet. As one of the top economics professors in the world, Professor Chang likes to challenge his students to looking at
things in a different way. For instance, he notes that people like you and me have no memory of spending two hours a day washing
our clothes in cold water. This is part 8 for an occasional series titled: Tech: Hooked Into Machine, that is being offered to book
and website publishers. DAVE MASKO is award-winning foreign correspondent and photojournalist who has published prolifically in
top print newspapers and magazines online. He has reported on vital issues worldwide over the past 40 years. He accepts freelance
work. Contact him at dpmasko@msn.com.
A2: Developing Countries
Internet does not affect the econ of developing countries

Aboozar Hadavand, Submitted to the Graduate Faculty of Texas Tech University in Partial Fulfillment
of the Requirements for the Degree of MASTER OF ARTS, 5-1-2011, "The impact of the Internet on
economic growth in upper-middle-income countries," Academia,
http://www.academia.edu/3128230/The_impact_of_the_Internet_on_economic_growth_in_upper-middle-
income_countries
As expected, the
Internet does not have an effect on the countries in this study consistent
with its effect on developed countries. Factors that may explain the dissimilar
economic impacts of the Internet between developed and developing countries are: general education
differences, specific technical and language skills gap, along with the broader
institutional environment and different regulations in these countries. The results in this
paper suggest that the growth rate is enhanced by lower fertility rate, lower government consumption, lower inflation, and further
openness to trade.
Their evidence is demographically too specific survey proves the Internet has little
and even negative influence on developing countries
Pew Research Center's Global Attitudes Project, 3-19-2015, "Internet Seen as Positive Influence on
Education but Negative on Morality in Emerging and Developing Nations,"
http://www.pewglobal.org/2015/03/19/internet-seen-as-positive-influence-on-education-but-negative-
influence-on-morality-in-emerging-and-developing-nations/
Publics in emerging and developing nations are more convinced that the
internet is having a negative effect on
morality. A median of 42% say it is a bad influence on morality, while only 29% see
the internet as a good influence. And in no country surveyed does a majority say that
the internets influence on morality is a positive. However, many in these emerging and
developing nations are left out of the internet revolution entirely. A median of less
than half across the 32 countries surveyed use the internet at least occasionally ,
through either smartphones or other devices, though usage rates vary considerably. Computer ownership
also varies, from as little as 3% in Uganda to 78% in Russia.
Internet Key To Global Econ
Internet key to global economy statistics prove
EIU (The Economist Intelligence Unit), 2014, "The Hyperconnected Economy," The Economist,
http://www.economistinsights.com/sites/default/files/EIU-SAP%20Hyperconnected%20Economy%20-
%20executive%20summary%20%28global%29.pdf
The Internet is worth more to the global economy than more traditional industries
such as agriculture or energy. Estimates of the Internets contribution to GDP vary, but the consensus is that
it was worth more than 3.4% of major economies GDP by 2010-11 and that it is growing fast: by
2016 the value of the Internet is expected to double from 2010 levels. That makes it a major
part of the global economy, and it has a pronounced impact on economic growth rates. One consultancy calculates that the
Internet contributed 20% of GDP growth across 13 major economies in 2004-09, with
the European Commission saying that information and communications technology (ICT) accounted for one-third of the EUs growth
in 1995-2007. That is testament to the vital role that hyperconnectivity plays in modern society. Continued adoption of the Internet and
mobile technology will benefit all economies, but will be especially valuable to developing countries. Well under half of the worlds
population has Internet access, and the economic and social benefits of wider usage will be dramatic: industry research suggests that if
developing economies increased their Internet penetration to rich world levels, GDP growth rates would surge by 72% and 140m new
jobs would be created. Just as important, millions of lives would be saved through improved healthcare and hundreds of millions of
people would be lifted out of extreme poverty. There is also strong evidence that increasing smartphone usage can add to economic
growth, with many emerging markets already using mobile phones extensively for everything from banking to business information.
Developing countries need to spend heavily on infrastructure to realise the Internets potential, but the rewards on offer are big.
High now the mobile internet is a key to global economy

Wolfgang Bock, 2-10-2015, "The Growth of the Global Mobile Internet Economy," bcgperspectives,
https://www.bcgperspectives.com/content/articles/telecommunications_connected_world_growth_global_
mobile_internet_economy/
The Impact of the Mobile Economy The mobile Internet is already generating some $700 billion
in revenues annuallythe equivalent of $780 for every adultin the 13 countries that make up our
sample. The mobile Internet has also created approximately 3 million jobs in these
countries. Both revenues and jobs are growing as mobile access expands and people do more things with a widening selection of
devices. Mobile has only touched the surface in multiple industries that have an enormous impact on GDPhealth care, for example.
The Internet of Things and machine to machine (M2M) communicationstwo areas where the mobile Internet is expected to have
widespread impactare only in their infancy. The
mobile Internet attracts substantial investment.
For example, leading app-store operators paid developers more than $15 billion
between June 2013 and July 2014. Major companies, from telecommunications and cable service providers
(Verizon, Comcast, and AT&T, for example) to hardware, software, and semiconductor manufacturers (Hewlett-Packard, Microsoft,
Qualcomm) to content providers such as Netflix and Pandora, invest billions of dollars in R&D and capital expenditures, and
countless start-ups are also attracting investments, innovating, and launching new products. As
the volume of mobile
traffic and activity relentlessly expands, the complexity of the industry that
transports and delivers millions of terabytes of information every day increases
dramatically as well. The industry is evolving rapidly. Competition within and among ecosystems is
fueling innovation, diversity, and choice for end users.
High now look at GDP influence

Mckinsey Global Institute, May 2011. "Sizing the Internet economy," Mckinsey & Company,
http://www.mckinsey.com/features/sizing_the_internet_economy
The Internet is a vast mosaic of economic activity, ranging from millions of daily online transactions and communications to
smartphone downloads of TV shows. Little is known, however, about how the Net in its entirety contributes to global growth,
productivity, and employment. New McKinsey research examined the Internet economies of the G8 nations (Canada, France,
Germany, Italy, Japan, Russia, the United Kingdom, and the United States), as well as Brazil, China, India, South Korea, and Sweden.
It found that the
Internet accounts for a significant and growing portion of global GDP.
An extensive study by the McKinsey Global Institute (MGI)Internet matters: The
Nets sweeping impact on growth, jobs, and prosperityincludes these findings: The Internet accounts for 3.4 percent of overall GDP
in the 13 nations studied. More than half of that impact arises from private consumption, primarily online purchases and advertising.
An additional 29 percent flows from investments by private-sector companies in servers, software, and communications equipment.
The Internet economy, now larger than that of Spain, surpasses global industry
sectors such as agriculture and energy. The Internet is a critical element of economic progress, pushing a
significant portion of economic growth. Both our macroeconomic approach and our statistical approach show that in the
mature countries we studied, the Internet accounted for 10 percent of GDP over the
15-year period from 1995 to 2009, and its influence is expanding. Over the last five
years of that period, its contribution to GDP growth in these countries doubled, to
21 percent. If we look at the 13 countries in our scope, the Internet contributed 7 percent of growth from 1995 to 2009 and 11
percent from 2004 to 2009 (exhibit). In the global Nets growing ecosystem of suppliers, US companies play leading roles in key
sectors. China and India rank among the fast-growing players in the Internets global supply chain. Most of the economic value the
Internet creates falls outside of the technology sector: companies in more traditional industries capture 75 percent of the benefits. The
Internet is also a catalyst for generating jobs. Among 4,800 small and midsize enterprises surveyed, it created 2.6 of them for each lost
to technology-related efficiencies. These findings suggest that corporate leaders will need to sharpen their focus on the opportunities
the Internet offers for new products and expanded customer reach. Public-sector leaders ought to promote broad access to the Net,
since Internet usage, quality of infrastructures, and Internet expenditure are correlated with higher growth in GDP per capita.
Companies should also pay attention to how quickly Internet technologies can disrupt business models by radically changing markets
For governments, investments in infrastructure, human capital,
and driving efficiencies.
financial capital, and business-environment conditions will help strengthen their
Internet supply ecosystems.
Tech Key to US Economy
Tech currently holds a large share in the US economy
Fallon 15 (Nicole Fallon, Business News Daily Assistant Editor, Want a Tech Job? Differentiate
Yourself, 2/27/2015, Business News Daily, http://www.businessnewsdaily.com/7799-us-tech-job-
growth.html, DJE)
Looking for a job in tech? You might be in luck. A new report by IT industry trade association CompTIA
shows that tens of thousands of new tech jobs are popping up all across the country .
According to CompTIA's Cyberstates 2015 report, the American tech industry added 129,500 new jobs
between 2013 and 2014, bringing the total number of jobs in the industry to nearly 6.5 million, or 5.7
percent of the U.S. private sector workforce. This is good news for both the economy and job seekers
looking for tech positions. "The U.S. tech industry continues to make significant
contributions to our economy," Todd Thibodeaux, president and CEO of CompTIA,
said in a statement. "The tech industry accounts for 7.1 percent of the overall U.S. GDP
and 11.4 percent of the total U.S. private sector payroll. With annual average wages
that are more than double that of the private sector [overall], we should be doing all
we can to encourage the growth and vitality of our nation's tech industry." While
tech employment grew in the majority of states (38) over the last year, some states fared
better than others. CompTIA identified the following states as having the largest net gains and/or
employment rates in tech jobs. California 32,900 jobs added; 1.1 million employed Texas 20,100 jobs
added; 581,200 employed Florida 12,500 jobs added; 307,100 employed Massachusetts 8,700 jobs
added; 286,300 employed Michigan 8,100 jobs added; 196,005 employed New York 5,700 jobs added;
346,500 employed CompTIA's findings support recent data published by ZipRecruiter on the best cities to
find a tech startup job: Nearly half of the 25 cities on the list, including seven of the top 10, are located in
these six states. The Cyberstates report also found the tech industry segments with the most jobs added: IT
services (63,300); R&D, testing and engineering services (50,700); and telecommunications and Internet
services (21,100). This nation-wide employment growth is promising, but it doesn't mean the tech talent
wars are over. The industry is still highly competitive, and job seekers and employers alike need
strategies to face the industry's ever-evolving demands, said Tim Herbert, vice president of research and
market intelligence at CompTIA.
Specifically, information technology is an integral component of the economy

Lippis 15 (Nick Lippis, computer systems expert and designer, IT Organizational Design is Key to
Economic Growth, 3/9/2015, Open Networking User Group, https://opennetworkingusergroup.com/it-
organizational-design-is-key-to-economic-growth/, DJE)
Some argue that IT is a cost to business that needs to be minimized. Others argue that IT is
fundamental to business success. Im in the second camp. IT is fundamental to
productivity and competitive leadership. But how is IT linked to the global economy? Dr.
Books, my physics II professor, once asked the class, What is money? His answer: a delta in voltage or
a voltage change. That is, money is represented, distributed, exchanged electronically
and IT organizations develop the applications and infrastructure to enable value
movement within and between corporations and their customers. Think of American
Express, for instance. Is it a credit card company, or an IT organization that tracks tens of billions of dollars
of money and value transactions per year? Does McDonalds sell hamburgers or is it an IT organization that
controls the supply chain, logistics, and local marketing of food sold in some 35,000 outlets in 119
counties? If
IT is fundamental to business success, then its organizational model
should enable speed and innovation at the pace of business. It should be cost-conscious and
be much lower than todays silos. It should enable self-service so that business unit managers can roll at
their own pace. It should be open to all IT vendors and ideas so as to take advantage of open source projects
when appropriate. It should be able to take advantage of new waves of IT innovation, be it mobile or cloud
computing, as well as of fundamental changes within silos such as software-defined networking, software-
defined storage, cloud storage, among others.
Studies prove technological advancement is key to long term, sustained growth

Reikard 11 (Gordon Reikard, statistician and contributing editor, Stimulating Economic Growth
Through Technological Advance, 3/1/2011, AMSTAT News,
http://magazine.amstat.org/blog/2011/03/01/econgrowthmar11/, DJE)
As the economy moves from initial recovery to more sustained expansion, one of the
key policy issues is whether more investment in technology will boost the growth
rate. The issue takes on increased importance because the expansion has been anemic so far.
Looser fiscal and monetary policies successfully stimulated a recovery from the 20082009 recession, but
an increase in the rate of technological advance is needed to propel the economy into
a more lasting expansionary phase. It is only recently that policymakers have recognized the
relationship between technology and growth; President Obamas State of the Union speech explicitly
mentioned it. Historically, many of the policy debates in Washington have been about taxes and regulation,
and these debates have often been phrased in terms of the implications for growth. Unfortunately, these
debates have tended to sidestep the more fundamental issue. Removing regulatory barriers and cutting taxes
will, in general, result in a one-time increase in the level of gross domestic product (GDP), but not
necessarily influence its long-term rate of change, which depends critically on the rate of
technological progress. One of the most significant findings in the last 50 years is
that a large share of economic growthmore than one-thirdis driven by
technological advance. This originated with a seminal 1957 paper by Robert Solow titled Technical
Change and the Aggregate Production Function that was published in Review of Economics and Statistics.
Solow demonstrated that capital and labor accounted for less than two-thirds of growth.
The remainder was technology. Recent estimates indicate that, since the late 1940s,
about two-fifths of growth can be attributed to technology. The standard, broad measure of
technological advance is total factor productivity (TFP), which is the residual calculated by subtracting the
contributions of labor and physical capital from GDP. In the short run, TFP is volatile, but the fluctuations
average out over long periods of time. At lower frequencies or over longer periods, the trend in TFP
measures the rate of technological advance. Using the Bureau of Labor Statistics estimates,
technical advance has contributed to 38% of growth since 1948. But there were obvious
problems with the Solow model. TFP is, by construction, a residual, rather than a direct measure of
technology. In principle, it can encompass everything from new products or better products to process
improvements, reallocation of resources, and increases in efficiency. So, since the 1950s, there has been a
great deal of empirical workmuch of it by economic statisticianslinking TFP to observed measures of
technology. These studies have ascertained that TFP is highly correlated with patents and indexes of
scientific knowledge.
Digital technological growth is key to the overall economy

West 11 (Darrell M. West, Vice President and Director of Brookings Governance Studies and Founding
Director of the Center for Technology Innovation, Technology and the Innovation Economy, 10/19/2011,
The Brookings Institute, http://www.brookings.edu/research/papers/2011/10/19-technology-innovation-
west, DJE)
Innovation and entrepreneurship are crucial for long-term economic development.

Over the years, Americas well-being has been furthered by science and technology.
Fears set off by the Soviet Unions 1957 launch of its Sputnik satellite initiated a wave
of U.S. investment in science, engineering, aerospace, and technology. Both public
and private sector investment created jobs, built industries, fueled innovation, and
propelled the U.S. to leadership in a number of different fields. In this paper, I focus on
ways technology enables innovation and creates economic prosperity. I review the range of new advances
in education, health care, and communications, and make policy recommendations designed to encourage
an innovation economy. By adopting policies such as a permanent research and
development tax credit, more effective university knowledge commercialization,
improving STEM worker training, reasonable immigration reform, and regional
economic clusters, we can build an innovation economy and sustain our long-term
prosperity. The Link to Economic Prosperity Researchers have found a link between
technology innovation and national economic prosperity. For example, a study of
120 nations between 1980 and 2006 undertaken by Christine Qiang estimated that
each 10 percentage point increase in broadband penetration adds 1.3 percent to a
high income countrys gross domestic product and 1.21 percent for low to middle-
income nations.[i] In addition, Taylor Reynolds has analyzed the role of communication infrastructure
investment in economic recoveries among OECD countries and found that nearly all view technology
development as crucial to their economic stimulus packages.[ii] He demonstrates that there is a strong
connection between telecommunication investment and economic growth, especially following recessions.
These kinds of investments help countries create jobs and lay the groundwork for long-term economic
development. As a result, many nations around the world are investing in digital
infrastructure as a way to jump-start economies weakened by the recent financial
collapse. The decline in stock market valuations, rise in unemployment, and reduction in overall
economic growth has highlighted the need to target financial resources and develop national priorities. In
conditions of economic scarcity, countries no longer have the luxury of being passive and reactive. Instead,
they must be proactive and forward-looking, and think clearly about how to create the basis for sustainable
economic recoveries. Not surprisingly, given its long-term potential, a number of countries
have identified information technology as a crucial infrastructure need for national
development. Broadband is viewed in many places as a way to stimulate economic
development, social connections, and civic engagement. National leaders understand that
cross-cutting technology speeds innovation in areas such as health care, education,
communications, and social networking. When combined with organizational
changes, digital technology can generate powerful new efficiencies and economies of
scale.
Digital Technology is key to small businesses

Deloitte 14 (Deloitte Touche Tohmatsu Limited, consulting company, Small business, big technology
How the cloud enables rapid growth in SMBs, September 2014, Deloitte.com,
https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Technology-Media-
Telecommunications/gx-tmt-small-business-big-technology.pdf, DJE)
The fastest growing small businesses make extensive use of cloud technologies. This
finding from our research into the operating practices of small and medium businesses (SMBs) in five
European countries and the USA reflects the unprecedentedly rapid evolution of business practice in the
last decade. On average, SMBs using an above average number of cloud services grow
26 percent faster than those that use no cloud tools and are more profitable by 21
percent on average . Todays start-ups have immediate access to enterprise-grade technology 83
percent of start-ups we surveyed believe cloud technologies enable them to access
tools and technologies they would not have been able to afford otherwise. The most
successful start-ups use cloud technologies to help them overcome their most severe
challenges: access to capital and skills. Their reward is survival in the face of odds that see a
quarter of new businesses fail in the first two years. 1 Using cloud technologies enables businesses to create
a platform for extremely rapid growth in a world of open markets and simple global delivery of products
and services. We interviewed companies with average growth rates of 80 percent per
annum, and heard how they use the cloud to overcome the scalability and flexibility
challenges associated with growth rates more than ten times greater than average.
Significantly, 85 percent of the SMBs we surveyed believe that cloud technology enables them to scale and
grow faster . When growth slows and a business reaches maturity, the cloud offers leaders an
opportunity to simplify and streamline operations to unlock more capital to invest in
new phases of growth. 79 percent of relatively mature companies we surveyed
believe cloud technology enables access to new markets and revenue streams. It is
because of these benefits that 69 percent of survey respondents expect to increase their use of cloud based
technology in the next three years . In each of these three growth phases we found that the leaders of
successful SMBs are savvy about technology and about the cloud. They are experts in designing supporting
infrastructure to optimise when and how to deploy new capabilities onsite or in the cloud, when to tailor
technology for a business need and when to accept a good enough solution. None of their principles for
success require specialist knowledge. They are grounded on excellent business sense and can therefore be
readily applied to any business that is seeking to overcome typical business challenges and achieve growth.
Tech Not Key to US Economy
Tech not key companies dont even fully make use of existing digital tech AND
manufacturing is an alt cause
Tom and Fosler 14 (Josh Tom, Senior Analyst for The GailFosler Group , Gail D Fosler, president of
The GailFosler Group, How Important Is Digital Technology to Our Economic Future?: An Interview
With Rob Atkinson, Rob Atkinson is an economist and the president of the Information Technology and
Innovation Foundation, Gailfosler.com, http://www.gailfosler.com/important-digital-technology-economic-
future-interview-rob-atkinson, DJE)
Q: In 1987, Robert Solow famously wrote, You can see the computer age everywhere except in the
productivity numbers. Today, it seems you can see the digital revolution everywhere but in the economic
numbers. Where is this new age of prosperity that all the techno-optimists are talking about? Lets begin
with an important premise. Digital technology is an important dimension in our economy, but it is by
no means the only driver of economic activity or opportunity. In contrast to the
universal and almost magical properties that techno-optimists attribute to digital
technology, we need to make a critical distinction between the promise of technology
and the use of technology. People are blaming technology for not living up to its
promises because of poor economic performance in recent years when it is really its
use as manifest in the lack of basic investment in the economy that is limiting
growth. Without increased capital investment in equipment and software,
innovation and technology have no way to spread throughout the economy. Long-
run growth is lower as a consequence. The slowdown in investment has little to do
with technology. Rather it is due in part to an increasing short-termism on the part
of U.S. businesses, leading them to invest less for the longer term . As a result, we are
investing less in machines and equipment and structures than we did a decade ago. The slowdown also
appears to be caused by a decline in manufacturing. Manufacturing is a very high-
investment, high-productivity sector that pays good wages relative to some of the service industries. But
manufacturings decline is due in large part to international competition, not to
digital technology. Indeed, without digital manufacturing equipment and robotics
U.S. manufacturing would have become even less internationally competitive.
Advances in digital technology have created important new industries and new jobs.
Unfortunately, the decline in manufacturing has offset these gains to a great extent.
Technologys benefit to the economy is overstated the benefits are concentrated

among a small portion of the population
Bhajaria 15 (Nishant Bhajaria, senior product architect at Nike and a career coach, Why isn't the tech
boom helping the economy?, 5/5/2015, LinkedIn, https://www.linkedin.com/pulse/why-isnt-tech-boom-
helping-economy-nishant-bhajaria, DJE)
As I wrote last week, the hi-tech sector in the U.S. is red hot in terms of job opportunities. Even
as the
rest of the economy barely registers a pulse for many, hi-tech is vibrant with capital
and jobs. This made me wonder: why is the tech boom not boosting the overall economy?
Just so were clear, no one can deny the innovation and disruption to daily life that technology makes
possible. My argument is that it is possible to have a major impact on our daily life while
generating wealth without growing the overall economy. To understand why the tech
boom has a limited impact on economic growth, consider the following reasons. First,
unlike traditional sectors like agriculture, infrastructure and healthcare, technology is inherently
different in terms of the relationship between output and labor. In those sectors, you need
a lot of workers consistently to convert plans into product. That is not the case with tech jobs, where
one of the main appeals of technology is to use automation to do more with less
labor and fewer iterations. For example, when Facebook acquired WhatsApp for
$19 Billion, the latter employed just 55 employees. This purchase was great for
WhatsApp employees, but did not create any profit or income for anyone outside of
those 55 people. Similarly, when Yahoo bought Tumblr, about 40 employees made
millions, and about 178 employees made about $300K. There are other examples similar to
this one all over the world. As far as tech sector being a jobs engine is concerned, reputation is not the
reality. As advertised, technology creates great wealth; that wealth, however is
distributed among a small slice of society. There is a bright green line between those who make
millions and the remaining minions. Put simply, the tech sector can create wealth without creating a lot of
work. Second, 90% of startup tech ventures fail. In such instances, employees come
away with marketable skills and contacts, but the benefit to the rest of the economy
is negligible in the near term. For a business to create jobs outside of its immediate scope, the
business needs to sustain itself to profitability. Third, the tech sector is more of an urban phenomenon
compared to sectors that have historically boosted the U.S. economy. This is significant since technology
and resultant automation are at least partly responsible for the decline of
manufacturing jobs. That decline in manufacturing affected the whole country. Tech
jobs are mainly concentrated on the coasts, along with venture capital funders (See Figures 1 and 2 below),
tech-centric universities and a workforce with transferable skills. Urban America, therefore, had an easier
transition from a manufacturing to a service-oriented economy while the rest of the country did not. Vast
areas of the U.S. have been historically dependent on manufacturing with skills to match for ages. During
my undergraduate years in rural Missouri, driving through the midwest often made for depressing viewing.
Town after town featured abandoned homes and factories, all a symbol of what once was and will never be.
These are shards of a shattered past that would never join together again, and the jobs they once provided
have gone forever. The tech sector, with its vast footprint, has not stepped in to fill that void. To the degree
that rural America does offer job opportunities, it is from traditional sectors like healthcare and
automobiles. Smaller towns in Nebraska and Indiana, for example, are surviving due to hospitals that offer
high-paying jobs. Beyond those jobs, the next best options for locals include small, low-skill factories, the
dollar store or a Dairy Queen. Similarly, the benefits of a reviving auto industry are not confined to states
like Michigan and Ohio. Ford is building plants and creating jobs in other rural states. Alcoa is a supplier of
aluminium to auto companies, and spent $300m expanding an aluminium plant in rural Iowa. It will soon
spend $275m expanding a factory in rural Tennessee. The tech sector is different from these older sectors
when it comes to job creation. Its power is deep, but its reach very limited. The above three points
make clear: the booming tech sector creates a few vastly successful startups that
create a handful of millionaires and many more failed startups that create no
tangible economic benefit. The remaining middle-class jobs created by the tech
boom are concentrated in pockets of the country among the highly educated. All this
mitigates the economic impact. Fourth, even when tech companies venture outside of
urban coastal locations, they provide limited benefits at best to their communities.
Over-emphasizing the importance of technology in an economy drains capital away
from a diversified entrepreneurial portfolio
Kammer-Kerwick and Peterson 15 (Matthew Kammer-Kerwick, , James A. Peterson, , Want to
rebuild the economy? Stop obsessing over tech start-ups., 5/4/2015, The Washington Post,
http://www.washingtonpost.com/posteverything/wp/2015/05/04/want-to-rebuild-the-economy-stop-
obsessing-over-tech-start-ups/, DJE)
Six years after the Great Recession ended, the nations economic
recovery remains tenuous.
The hiring rate has weakened; the manufacturing sector continues its rapid decline;
and the labor force has shrunk to its lowest level since the 1970s. Nobody has felt this
sluggishness more than millennials, who are facing lower incomes and higher
unemployment than their parents did at their age. Thats a big problem: Projected to be 75
percent of the global workforce by 2025, millennials are the key to a sustainable economic recovery. But
the leaders orchestrating our economys turnaround keep overlooking them and failing to cultivate their full
economic potential. Millennials have made clear how they want to help rebuild our economy. Survey
after survey has shown that the nations youngest workers have a hungry
entrepreneurial spirit, driven by the opportunity for independence and creativity. A
recent study by Bentley University found that most young adults dream of starting
their own businesses: Millennials view career success differently than their parents do. Rather than
striving for the CEO spot, 66 percent of millennials would like to start their own business. We conducted a
study that found that, in terms of setting professional entrepreneurial goals and having formed an idea about
the type of company they want to start, millennials outpace older Americans by approximately 10
percentage points. But despite their dreams of becoming business owners, few
millennials actually do: Just 3.6 percent of households headed by young adults own
stakes in private companies, compared with 10.6 percent in 1989, according to a
recent Wall Street Journal analysis. The future of our economy depends on finding a way to
shrink that chasm between having an idea and having a business. Cultivating entrepreneurs is
great for the economy because the new firms they create are a prominent source of
job growth. Washington understands that. This summer, the Obama administration will hold the first
White House Demo Day, billed as an effort to make entrepreneurship more accessible to people from
diverse backgrounds and geographies. This broad, inclusive goal is positive. But the White House has
made it clear that its focus is actually much narrower. When it comes to celebrating entrepreneurship, our
society, led by Washington and Wall Street, has become fixated on the technology
industry, funneling money and support primarily into tech start-ups. That myopic
focus is misguided. In contrast, most aspiring entrepreneurs dream about starting
Main Street companies restaurants, barbershops, boutiques and other everyday
retail and services. The timing is perfect to capture the economic promise of millennial
entrepreneurship. The oldest members of the generation are reaching what has historically been the prime
entrepreneurial age, at a time that coincides with improving economic conditions and renewed optimism.
The climate for Main Street start-ups is looking brighter, with consumers spending more and interest rates
having remained low. Of course, the entrepreneurial process is complicated and fraught with risk: Hopeful
business owners must turn their visions into solid business plans, assess the market, determine how much
capital they need and find backers before they can even launch. After that, it gets even harder. Data from
the Bureau of Labor Statistics show that approximately half of start-up companies fail to last more than five
years. These are among the hurdles that have prevented many young people from becoming their own
bosses. For this generation already saddled with debt and struggling to get the private-sector experience
that helps one launch a business the risk can be especially intimidating. Although as a group, Main
Street companies can be less risky than technology start-ups, they are often underfunded and
poorly planned. In the absence of funding and planning, they are driven by passion,
and thats not sustainable. Thats why government and other institutions need to step up. For one,
we need to demystify the start-up process for aspiring entrepreneurs. Colleges and universities are the best
place to start encouraging Main Street entrepreneurs to plan and fund their companies in a way that reduces
risk. Babson College is an excellent example of an existing program that could be expanded, requiring
students to gain start-up experience on a small scale as part of their course work. The University of
Houston is another great example of how education can include hands-on experience along with traditional
classroom learning. The University of Texas at Austin, in addition to offering formal entrepreneurship-
related courses, offers a variety of entrepreneurship programs for students, including Texas Venture Labs,
Longhorn Startup, Longhorn Entrepreneur Agency and the Technology Entrepreneurship Society. These
types of programs should be expanded to reach young people who seek to start businesses after their formal
education is over, too. We also need to enhance connections between millennials and more experienced
entrepreneurs as partners and mentors. Mentorship programs have been promoted at New Orleans
Entrepreneur Week and South by Southwest, but we need more. These mentorships and targeted events
help increase young peoples awareness of existing financing options and start-up support programs to
launch their ideas. Too often, nascent entrepreneurs take easier but riskier routes to financing their
ideas, like credit cards and relatives. Though those options are more expedient for the passion-driven
entrepreneur, other funding routes, like SBA loans and bank loans, require the business-planning process
that reduces the financial risk and stress that can cripple a start-up. Great business ideas shouldnt stall
simply because they dont yet have the acumen to engage angel investors or venture capitalist partners.
New programs and opportunities for entrepreneurs shouldnt just benefit aspiring business owners in their
20s and 30s. Generation X and baby boomers also have substantial interest in entrepreneurship and can
benefit from more experience. When members of different generations work together whether in a
mentorship or as business partners synergies can develop between their unique strengths and
perspectives: Millennials are more confident about setting goals, more optimistic about future economic
conditions and are driven by a desire to make a difference in society. In contrast, Generation X and baby
boomers are marginally more likely to value persistence in recovering from setbacks and focus on the
concrete benefits of employment: job security, reliable health insurance and retirement savings. If we
continue to undervalue the potential of young entrepreneurship, the consequences
will trickle throughout our economy. Inaction promises a less robust and less diversified
economic recovery, and one in which fewer Americans pursue their entrepreneurial dreams. Such inaction
is akin to inadequate planning for retirement. At this point in our tenuous recovery, now is
exactly the best time to invest in a diversified and inclusive portfolio of
entrepreneurs.
The benefit of technological growth is sidelined by a deficit in US Stem education

Engler 12 (John Engler, journalist for US News, STEM Education Is the Key to the U.S.'s Economic
Future, 6/15/2012, U.S. News and World Report,
http://www.usnews.com/opinion/articles/2012/06/15/stem-education-is-the-key-to-the-uss-economic-future,
DJE)
A close look at American unemployment statistics reveals a contradiction: Even with unemployment at
historically high levels, large numbers of jobs are going unfilled. Many of these jobs have
one thing in commonthe need for an educational background in science,
technology, engineering, and mathematics. Increasingly, one of our richest sources of
employment and economic growth will be jobs that require skills in these areas,
collectively known as STEM. The question is: Will we be able to educate enough young Americans
to fill them? Yes, the unemployment numbers have been full of bad news for the past few years. But there
has been good news too. While the overall unemployment rate has slowly come down to May's still-high
8.2 percent, for those in STEM occupations the story is very different. According to a recently released
study from Change the Equation, an organization that supports STEM education, there are 3.6 unemployed
workers for every job in the United States. That compares with only one unemployed STEM worker for
two unfilled STEM jobs throughout the country. Many jobs are going unfilled simply for lack of people
with the right skill sets. Even with more than 13 million Americans unemployed, the manufacturing
sector cannot find people with the skills to take nearly 600,000 unfilled jobs, according to a
study last fall by the Manufacturing Institute and Deloitte. The hardest jobs to fill were skilled positions,
including well-compensated blue collar jobs like machinists, operators, and technicians, as well as
engineering technologists and sciences. As Raytheon Chairman and CEO William Swanson said at a
Massachusetts' STEM Summit last fall, "Too many students and adults are training for jobs in which labor
surpluses exist and demand is low, while high-demand jobs, particularly those in STEM fields, go unfilled."
STEM-related skills are not just a source of jobs, they are a source of jobs that pay
very well. A report last October from the Georgetown University Center on Education and the Workforce
found that 65 percent of those with Bachelors' degrees in STEM fields earn more than Master's degrees in
non-STEM occupations. In fact, 47 percent of Bachelor's degrees in STEM occupations earn more than
PhDs in non-STEM occupations. But despite the lucrative potential, many young people are
reluctant to enter into fields that require a background in science, technology,
engineering, or mathematics. In a recent study by the Lemselson-MIT Invention Index, which
gauges innovation aptitude among young adults, 60 percent of young adults (ages 16 to 25) named at least
one factor that prevented them from pursuing further education or work in the STEM fields. Thirty-four
percent said they don't know much about the fields, a third said they were too
challenging, and 28 percent said they were not well-prepared at school to seek
further education in these areas. This is a problemfor young people and for our country. We
need STEM-related talent to compete globally, and we will need even more in the
future. It is not a matter of choice: For the United States to remain the global
innovation leader, we must make the most of all of the potential STEM talent this
country has to offer. Government can play a critical part. President Barack Obama's goal of 100,000
additional science, technology, engineering, and math teachers is laudable. The president's STEM campaign
leverages mostly private-sector funding. Called Educate to Innovate, it has spawned Change the Equation,
whose study was cited above. A nongovernmental organization, Change the Equation was set up by more
than 100 CEOs, with the cooperation of state governments and educational organizations and foundations
to align corporate efforts in STEM education.
Indian Tech Tradeoff DA
UQ
Rapid growth suggests India as a potential future technology leader
Fannin 15 (Rebecca Fannin, 5-27-2015, Forbes Contributer "China Still Reigns But India Identified As A Next
Tech Leader In Meeker's New Internet Report," Forbes,
http://www.forbes.com/sites/rebeccafannin/2015/05/27/china-still-reigns-but-india-identified-as-a-next-tech-
leader-in-meekers-new-internet-report/2/)
While China clearly emerges again as a tech innovator leader in Mary Meekers
annual Internet Trends report, its India that is the surprise factor. India is about
to reach that tipping point of mass adoption of the Internet, the report concludes.
With 232 million Internet users currently, India has become the worlds third
largest market and the top growth country, adding 63 million users in 2014. China still
takes the trophy as the worlds largest Internet market (followed by the U.S.), with such leaders as Tencent,
Alibaba and JD.com . But growth is slowing: China saw a 7% increase in Internet users
compared with a 33% uptake for India. That same trend line is seen in smartphone
subscriptions. China has the world lead with 513 million smartphone subscribers,
up 21% in 2014. Third-ranked smart phone market India has 140 million
subscribers and a growth rate of 55%. Unlike in China, where local brands such as Tencent,
Alibaba and Baidu tower, multinational brands including Facebook and LinkedIn rank India as their
second-largest globally. As pointed in my book Startup Asia, American brands have struggled to
make inroads in China but have become well adopted in the Indian market. They
should see more gains too as Indias tech ecosystem catches up with China. In
another leading indicator identified in the report, Indias way ahead on Internet
traffic driven by mobile, with 65% of Internet traffic on mobile devices. That
compares with 22% in the U.S. and 30% in China. Moreover, mobile as a
percentage of a total e-commerce ranks up there too in India, at 41%, leaping past
other mobile-saturated countries such as China at 33%. Likewise, Indian Internet
leaders are more mobilized than their U.S. or China counterparts. Indian e-commerce
brands Snapdeal and Flipkart get about 70% of their revenues from mobile, surpassing Alibaba at 51%,
JD.com at 42% and eBay at 33%. Mobile wallets are rising along with e-commerce adoption in India. One
startup riding this wave is Paytm with 80 million wallet users, up 17 times year over year. Overall, the
report makes the case that Chinas tech brands are making great strides forward, evolving into much more
than their original business. For instance, search leader Baidu is now into on-demand services such as food
delivery. Major players in certain sectors like taxi-hailing apps are consolidating for extra market impact.
The report additionally notes that Chinas e-commerce leader Taobao outranks its U.S. peer eBay in gross
merchandise volume while group-buying site Meituan surpasses GroupOn in gross billings. Special
attention is focused on Chinas smartphone leader Xiaomi, which saw a 61% increase in shipments for
2014. Xiaomi also was singled out for evolving from smartphone to an ecosystem of remote-controlled
devices for the home including set-top boxes, light bulbs and fitness devices. Everywhere you these days in
knowledgeable tech circle, experts are talking about Xiaomi such was the case at the recent HYSTA
China conference in the Valley. Meekers report makes the further point of how China
social commerce is rising. It underscores the importance of content plus community
plus commerce, and points to Mogujie and Melishuo as examples. This social commerce
movement relates to the theme of a new book by John Sculley, Moonshot!, which notes the effects of
technology on marketing led by a power shift to big data, cloud computing and
mobile communications. Brand success today depends more and more on customer
opinions and favorable pricing shared online rather than company messages. Its all
about the customer being in control.
Indias Information Technology Sector key to its transition from a rural to a

knowledge based economy
FICCI 14 (FICCI, 3-12-14, National organization tht aggregates multiple chambers of commerce, Sector
Profile, Information Technology (It), FICCI,
http://www.ficci.com/sector/21/Project_docs/FICCI_website_content_-IT.pdf)
Information technology (IT) industry in India has played a key role in putting India
on the global map. IT industry in India has been one of the most significant growth
contributors for the Indian economy. The industry has played a significant role in
transforming Indias image from a slow moving bureaucratic economy to a land of
innovative entrepreneurs and a global player in providing world class technology solutions and
business services. The industry has helped India transform from a rural and agriculture-
based economy to a knowledge based economy. Information Technology has made
possible information access at gigabit speeds. It has made tremendous impact on the
lives of millions of people who are poor, marginalized and living in rural and far
flung topographies. Internet has made revolutionary changes with possibilities of e-
government measures like e-health, e-education, e-agriculture, etc. Today, whether its
filing Income Tax returns or applying for passports online or railway e-ticketing, it just need few clicks of
the mouse. Indias IT potential is on a steady march towards global competitiveness,
improving defense capabilities and meeting up energy and environmental challenges amongst others.
The Indian IT industry is a vital aspect of Indias rapid economic development

After the economic reforms of 1991-92, liberalization of external trade, elimination of duties on imports of
information technology products, relaxation of controls on both inward and outward investments and
foreign exchange and the fiscal measures taken by the Government of India and the individual State
Governments specifically for IT and ITES have been major contributory factors for the
sector to flourish in India and for the country to be able to acquire a dominant
position in offshore services in the world. The major fiscal incentives provided by the
Government of India have been for the Export Oriented Units (EOU), Software Technology Parks (STP),
and Special Economic Zones (SEZ). Challenges Cyber security and quality management are few key areas
of concern in todays information age. To overcome such concerns in todays global IT scenario, an
increasing number of ITBPO companies in India have gradually started to emphasize on
quality to adopt global standards such as ISO 9001 (for Quality Management) and ISO 27000
(for Information Security). Today, centers based in India account for the largest number
of quality certifications achieved by any single country. India aims to transform
India into a truly developed and empowered society by 2020. However, to achieve
this growth, the sector has to continue to re-invent itself and strive for that extra
mile, through new business models, global delivery, partnerships and
transformation. A collaborative effort from all stakeholders will be needed to ensure
future growth of Indias IT-ITeS sector. We will need to rise up to the new challenges and put
in dedicated efforts toward providing more and more of end-to-end solutions to the clients to keep the
momentum going. India is now one of the biggest IT capitals in the modern world and
has presence of all the major players in the world IT sector. HCL, Wipro, Infosys and
TCS are few of the household names of IT companies in India. Future prospects Globalization has had a
profound impact in shaping the Indian Information Technology industry. Over the years, verticals like
manufacturing, telecom, insurance, banking, finance and lately the retail, have been the growth drivers for
this sector. But it is very fast getting clear that the future growth of IT and IT enabled services will be
fuelled by the verticals of climate change, mobile applications, healthcare, energy efficiency and
sustainable energy. The near future of Indian IT industry sees a significant rise in share
of technology spend as more and more service providers both Indian and global
target new segments and provide low cost, flexible solutions to customers. By 2015, IT sector is
expected to generate revenues of USD 130 billion (NASSCOM) which will create a
transformational impact on the overall economy. IT spending is expected to significantly
increase in verticals like automotive and healthcare while the government, with its focus on e-governance,
will continue to be a major spender.
The technology sector is integral to every major global industry

Economywatch 10 (Economywatch, 6-29-2010, "IT Industry, Information Technology Industry," EconomyWatch,
http://www.economywatch.com/business-and-economy/information-technology-industry.html)
Information technology, and the hardware and software associated with the IT
industry, are an integral part of nearly every major global industry. . The
information technology (IT) industry has become of the most robust industries in
the world. IT, more than any other industry or economic facet, has an increased
productivity, particularly in the developed world, and therefore is a key driver of
global economic growth. Economies of scale and insatiable demand from both consumers and enterprises
characterize this rapidly growing sector. The Information Technology Association of America (ITAA) explains
'information technology' as encompassing all possible aspects of information systems based on computers . Both
software development and the hardware involved in the IT industry include
everything from computer systems, to the design, implementation, study and
development of IT and management systems. Owing to its easy accessibility and the wide range
of IT products available, the demand for IT services has increased substantially over the years . The IT sector
has emerged as a major global source of both growth and employment. Features of the
IT Industry at a Glance Economies of scale for the information technology industry are
high. The marginal cost of each unit of additional software or hardware is insignificant compared to the value
addition that results from it. Unlike other common industries, the IT industry is knowledge-based.
Efficient utilization of skilled labor forces in the IT sector can help an economy
achieve a rapid pace of economic growth. The IT industry helps many other
sectors in the growth process of the economy including the services and
manufacturing sectors. The role of the IT Industry The IT industry can serve as a medium of e-governance,
as it assures easy accessibility to information. The use of information technology in the service sector improves
operational efficiency and adds to transparency. It also serves as a medium of skill formation. MAJOR STEPS
TAKEN FOR PROMTION OF IT INDUSTRY Domain of the IT Industry A wide variety of services come under the
domain of the information technology industry. Some of these services are as follows: Systems architecture
Database design and development Networking Application development Testing Documentation Maintenance and
hosting Operational support Security services
Indian tech sector high now, consistency vital in ensuring Indian economic stability
Dubev & Garg 14 (Mohit Dubev & Aarti Garg, March 2014, Director, CRC, IFTM University,
Moradabad, Assistant Professor, SBM, IFTM University, Moradabad, Contribution of Information Technology
and growth in the Indian economy, Voice of Research Vol 2, Issue 4, ISSN 2277-7733,
http://www.voiceofresearch.org/doc/Mar-2014/Mar-2014_15.pdf)
Information technology is an important emerging sector of the Indian economy. The

Government of India has identified IT industry as one of the major industries in
India and it plays an important role in achieving the policy objectives like economic
development. The IT industry has mellowed over the years andhas emerged to be a
chief contributor to the globaleconomic growth. The IT sector, constitutedby the software and
services, Information Technology Enabled Services (ITES) and the hardware segments, hasbeen on a gradual
growth trajectory with a steady rise in revenues as witnessed in the past few years.The
size of this sector
has increased at a rate of 35% per year during the last 10 years. The share of
information technology industry is 7 percent of gross domestic product (GDP) in
Indian economy according to NASSCOM (www.imdr.edu; www.nasscom.org.). The prime aim of this
paper is to analyze the growth and performance of information technology industry in India. This paper
examines the question: How information technology contributes to Indias economic development in a holistic
and broader wayTodays escalating, competitive and demanding environments have forced companies to be
more efficient, operate learner and continuously create new procedures to keep ahead of competitors - adding
final consumer value to a product or service in the form of lower prices, quality and better service has become
an essential requirement in the global marketplace. Corporations are trying to adapt with increasing
competitors innovations to find global opportunities and resources, focusing on core competencies and
mutually constructive relationships, and finally, outsourcing those activities which can be performed more
quickly and at lower costs by subcontractors. In a globally integrated economy, outsourcing is leading to
overall benefits for the source economies, providing weighty monetary and employment benefits.
India has
become a target destination for multinationals to back end their IT operations in
India owing to its strong value proposition. The possibilities for broad-based IT-led
economic growth in India, includes increasing value-added, using better telecom
links to capture more benefits domestically through offshore development for
developed country firms, greater spillovers to the local economy, broadening the IT
industry with production of telecom access devices, improving the functioning of
the economy through a more extensive and denser communications network, and improving governance.
Information technology essentially refers to the digital processing, storage and communication of information
of all kinds. Therefore, IT can potentially be used in every sector of the economy.The
true impact of IT on growth and productivity continues to be a matter of debate, in the India, which have been
the leader and adopter of IT. IT has contributed significantly to total factor productivity growth (TFPG), of
course, higher TFPG implies higher overall growth, ceteris paribus. However, there is no doubt that the IT
sector has been a vibrant one in many developed countries, and
India has stood out as a developing
country where IT, in the semblance of software exports, has grown dramatically,
despite the countrys relatively low level of income and development. An example of ITs
broader impact comes from the case of so-called IT-enabled services, a broad category covering many different
kinds of data processing and voice interactions that use some IT infrastructure as inputs, but do not necessarily
involve the production of IT outputs. This paper consider directly by examining the performance of Indias IT
sector, explore the trends of contribution of IT industry in the total GDP, analyze the revenue trends of IT
industry in the total revenue, the growth pattern of the software industry and software exports, the rapid
emergence of IT-enabled services and the role of the domestic market and to divulge the employment level of
IT industry of India.
The Indian technology sector is the largest employment generator in the country,
spawns multiple businesses, and is considered a key driver of the Indian economy
The Indian IT industry has grown almost tenfold in previous decade . Domestic software
has grown at 46 per cent while software exports have grown at 62 per cent over the last 5 years. Information
Technology enabled services (ITes) with elements like call centres, back office processing, contents development
and medical transcription are key to rapid growth. The sector has an employment potential of 2 million by
2010. All this shows the significant contribution of software industry to Indian economy in terms of GDP and as
an employment provider. Indias concentration in software has been driven by two sorts of wage advantages
that have reinforced each other as such the lower wages for Indian software developers relative to that of their
US and European counterparts make Indian software cheaper in global markets, and while the higher wages
earned by software professionals in India relative to that in other industrial sectors has ensured a steady
stream of supply of software professionals. Indias over aching INFORMATION TECHNOLOGY AND
GROWTH OF INDIAN ECONOMY Voice of Research Vol. 2, Issue 4, March 2014 ISSN 2277-7733 50 |
Voice of Research, Vol. 2 Issue 4, March 2014, ISSN No. 2277-7733 objective remains vitally one of accelerating
economic growth and reducing widespread poverty. To effectively reduce poverty, the pattern of economic
growth would need to be broad-based so as to bring about social development and improvements in the welfare
of Indian peoples. To this end, priority should be bestowed to investing in physical as well as human capital,
especially with respect to access to education, health and nutrition. It is also important to promote private-
sector led growth and international trade. Furthermore, efforts would be needed to attend to cross-cutting
issues such as environmental management. In a nutshell, Indias quest for sustainable
development should be based on the pursuit of the intertwined goals of
accelerating the pace of economic growth, while also spreading the benefits widely among the
population so as to make significant strides in poverty reduction. The Indian Information
Technology and Information Technology Enabled Services (IT-ITES) industry has been contributing
its role in the economic development of India since post liberalization era. The IT-
ITES industry in India has today become a growth engine for the economy,
contributing substantially to increases in the GDP, urban employment and exports, to achieve the vision of a
powerful and resilient India. While the Indian economy has been impacted by the global slowdown, the IT-
ITES industry hasdisplayed resilience and tenacity in countering theunpredictable conditions and reiterating
the viabilityof Indias fundamental value proposition. The rapid growth of ITES-BPO and the IT industry as a
whole has made a deepimpact on the socioeconomic dynamics of the country, having a significantmultiplier
effect on the Indian economy. Apart from the direct impact on nationalincome, the
sector has risen to
become the biggest employment generator with thenumber of jobs added almost
doubling each year, has spawned a number ofancillary businesses such as
transportation, real estate and catering; played a keyrole in the rise in direct-tax
collection and has contributed to a rising class of youngconsumers with high
disposable incomes. The pace growth of this industry isconsidered as a growth
driver for the economy. India has become as IT Super Power. The performance of IT industry can
berevealed with the evidence of its contribution to the GDP (Gross Domestic Product)
of the country, provision of employmentopportunities all over the country, IT
services and software exports and revenue to the country. This paper examines how does the
ITindustry is playing its predominant role in Indian economy with its various trends in the contribution to the
GDP of India , ITexports, IT revenue trends and employment opportunities.
The Indian technology industry creates millions of employment oppurtunities and

improves productivity for all sectors of its economy
Dubev & Garg 14 (Mohit Dubev & Aarti Garg, March 2014, Director, CRC, IFTM University, Moradabad, Assistant Professor, SBM,
IFTM University, Moradabad, Contribution of Information Technology and growth in the Indian economy, Voice of Research Vol 2, Issue 4,
ISSN 2277-7733, http://www.voiceofresearch.org/doc/Mar-2014/Mar-2014_15.pdf)
Growth and Performance of Information Technology Industry in India: The

contribution of Indias
IT industry to economic progress has been quite significant. The rapidly expanding socio
economic infrastructure has proved to be of great use in supporting the growth of Indian information
technology industry.Information Technology (IT), a knowledge-based industry, has
the tremendous
potential of becoming an engine of accelerated economic growth, productivity
improvement for all sectors of the economy and means of efficient governance. It
enhances access to information, protects consumers, provides access to
government services, makes skill formation and training more effective, improves
delivery health services, and promotes transparency. It provides tremendous
employment potential and linkages between government and the people both at the rural and urban level.
Investment in knowledge based industries will determine the level of the countrys dominant position in the
world economy in the next two decades. The
information technology industry has emerged
as one of the fastest growing industries in India. As a proportion of Gross Domestic
Product, the information technology industry revenue has grown from 1.2 percent in
1998 to an estimated 5.8 percent in 2009. Indias domestic market is estimated to grow
by 20 percent growth in 2008-09. Hardware segment is estimated to grow by 17 percent to be Rs.541
billion, information technology services segment is estimated to grow by 20 percent to be Rs.380 billion.
Whereas software products and BPO segment is estimated to grow by 15 percent to be Rs.103.3 billion.
Export growth is expected at 16-17 percent in 2008-09. Industry
will continue to net hire and
focus on value creation, provide direct employment to 2.23 million and indirect
job creation estimated to eight million employees. Indian information technology sector is
developing as the biggest source of revenue and employment generator. The growth of information technology
industry will also develop the other industries of the economy. This industry has a number of customers in
India, as well as also in abroad. The growth and prosperity of Indias IT industry depends on some crucial
factors
The technology industry is key in the development of the Indian economy

Dubev & Garg 14 (Mohit Dubev & Aarti Garg, March 2014, Director, CRC, IFTM University, Moradabad, Assistant Professor, SBM,
IFTM University, Moradabad, Contribution of Information Technology and growth in the Indian economy, Voice of Research Vol 2, Issue 4,
ISSN 2277-7733, http://www.voiceofresearch.org/doc/Mar-2014/Mar-2014_15.pdf)
India is home to a large number of IT professionals, who have the necessary skill
and expertise to meet the demands and expectations of the global IT industry. The
cost of skilled Indian workforce is reasonably low compared to the developed
nations. This makes the Indian IT services highly cost efficient and this is also the reason as
to why the IT enabled services like business process outsourcing and knowledge process outsourcing have
expanded significantly in the Indian job market. India has a huge pool of English-speaking IT professionals.
This is why the English-speaking countries like the US and the UK depend on the Indian IT industry for
outsourcing their business processes. Indias GDP and Information Technology Industry Growth: Indian
information technology industry has grown manifold during the period 1997-98 to 2007-08 as shown in table 1.
The size of Indian information technology industry has increased from USD 5.0 billion in 1997-98 to USD 64.0
billion in 2007-08. The share of information technology industry in Gross Domestic Product has increased from
INFORMATION TECHNOLOGY AND GROWTH OF INDIAN ECONOMY Voice of Research, Vol. 2 Issue 4,
March 2014, ISSN No. 2277-7733 | 51 1.2 percent in 1997-98 to 5.2 percent in 2007-08. This sector is expected to
reach USD 73.1 billion in FY2010, an aggregate growth of 5.4%. Thus, information
technology industry
is considered as a key industry for the development of Indian economy The global
recession has significantly impacted technology spending levels across the world, raising several demand side
challenges for the Indian IT-BPO sector.However , the industry has displayed resilience, enhanced efficiencies,
invested in future growth plans along disruptive technologies and changed existing business model.
The Indian IT industry offers employment opportunities, improves average

purchasing power, increases consumption spending, and improves gross good
production
The IT sector has brought about revolution in India particularly since 1990s. This is because it
has
reduced intermediation in business and society, provided solutions across sectors
(be it agriculture sector or manufacturing sector), re-organized firm level
behaviour, empowering individuals by providing them with more information and
is increasingly becoming an important tool for national and rural development
through E- governance, E-Banking and ECommerce programmes. The export performance of Indias
software and service sector during the last decade has been unprecedented. As a result, the software and service
sector accounts for over 20% of Indias total exports and 2.6% of GDP. In addition, there has been a marked
decline in the share of onsite services and today almost 60% of Indias software and services export takes the
form of off shore services. The undifferentiated and service nature of Indian software firms has meant that
human capital has acquired an importance that was hitherto reserved for financial and physical capital in
Indian industry. In
an extremely competitive international market for software
services, Indian firms have tried to emphasize the quality of procedures and
human resource used by them to gain competitive advantage. Information
technology is rapidly changing economic and social activities. It provides
opportunities and challenges for making progress with accelerated growth and
poverty reduction in India.Indian IT industry is one of the key industries tocontribute its
significance in the growth variables ofGDP of India, exports, revenue and employment. The emergence of
Indian information technology sector has brought about sea changes in the Indian job market. The IT
sector of India offers a host of opportunities of employment. With IT biggies like Infosys,
Cognizant, Wipro, Tata Consultancy Services, Accenture and several other IT firms operating in some of the
major Indian cities, there is no dearth of job opportunities for the Indian software professionals. The IT
enabled sector of India absorbs a large number of graduates from general stream in the BPO and KPO firms.
All these have solved the unemployment problem of India to a great extent. The
average purchasing power of the common people of India has improved
substantially. The consumption spending has recorded an all-time high. The
aggregate demand has increased as a result. All these have improved the gross production of
goods and services in the Indian economy. So in conclusion it can be said that the growth of
Indias IT industry has been instrumental in facilitating the economic progress of
India. To conclude, it can be said that India is now an integral partof the Global Village, thanks to the
developments witnessed in InformationTechnology.
The Indian Tech sector is dependent on a large foreign and domestic export market
Vijaysri 13 (G.V.Vijaysri, August 2013, Research Scholar, Department of Economics, Andhra University, The Role of
Information Technology in India, International monthly refereed journal of research in manegament and technology, Volume
2, ISSN- 2320-0073, http://www.abhinavjournal.com/images/Management_&_Technology/Aug13/7.pdf)
Indian Information Technology industry contributes 5.9% of the country's GDP

while providing employment to a significant number of its tertiary sector
workforce. In March 2009, annual revenues from outsourcing operations in India was
up to US$ 60 billion and this is expected to increase to US$225 billion by the year 2020.
The most prominent IT hub is IT capital Bangalore and the other emerging destinations are Chennai,
Hyderabad, Mumbai, Pune, NCR, Jaipur and Kolkata. India's growing stature in the information Technology
enabled the country to form close ties with both the United States of America and the European Union.
Domestic and Export Share According to Department of Information Technology, the Indian software
and services exports was expected to reach US$ 49.7 billion in 2009-10 as compared
to US$ 47.1 billion in 2008-09, with an increase of 5.5% in dollar terms. Further, the Indian IT
Industry's services exports is estimated to grow from US$ 25.8 billion in 2008-09 to US$ 27.3 billion in 2009-10,
with a growth of 5.8 %.In the year 2008-09, the domestic IT attained revenues worth US$ 24.3 billion as
compared to US$ 23.1 billion in FY 2007-08, with a growth of 5.4%. The tremendous demand for IT
services and goods by India Inc. has majorly strengthened with the expansion of the
domestic market as agreements worth extraordinarily to US$ 100 million. Till 2012, the
domestic sector is estimated to expand to US$ 1.7 billion against the existing US$ 1 billion. IT exports
software and services of India are to nearly 95 countries around the world.
Indias domestic IT market over the years has become one of the major driving
forces of the industry. The domestic IT infrastructure is developing in contexts of
technology and intensity of penetration. In FY 2008-09, the domestic IT sector attained revenues
worth$24.3 billion compared to $23.1 billion in FY 2007-08, registering a growth of 5.4 per cent. Moreover, the
increasing demand for IT services and goods by India Inc has strengthened the expansion of the domestic
market with agreements worth rising up extraordinarily to $100 million. By FY 2012, the domestic sector
is estimated to expand to $1.7 billion from the existing $1 billion.
The technology industry is key to all aspects of the Indian economy

Vijaysri 13 (G.V.Vijaysri, August 2013, Research Scholar, Department of Economics, Andhra University, The Role of
Information Technology in India, International monthly refereed journal of research in manegament and technology, Volume
2, ISSN- 2320-0073, http://www.abhinavjournal.com/images/Management_&_Technology/Aug13/7.pdf)
A particular industry that has been instrumental in the growth of the Indian economy is
the IT sector. The design, development, implementation or management of information systems is
referred to as information technology. It describes the production, storage, manipulation and dissemination of
information. IT industries account for 6% of the GDP of India and provide employment directly
or indirectly for over 2.3 million people. It also contributes very significantly to Indias exports: accounting for
around 18% in 2001. India produces roughly 150,000 technically and socially adept engineers every year. Most
of them migrate to developed countries and form an integral part of the workforce there, thus becoming Indias
most beloved export. In the 21st century, India has risen to the position of one of the largest
IT capitals of the world. As of 2006, technologically inclined services sector in India accounted for 40%
of the countrys GDP and 30% of export earnings. The IT industry has helped the growth of modern India in
many ways. Indian engineers and technicians are sought world over for their competency
and diligence and strong fundamentals in their field of work and study. Indias technology boom has also helped
her shed her Hollywood image of being the land of mystics, snake charmers and beggars and has put her on
the world map for being a global information hub.. Each of the above mentioned industries have grown at
massive rates, providing jobs and products to Indians. For example HCL Enterprise is electronics, computing
an IT company based in India, has become a leading provider of IT service and technological solutions
worldwide. In fact, the IT boom of the 90s and the 2000s in India was also accompanied with the growth of
BPOs in the nation. India has come under fire from certain groups of people worldwide for stealing their
jobs, but the fact stands that foreign corporations love India for its abundant availability of skilled labour that
can master foreign languages and are satisfied at comparatively low salaries. But with most recent graduates
these days being absorbed into IT companies and BPOs and then getting their ticket to America and Europe,
India is losing a large chunk of its
brains which will perhaps be detrimental to the growth
of innovative, indigenous technology and inventions in India. The IT industry in
India has seen massive change, growth and development over the years. The future
of this industry seems bright with more growth being predicted. Financial analysts
are optimistically predicting strides in software technology development in India.
Additionally, the growth of the IT sector is expected to bring about a corresponding
growth in other sectors like employment, exports and Foreign Direct Investments.
IT sector is also intimately linked to other relevant sectors like biomedical
technology, defense and infrastructure. Thus the future of the IT sector will
directly impact the growth of the nation. Growth of India's IT Industry India's IT
industry has recorded phenomenal growth over the last decade. During the period
from 1992-2001, the compounded annual growth rate of the Indian IT services
industry has been over 50%. The software sector in India has grown at almost
double the rate of the US software Sector. The statistics of the India's IT industry substantiates
the huge momentum acquired by the IT sector in the recent past. During the financial year 2000-2001, the
software industry in India accounted for $8.26 billion. The corresponding figure was $100 million 10 years back.
As per the report of a study undertaken by NASSCOM-McKinsey, the software export from Indian IT industry
is likely to reach 50 billion US dollars in the year 2008. This growth rate of the software sector for the year 2008
has been projected on the basis of the 35% per year growth rate achieved in the last couple of years. Export of
software and services from India is expected to add almost 41 billion US dollars to the annual revenue of the
Indian government in the current year. The share of technology industry in India's GDP is expected to reach
5.5% in 2008; while the corresponding figure in 1998 was as small as 1.2%.The study of NASSCOM has
revealed that the growth of India's IT industry has prompted the growth of Indian exports by almost 36%.
Another favourable effect of India's IT boom is the expansion of opportunities of employment. By the end of
fiscal year 2008, the IT sector of India is expected to employ around 2 million skilled Indian youths. The growth
of India's IT sector has brought about many other positive changes in the Indian economy.
The purchasing
power of a large section of Indian population has increased dramatically. This has
resulted in an increase in the average standard of living of the majority of
population of the country. The increase in purchasing power of the common people
has propelled the growth rate of the other sectors of the economy as well. There has
been considerable increase in the amount of fund available for venture capitalism and equity financing. Indias
IT industry is growing steadily.
Indian IT companies have reached the global stage and are
undertaking interesting IT projects. The IT sector has created jobs for 2.8 million IT professionals
and has indirectly employed an additional 8.9 million. The rapid growth or engineering education, with more
than 500,000 ungraduate IT engineers graduating per year, feeds into this steadily growing IT industry.
Link Arguments & Zero Sum
If the US loses its tech dominance, Chinese and Indian innovation will quickly
replace it
Fannin 13 (Rebecca Fannin, 7-12-2013, forbes magazine contributor "China Still Likely To Take Over Tech
Leadership If And When Silicon Valley Slips," Forbes,
http://www.forbes.com/sites/rebeccafannin/2013/07/12/china-still-likely-to-take-over-tech-leadership-if-and-
when-silicon-valley-slips)
Will Silicon Valley continue to maintain its market-leading position for technology innovation? Its a
question thats often pondered and debated, especially in the Valley, which has the most to lose if the
emerging markets of China or India take over leadership. KPMG took a look at this question and other
trends in its annual Technology Innovation Survey, and found that the center of gravity may not be shifting
quite so fast to the East as once predicted. The KPMG survey of 811 technology executives globally found
that one-third believe the Valley will likely lose its tech trophy to an overseas market within just four
years. That percentage might seem high, but it compares with nearly half (44 percent) in last years survey.
Its a notable improvement for the Valley, as the U.S. economy and tech sector pick up. Which country will
lead in disruptive breakthroughs? Here, the U.S. again solidifies its long-standing reputation as the worlds
tech giant while China has slipped in stature from a year ago, according to the survey. In last years poll,
the U.S. and China were tied for the top spot. But today, some 37 percent predict that the U.S. shows the
most promise for tech disruptions, little surprise considering Google GOOG +2.72%s strong showing in
the survey as top company innovator in the world with its Google glass and driver-less cars. Meanwhile,
about one-quarter pick China, which is progressing from a reputation for just copying to also
innovating or micro-innovating. India, with a heritage of leadership in outsourcing, a
large talent pool of engineers, ample mentoring from networking groups such as
TiE, and a vibrant mobile communications market, ranked right behind the U.S.
and China two years in a row. Even though Chinas rank slid in this years tech
innovation survey, its Silicon Dragon tech economy is still regarded as the leading
challenger and most likely to replace the Valley, fueled by the markets huge, fast-
growing and towering brands such as Tencent, Baidu BIDU -1.13%and Alibaba, and
a growing footprint overseas. KPMG partner Egidio Zarrella notes that China is
innovating at an impressive speed, driven by domestic consumption for local
brands that are unique to the market. China will innovate for Chinas sake, he
observes, adding that with improved research and development capabilities, China
will bridge the gap in expanding globally. For another appraisal of Chinas tech innovation
prowess, see Forbes post detailing how Mary Meekers annual trends report singles out the markets merits,
including the fact that China leads the world for the most Internet and mobile communications users and
has a tech-savvy consumer class that embraces new technologies. Besides China, its India that shines in
the KPMG survey. India scores as the second-most likely country to topple the U.S. for
tech leadership. And, significantly, this emerging tiger nation ranks first on an index
that measures each countrys confidence in its own tech innovation abilities. Based
on ten factors, India rates highest on talent, mentoring, and customer adoption of
new technologies. The U.S. came in third on the confidence index, while Israels
Silicon Wadi ranked second. Israel was deemed strong in disruptive technologies, talent and
technology infrastructure. The U.S. was judged strongest in tech infrastructure, access to alliances and
partnerships, talent, and technology breakthroughs, and weakest in educational system and government
incentives. Those weaknesses for the U.S. are points that should be underscored in Americas tech clusters
and in the nations capital as future tech leadership unfolds. A second
part of the comprehensive
survey covering tech sectors pinpointed cloud computing and mobile
communications as hardly a fad but here to stay at least for the next three years as
the most disruptive technologies. Both were highlighted in the 2012 report a well. In
a change from last year, however, big data and biometrics (face, voice and hand
gestures that are digitally read) were identified as top sectors that will see big
breakthroughs. Its brave new tech world.
Indian reliance on both domestic and foreign tech sector exports are high now. The
loss of the US as an export market would collapse the tech sector, taking the rest of
the economy down with it
The IT-ITeS industry has been growing at anoutstanding pace since 2001-02. The total IT-
ITeSexports and domestic industry revenue is estimated atUS $ 10.2 billion in 2001- 02. It has reached to US
$58.7 billion in 2008-09, the CAGR of about 26.9 percent.
Export revenues of IT and BPO
services (excluding hardware exports) in FY2010 are expected to grow by 5.5% Growth
of Software and Services Industry in Indian Domestic and Foreign Market: Information technology industry
caters both the domestic as well as foreign market. But it is the software and services sector which has made
impressive growth in the foreign as well as domestic market. Table 3 conveys that the size of IT software and
services sector in domestic market in 1999 was just USD 1.7 billion, which has increased to USD 12.5 billion in
2009. The sector of software products and engineering services is dominating in its domestic revenue, but the
The
percentage share of domestic market has declined from 39.5 percent in 1999 to 21 percent in 2009.
exports of IT industry have grown year by year since 2001. The foreign market of
software and services sector has grown rapidly. The share of IT-ITeS exports to total IT-ITeS revenue of
Indian Software and Services industry have contributed from 74.5% in 2001-02 to 78.9% in 2008-09. The
decline in the share of domestic market is due to foreign markets expansion and
less absorption capacity of Indian economy for information technology services.
While India has been able to establish arena, yet India has not been able to make a dent in the software
product market. In spite of all this, Indian total information technology market has increased from USD 4.3
billion in 1999 to USD 59.5 billion in 2009, which is itself an achievement.
Indian and US tech relations are Zero Sum. A US tech industry rise would take
away over 60 percent of the Indian export market
Growth of Information Technology Software and Services Exports:

India has exported its
information technology services to more than hundred countries around the
world, but there is a heavy reliance on the USA market, which accounts for 62 percent of
the total software exports. The leading software-exporting firms include the companies like Tata Consultancy
Services, Infosys and Wipro etc. Table 5 shows that the exports of information technology
software and services have increased from USD 3.4 billion in 1999-00 to USD 5.3
billion in 2000-01. Further these exports have increased to USD 17.7 billion in 2004-05 and USD 31.4 billion
in 2006-07. The estimated exports of information technology software and services are USD 40.3 billion in
2007-08. The yearly growth rate of these exports have slightly declined during 2001-02 and 2002- 03 but from
2003-04 onwards, the
growth rate of exports of information technology software and
services have increased significantly. During 2007-08, the growth rate was 28.3 percent
US tech sector dominance trades off with Indian dominance and takes away the
largest Indian export market, which collapses the economy
Singh 6 (Sanjay Singh, May 2006, Information Technology in India, Present Status and future prospect for
ecomic development, IITK, http://www.iitk.ac.in/directions/may2006/PRINT~SANJAY.pdf)
Currently, export accounts for around 64% of the total IT sector revenue. The IT
sector export revenue touched the mark of US $ 18 billion during 2004-05, a jump of around 35% from the
previous year (Table 2 on page 8). IT services & software accounts for 68% of the total export revenue whereas
ITES-BPO contributes 28% of the same. The share of hardware in IT sector export revenue is just 4%.
India's IT services and software export went from a few million dollars in the 1980s to over US $ 12 billion in
2004-05. The financial service sector (banking, financial service, and insurance) accounts for the largest share
ofIndian software and services export at around 40% followed by the manufacturing with around 12%.
Telecom equipment (9%), healthcare (5%), retail (5%), and telecom services (4%) are emerging areas of
export. The key service lines for Indian services and software exporters continued to be custom application
development and maintenance, applications outsourcing, ITES, and R&D services. Few Indian companies have
made modest progress in segments like packaged software support and installation, product development and
design services, and embedded software solutions. In terms of software service delivery, off-shore project
revenue is increasing at a far higher rate than on-site revenues during recent years. In terms of geographies,
although, Indian
IT companies began tapping regions outside the US market, the US
remained the largest user of software solutions from India. The revenue
contribution from the US continued to increase on account of the large number of
ITES-BPO projects getting outsourced to India. Although only the top five firms (TCS,
Infosys, Wipro, Satyam, and HCL) which contributes more than one third of software CMM level 5 certificates
indicating the strength of India's software export capabilities. ITES-BPO segment of the IT industry is rapidly
emerging as an important contributor to export revenue. According to NASSCOM, the Indian ITES-BPO
segment has witnessed a significant increase over the last few years. The number of seats has increased from
140,000 in March 2003 to 210,000 in March, 2004. Players in ITES-BPO segment can broadly be categorized
into captive units (of both MNCs and Indian companies) and independent thirdparty service providers.
Currently, there are more than 400 companies operating in this segment of IT industry. Captive units continue
to dominate the ITES-BPO segment, accounting for over 65% of the value of work off-shored to the country.
In terms of export, the US continued to be the main consumer of India's ITES-BPO
services with around 66% of the market, followed by Europe particularly UK which accounted for 20%
of export revenue. The global financial services are the largest user of ITES-BPO services, followed by
telecom, healthcare, and airlines. Customer care and support services are the main revenue generating
activities within ITES-BPO export content development with revenue contribution of 15% each. Customer
analytics and customer relationship management (CRM), legal transcription support, knowledge process
outsourcing, and financial process outsourcing are emerging as new highpotential service lines for ITES-BPO
companies. In comparison to competing countries such as Ireland, Philippines, and China, India is able to
attract the bulk of the global ITES-BPO business due to its verticals like BFSI, manufacturing
and engineering firms, automobile and retail sector, and greater focus on maintenance and security
infrastructure by vendor firms. Hardware is the only segment of IT sector in India in which the size of the
domestic market exceeds that of export. MNCs dominate the hardware segment occupying the top positions in
key categories such as desktop PCs and notebooks, servers, and peripherals. The BFSI, government, and
telecom service providers continued to be the key contributors. BFSI alone accounts for one fourth of the total
hardware spending in the domestic market. Although the size of the hardware domestic market still remains
small, there is a huge potential for its growth. Currently, India is one of the fastest growing hardware
comparative advantage in terms of price, performance, and quality. Despite higher growth of export, the
domestic market still represents around 36% of industry receipts. The
domestic IT market touched
the revenue of US $ 10.2 billion during 2004-05, of which hardware contributed US $ 5.3
billion whereas services and software accounted for US $ 4.3 billion. The domestic market size of ITES-BPO
segment is negligible in comparison to the export. Nevertheless, domestic sector of ITES-BPO segment
recorded a healthy growth with revenue increasing from US $ 300 million in 2003-04 to US $ 600 million in
2004-05 mainly due to demand from banking, financial services and insurance (BFSI) sector and telecom
companies. With competition increasing in BFSI and telecom sector, companies are emphasizing more on
customer fulfillment and CRM activities. Presently, all the major telecom service providers offer 24 hour
customer selfsupport and also involve in a high degree of telemarketing. The scenario in BFSI sector is similar
to that of telecom. The domestic IT services and software segment continued to lag behind the export segment
on account of issues such as higher piracy levels, pressure on software prices, and lower level of IT spending by
domestic companies. However, it experienced around 20% growth rate during the last year mainly due to
demand from verticals such as banking, telecom, and BPO vendors. DomesticIT spending is
expected to increase further in coming years due to increase in telecom and internet penetration,
higher IT budget allocations by the governments, IT spending byverticals like BFSI, manufacturing and
engineering firms, automobile and retail sector, and greater focus on maintenance and security infrastructure
by vendor firms. Hardware
is the only segment of IT sector in India in which the size
of the domestic market exceeds that of export. MNCs dominate the hardware segment
occupying the top positions in key categories such as desktop PCs and notebooks, servers, and peripherals. The
BFSI, government, and telecom service providers continued to be the key contributors. BFSI alone accounts
for one fourth of the total hardware spending in the domestic market. Although the size of the hardware
domestic market still remains small, there is a huge potential for its growth. Currently, India is one of the
fastest growing hardware companies in the world
Impact
If India loses its tech sector dominance to the US, over 10 million employment
oppurtunities will be lost and economic decline is guaranteed
Apart from wealth creation and large export earnings, Indian information technology industry has also Years
Wealth Creation by IT Industry Percentage Growth provided large scale employment to
educated and skilled work-force. This is the fastest growing sector which is
providing large employment opportunities. The very success of information
technology industry in India is infact due to the availability of highly skilled work-
force. To ensure availability of trained manpower, spread of IT education has been given the necessary
impetus both at the government and private level. Significant is the opening of Indian Institutes of Information
Technology (IIITs) on the lines of Indian Institutes of Technology (IITs). Besides these, various certification
courses like the highly popular DOEACC courses have been started. The National Association of Software and
Service Companies (NASSCOM) have played a key role in the universalization of IT in India. Indian
education system gives more emphasis on mathematical skills and proficiency in
English language and this has created skilled work-force preferably suited to the
information technology industry. Indian universities are pumping out 1, 20,000 engineering
graduates in a year. The total IT Software and Services employment was estimated as 2.20 million in the year
2008-09 and it was only 0.52 million in the year 2001-02. The direct employment contribution in the estimated
employment is about to 8.0 million in 2008-09. This
translates to the creation of about 10.20
million job opportunities attributed to the growth of the sector. Direct employment
within the IT-BPO sector is expected to grow by 4% reaching almost 2.3 million,
with over 90,000 jobs being added in FY2010.
Economic decline causes war, multiple warrants and studies
Royal 10 (Jedediah, Director of Cooperative Threat Reduction at the U.S. Department of Defense,
2010, Economic Integration, Economic Signaling and the Problem of Economic Crises, in Economics of War
and Peace: Economic, Legal and Political Perspectives, ed. Goldsmith and Brauer, p. 213-215)
periods of economic decline may increase the

Less intuitive is how
likelihood of external conflict. Political science literature has contributed a moderate
degree of attention to the impact of economic decline and the security and defence behaviour of
interdependent stales. Research in this vein has been considered at systemic, dyadic and national levels.
Several notable contributions follow. First, on the systemic level. Pollins (20081 advances Modclski and
the global
Thompson's (1996) work on leadership cycle theory, finding that rhythms in
economy are associated with the rise and fall of a pre-eminent
power and the often bloody transition from one pre-eminent leader
to the next. As such, exogenous shocks such as economic crises could usher in a
redistribution of relative power (see also Gilpin. 19SJ) that leads to uncertainty about power
even a
balances, increasing the risk of miscalculation (Fcaron. 1995). Alternatively,
relatively certain redistribution of power could lead to a
permissive environment for conflict as a rising power may seek
to challenge a declining power (Werner. 1999). Separately. Pollins (1996) also
shows that global economic cycles combined with parallel leadership
cycles impact the likelihood of conflict among major, medium and
small powers, although he suggests that the causes and connections between global economic
conditions and security conditions remain unknown. Second, on a dyadic level. Copeland's (1996. 2000)
trade expectations suggests that 'future expectation of
theory of
trade' is a significant variable in understanding economic
conditions and security behaviour of states. He argues that
interdependent states are likely to gain pacific benefits from
trade so long as they have an optimistic view of future trade
relations. However, if the expectations of future trade decline,
particularly for difficult to replace items such as energy resources, the
likelihood for conflict increases, as states will be inclined to use
force to gain access to those resources. Crises could potentially be the
trigger for decreased trade expectations either on its own or because it triggers protectionist moves
by interdependent states.4 Third, others have considered the link between economic decline and external
armed conflict at a national level. Mom berg and Hess (2002) find a strong correlation between
internal conflict and external conflict, particularly during periods of economic downturn. They
write. The linkage, between internal and external conflict and prosperity
are strong and mutually reinforcing. Economic conflict lends to
spawn internal conflict, which in turn returns the favour.
Moreover, the presence of a recession tends to amplify the extent
to which international and external conflicts self-reinforce each other
(Hlomhen? & Hess. 2(102. p. X9> Economic decline has also been linked
with an increase in the likelihood of terrorism (Blombcrg. Hess. & Wee ra
pan a, 2004). which has the capacity to spill across borders and lead to
external tensions. Furthermore, crises generally reduce the
popularity of a sitting government. "Diversionary theory" suggests
that, when facing unpopularity arising from economic decline,
sitting governments have increased incentives to fabricate
external military conflicts to create a 'rally around the flag'
effect. Wang (1996), DcRoucn (1995), and Blombcrg. Hess, and Thacker (2006) find supporting
evidence showing that economic decline and use of force are at least indirecti) correlated. Gelpi
(1997). Miller (1999). and Kisangani and Pickering (2009) suggest that Ihe tendency towards
diversionary tactics arc greater for democratic states than autocratic states, due to the fact that
democratic leaders are generally more susceptible to being removed from office due to lack of
domestic support. DeRouen (2000) has provided evidence showing that periods of weak
economic performance in the United States, and thus weak
Presidential popularity, are statistically linked to an increase in the
use of force. In summary, recent economic scholarship positively
correlates economic integration with an increase in the frequency of
economic crises, whereas political science scholarship links
economic decline with external conflict al systemic, dyadic and
national levels.' This implied connection between integration, crises and armed conflict has not
featured prominently in the economic-security debate and deserves more attention.
Collapse leads to resource wars and terrorism, escalates to nuclear war
Harris and Burrows 9 (Mathew, PhD European History @ Cambridge, counselor in the National
Intelligence Council (NIC) and Jennifer is a member of the NICs Long Range Analysis Unit Revisiting
the Future: Geopolitical Effects of the Financial Crisis
http://www.ciaonet.org/journals/twq/v32i2/f_0016178_13952.pdf)
Increased Potential for Global Conflict Of course, the report encompasses more than economics and indeed believes the future is
likely to be the result of a number of intersecting and interlocking forces. With so many possible permutations of outcomes, each
with ample Revisiting the Future opportunity for unintended consequences, there is a growing sense of insecurity. Even so,
history may be more instructive than ever. While we continue to believe that the Great Depression is not likely to be repeated, the
lessons to be drawn from that period include the harmful effects on fledgling democracies and multiethnic societies (think Central
Europe in 1920s and 1930s) and on the sustainability of multilateral institutions (think League of Nations in the same period).
There is no reason to think that this would not be true in the twenty-first as much as in the twentieth century. For that reason, the
ways in which the potential for greater conflict could grow would seem to be even more apt in a constantly
volatile economic environment as they would be if change would be steadier. In surveying those risks, the report stressed
the likelihood that terrorism and nonproliferation will remain priorities even as resource issues move up on the international
agenda. Terrorisms appeal will decline if economic growth continues in the Middle East and youth unemployment is
reduced. For those terrorist groups that remain active in 2025, however, the diffusion of technologies and scientific knowledge
will place some of the worlds most dangerous capabilities within their reach. Terrorist groups in 2025 will likely be a
combination of descendants of long established groups_inheriting organizational structures, command and control processes, and
training procedures necessary to conduct sophisticated attacks_and newly emergent collections of the angry and disenfranchised
that become self-radicalized, particularly in the absence of economic outlets that would become narrower in an
economic downturn. The most dangerous casualty of any economically-induced drawdown of U.S. military presence would
almost certainly be the Middle East. Although Irans acquisition of nuclear weapons is not inevitable, worries about a nuclear-
armed Iran could lead states in the region to develop new security arrangements with external powers, acquire additional
weapons, and consider pursuing their own nuclear ambitions. It is not clear that the type of stable deterrent relationship that
existed between the great powers for most of the Cold War would emerge naturally in the Middle East with a nuclear Iran.
Episodes of low intensity conflict and terrorism taking place under a nuclear umbrella could lead to an unintended escalation and
broader conflict if clear red lines between those states involved are not well established. The close proximity of potential nuclear
rivals combined with underdeveloped surveillance capabilities and mobile dual-capable Iranian missile systems also will produce
inherent difficulties in achieving reliable indications and warning of an impending nuclear attack. The lack of strategic depth in
neighboring states like Israel, short warning and missile flight times, and uncertainty of Iranian intentions may place more focus
on preemption rather than defense, potentially leading to escalating crises. 36 Types of conflict that the world continues to
experience, such as over resources, could reemerge, particularly if protectionism grows and there is a resort to neo-
mercantilist practices. Perceptions of renewed energy scarcity will drive countries to take actions to assure their future access
to energy supplies. In the worst case, this could result in interstate conflicts if government leaders deem assured
access to energy resources, for example, to be essential for maintaining domestic stability and the survival of their
regime. Even actions short of war, however, will have important geopolitical implications. Maritime security concerns are
providing a rationale for naval buildups and modernization efforts, such as Chinas and Indias development of blue water naval
capabilities. If the fiscal stimulus focus for these countries indeed turns inward, one of the most obvious funding targets may be
military. Buildup of regional naval capabilities could lead to increased tensions, rivalries, and counterbalancing moves, but it also
will create opportunities for multinational cooperation in protecting critical sea lanes. With water also becoming scarcer in
Asia and the Middle East, cooperation to manage changing water resources is likely to be increasingly difficult both
within and between states in a more dog-eat-dog world.
Aff Answers
A2 UQ
A2 Link Arguments/ Zero Sum
US Investment benefits the Indian Tech industry, no risk of tradeoff
IBEF 15(India Brand Equity Foundation ,7-15-2015, "IT Industry in India, Indian Information Technology, ITeS Sector,
Services," India brand Equity Foundation , http://www.ibef.org/industry/information-technology-india.aspx)
India is the world's largest sourcing destination for the information technology (IT) industry, accounting for
approximately 52 per cent of the US$ 124-130 billion market. The industry employs about 10 million
Indians and continues to contribute significantly to the social and economic transformation in the country.
The IT industry has not only transformed India's image on the global platform, but has also fuelled
economic growth by energising the higher education sector especially in engineering and computer science.
India's cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the
US, continues to be its unique selling proposition (USP) in the global sourcing market. The Indian IT and
ITeS industry is divided into four major segments IT services, business process management (BPM), software
products and engineering services, and hardware. The IT-BPM sector in India grew at a compound annual growth rate
(CAGR) of 25 per cent over 2000-2013, which is 3-4 times higher than the global IT-BPM spend, and is estimated to
expand at a CAGR of 9.5 per cent to US$ 300 billion by 2020. India has emerged as the fastest growing market for
Dell globally and the third largest market in terms of revenue after the US and China, said Mr Alok Ohrie, Managing
Director, Dell India. Market Size India, the fourth largest base for young businesses in the world and home to 3,000
tech start-ups, is set to increase its base to 11,500 tech start-ups by 2020, as per a report by Nasscom and Zinnov
Management Consulting Pvt Ltd. Indias internet economy is expected to touch Rs 10 trillion (US$ 161.26 billion) by
2018, accounting for 5 per cent of the countrys gross domestic product (GDP), according to a report by the Boston
Consulting Group (BCG) and Internet and Mobile Association of India (IAMAI). In December 2014, Indias internet
user base reached 300 million, the third largest in the world, while the number of social media users and
smartphones grew to 100 million. Public cloud services revenue in India is expected to reach US$ 838
million in 2015, growing by 33 per cent year-on-yea r (y-o-y), as per a report by Gartner Inc. In yet another
Gartner report, the public cloud market alone in the country was estimated to treble to US$ 1.9 billion by 2018 from
US$ 638 million in 2014. The increased internet penetration and rise of e-commerce are the main reasons for continued
growth of the data centre co-location and hosting market in India. Investments Indian IT's core competencies and
strengths have placed it on the international canvas, attracting investments from major countries. The computer
software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth US$
13,788.56 million between April 2000 and December 2014, according to data released by the Department of Industrial
Policy and Promotion (DIPP). The private equity (PE) deals increased the number of mergers and acquisitions (M&A)
especially in the e-commerce space in 2014. The IT space, including e-commerce, witnessed 240 deals worth US$ 3.8
billion in 2014, as per data from Dealogic. India also saw a ten-fold increase in the venture funding that went
into internet companies in 2014 as compared to 2013. More than 800 internet start-ups got funding in 2014
as compared to 200 in 2012, said Rajan Anandan, Managing Director, Google India Pvt Ltd and Chairman, IAMA.
Most large technology companies may have so far focused primarily on bigger enterprises, but a report from market
research firm Zinnov highlighted that the small and medium businesses will present a lucrative opportunity worth US$
11.6 billion in 2015 and US$ 25.8 billion in 2020. Moreover, India has nearly 51 million such businesses of which 12
million have a high degree of technology influence and are looking to adopt newer IT products, as per the report.
Some of the major investments in the Indian IT and ITeS sector are as follows : Wipro has won a US$ 400 million,
multi-year IT infrastructure management contract from Swiss engineering giant ABB, making it the largest
deal for the technology company. Tech Mahindra has signed a definitive agreement to acquire Geneva-based
SOFGEN Holdings. The acquisition is expected to strengthen Tech Mahindras presence in the banking segment. Tata
Consultancy Services (TCS) plans to set up offshore development centres in India for Japanese clients in a bid to boost
the company's margin in the market. Reliance is building a 650,000 square feet (sq ft) data centre in Indiaits 10th
data centre in the countrywith a combined capacity of about 1 million sq ft and an overall investment of US$ 200
million. Intel Corp plans to invest about US$ 62 million in 16 technology companies, working on
wearable, data analytics and the Internet of Things (IoT), in 2015 through its investment arm Intel Capital.
The Indian IoT industry is expected be worth US$ 15 billion and to connect 28 billion devices to the internet by 2020.
Keiretsu Forum, a global angel investor network, has forayed into India by opening a chapter in Chennai. With this, the
Silicon Valley-based network will have 34 chapters across three continents. Government Initiatives The adoption of
key technologies across sectors spurred by the 'Digital India Initiative' could help boost India's gross domestic product
(GDP) by US$ 550 billion to US$ 1 trillion by 2025, as per research firm McKinsey. Some of the major initiatives
taken by the government to promote IT and ITeS sector in India are as follows: India and the United States (US) have
agreed to jointly explore opportunities for collaboration on implementing India's ambitious Rs 1.13 trillion (US$ 18.22
billion) Digital India Initiative. The two sides also agreed to hold the US-India Information and Communication
Technology (ICT) Working Group in India later this year. India and Japan held a Joint Working Group conference for
Comprehensive Cooperation Framework for ICT. India also offered Japan to manufacture ICT equipment in India.
The Government of Telangana began construction of a technology incubator in Hyderabaddubbed T-Hubto
reposition the city as a technology destination. The state government is initially investing Rs 35 crore (US$ 5.64
million) to set up a 60,000 sq ft space, labelled the largest start-up incubator in the county, at the campus of
International Institute of Information Technology-Hyderabad (IIIT-H). Once completed, the project is proposed to be
the worlds biggest start-up incubator housing 1,000 start-ups. Bengaluru has received US$ 2.6 billion in venture
capital (VC) investments in 2014, making it the fifth largest recipient globally during the year, an indication of the
growing vibrancy of its startup ecosystem. Among countries, India received the third highest VC funding worth
US$ 4.6 billion.
Global tech investments in India now havent triggered the link, so theres no reason
to think the plan will
Crabtree 15 (James Crabtree, Mumbai, 2-26-2015, "Indias technology sector receives record funding," Financial Times,
http://www.ft.com/cms/s/0/e7f0d4f2-bdc0-11e4-9d09-00144feab7de.html)
Aspate of deals by global venture capital groups has pushed investment in Indian technology companies
to its highest level, in a further sign of growing excitement over the countrys booming internet
economy.Fresh funding for fast-growing e-commerce groups such as Flipkart and Snapdeal led to
technology-related private equity deals jumping to a record $2.7bn in the final quarter of 2014, exceeding the
previous high set during 2012, according to data compiled by PwC, the professional services firm. The influx was
driven by investors including SoftBank of Japan and US-based Tiger Global, which are betting increasing sums of
money on the hope that Indian internet businesses will soon match the rapid growth enjoyed over recent years by
Chinese equivalents such as Tencent and Baidu. There is a frenzy, said Mohandas Pai, an investor and entrepreneur
based in Bangalore. American funds are coming from Silicon Valley, the Chinese and Japanese are coming
having made money in the Alibaba listing...They see this as the next big market that is ready to grow. The
number of Indians connected to the internet is forecast to expand from 300m to more than 500m by 2018, according to
Morgan Stanley. The proportion of the population shopping online is also increasing rapidly, albeit from a low base.
Partly as a result, internet companies now dominate Indias investment scene, making up more than half of
the value of all private equity deals struck in the fourth quarter of 2014, according to PwC. The value of
technology deals also increased more than threefold compared with the same period the year before.
Prominent investments during that period included a $700m funding round in December for Flipkart at an
estimated valuation in the region of $11bn, led by Tiger Global, alongside smaller deals for the likes of taxi app
start-up Olacabs and property portal Housing.com. Hype over Indian technology has increased further this year,
in particular following the debut investment from Chinese internet group Alibaba, which struck a deal worth about
$500m for a stake in New Delhi-based mobile payment platform Paytm last month. Some analysts have raised doubts
over the steep valuations being accorded to lossmaking technology start-ups, and are worried that a glut of funding will
lead to ferocious competition and tempt inexperienced entrepreneurs to burn through cash. But Mohanjit Jolly, a partner
at DFJ Ventures, a US investment group, said the size of Indias market and its clear parallels with China means the
value of technology deals is now likely to increase further this year. Investors see the same size of the population [as
China], the huge growth potential, the untapped market in second tier cities and towns . . . So my gut says that the
capital flow will continue, because India just has plenty of headroom, he said.
No risk of tradeoff, US investment benefits both the US and Indian economies

Relander 15 (Brett Relander, 1-22-15, Brett is a thought leader, growth hacker, and power influencer in the
social media, mobile, and digital marketing strategy space. He is the Founder of Launch & Hustle, a valued
digital marketing consultant & speaker, and the author of Imperative - How any business can quickly and easily
leverage mobile marketing for radical success. Brett was also named in 2015 as one of the Top 100 Social Media
Power Influencers. Investopedia, http://www.investopedia.com/articles/investing/042415/why-indian-tech-
startups-are-attracting-investors.asp)
When we think of territories which could rival Silicon Valley in the ability of their tech companies to bring
in investors, India might not be the first place that comes to mind. That is precisely what is happening,
however. According to Bank of America Merrill Lynch, investor meetings are now demonstrating
tremendous interest in India. This financial institution has in fact reported that it expects companies in India
to raise approximately $100 billion of capital over the next three years . (For related reading, see article: Should India
Be On Investors' Radars?) Why Investors Are Turning Their Attention to the Indian Tech Startup Scene Among the many reasons
that investors are showing increased interest in tech startups in India is the fact that the Indian government has taken proactive
measures in the sectors of power, coal, and roads in order to ensure that the economy thrives. Recognizing the potential that India
holds for attracting investors from around the world, Prime Minister Narendra Modi has been on a journey to point out to prospective
investors how much India has changed in just the last few years. Modi has even gone as far as to inform industry leaders that his
country is willing to take whatever corrective measures are necessary to ensure that India can be transformed into a hub for
manufacturing, which could serve to further bolster the country's tech sector. Over the last couple of years alone, a number
of venture capital (VC) funds and seed fund companies have opened up with the express purpose of
supporting the tech startup scene in India. Such companies include Indian Angel Network, Nexus Venture Partners,
Seedfund, and Kai Capital. Domestic VC firms are not the only investors interested in tapping into the potential presented by Indian
tech firms. Foreign firms are also showing interest. (See article: The Stages In Venture Capital Investing.) Where the Interest Lies in
Indian Tech Just one of these startups is PepperTap, a grocery delivery service that enables users to have everyday household items
delivered to their homes via a mobile app. The company recently announced that it has brought in $10 million in funding from
Sequoia Capital and SAIF Partners. While a grocery delivery app service might seem rather mundane, it is a sector that is taking off in
India. Grofers, another such service, has also announced the generation of $35 million in funding from Tiger Global and Sequoia
Capital. Also, ZopNow, based in Bangalore, managed to raise $10 million in funding from a variety of sources, including Accel
Partners, Dragoneer Investment Group, Times Internet, and Qual-Comm Ventures. The concept of purchasing groceries online is one
that is rapidly growing throughout India, largely driven by a burst of mobile delivery startups that make it possible for consumers to
have the items they need delivered to them within about an hour in most cases. PepperTap, currently operating in West Delhi and
Gurgaon, has formed partnerships with several stores in the local area. New startups are not the only companies looking
to tap into this emerging sector. Amazon India has also expressed interest in this sector, and has even
launched a special app using a specialized logistics system to meet rising demand to have items delivered
from local kirana stores. Items can typically be delivered within three hours. Google Aims to Make a Footprint in India Investor
interest in India has reached such a peak that even Google Capital has announced it will be joining Tiger Global,
SoftBank, and other investors in an effort to establish an office for itself there. Although this late-stage fund
is only a year old, its outpost in India would be its first office to be set up outside the U.S.. According to
Google, the company sees a lot of sense in focusing on India at this juncture in time, in light of a trend of increased adoption of
smartphones, along with the country's active startup community. Beyond the mobile grocery delivery startup sector, India has
seen
a tremendous amount of funding flood into the country. Last year, Tiger Global raised some $2.5 billion, the
majority of which has reportedly been specifically set aside for investing in Indian startups. At the same time, SoftBank announced
plans to funnel $10 billion into India. In fact, a group of investors led by SoftBank recently announced they are in talks to
purchase a 20 percent stake in Micromax Informatics, an Indian handset maker, for as much as $1 billion.
That investment would send Micromax's value up to as much as $5 billion. Even Japan has jumped onboard by
injecting funding into Snapdeal, an e-commerce firm. Google's move to establish an actual office in India might be revolutionary, but
it is not the first time that Google Capital has expressed interest in the country. The firm has already provided funding for
CommonFloor, a real estate portal, as well as Freshdesk, a joint U.S.-Indian firm. To date, there has been a tremendous amount of
investor interest across the board in India. While the billions of dollars flowing into the booming startup sector in India is good news
in many regards, there are also some concerns. An increasing number of investors are beginning to worry that rising valuations of
startups could result in limited options and damaged market listings in terms of exit strategies. Investors are specifically concerned
about the potential end result for initial public offerings (IPO) in light of the rapidly rising prices for stakes sold privately. Late stage
investors have expressed concerns that the public market might not have the same optimistic view as the private market. (See: An
Introduction To The Indian Stock Market.) There are also concerns that India's startups might not be able to sustain their valuations in
light of the rate at which they must burn cash in order to attract new customers. Some estimates indicate that online startups in India
spend as much as $27 to bring in each new customer. Although valuations have remained high, late-stage investors often have unique
concerns that might not be an issue for early stage investors. In such instances, both the exit risks and the potential return risks are
much greater. (See: Financial Concepts: The Risk/Return Tradeoff.) Despite these fears, investors continue to be all too
willing to inject funding into this Asian country. In just a little over a year, investors have funneled $4.5
billion into e-commerce in India. Many investors may be afraid of missing out on a limited-time opportunity. That factor alone
could at least partially be responsible for the rapidly rising valuations.
Not Zero Sum, Current US venture capitalist investment proves

Lau 14(Ashley Lau, 11-24-2014, "U.S. investors elevate India over other emerging markets," Reuters India,
http://in.reuters.com/article/2014/11/24/india-investment-etfs-modi-idINKCN0J826120141124)
U.S. investors, buoyed by optimism about India's economy and booming stock market, have been moving money
into exchange-traded funds that focus solely on that country. U.S.-listed India ETFs have added about $2
billion in net new assets so far this year, outshining other emerging market funds. That brings the total
assets of the 10 India ETFs tracked by Morningstar to $6.3 billion, up roughly 47 percent since January. Those
inflows dwarf the $272 million added to broad emerging markets ETFs this year and represent the greatest single-
country net asset gain when compared with U.S.-listed ETFs that focus on Brazil, China, Russia or South
Africa. The optimism about India is largely driven by the election of Prime Minister Narendra Modi in May. Analysts
and investors expect Modi's push for economic reform to rejuvenate earnings and create jobs. Investor appetite has
driven the MSCI India Index up 28.5 percent year-to-date - its highest in more than two decades. That sentiment is a
big shift from 2012, when HSBC Holdings PLC called India a "gasping elephant" in a report highlighting the country's
poor economic growth. The Organization for Economic Cooperation and Development last week upwardly revised its
growth forecast for India, to 6.6 percent from an earlier forecast of 5.7 percent. "We are believers of the India story
long-term," said Darshan Bhatt of New Jersey-based Glovista Investments LLC, which runs an emerging markets
equity strategy for clients. Bhatt went from having no position in India in January to having as much as 17 percent of
his portfolio in the country earlier this year. To build his Indian position, he has been selling Russian, Brazilian and
South Korean shares. He has dialed back his Indian holdings a bit, he said, but still remains bullish. India's gains stand
in contrast to the 4.7 percent gain for the Vanguard FTSE Emerging Markets ETF and the 1.6 percent gain for the
iShares MSCI Emerging Markets ETF this year. The so-called BRICS group - Brazil, Russia, India, China and
South Africa - all moved together a decade ago, but now India is pulling away from the others, said Dennis
Hudachek, a senior analyst with ETF.com. The India optimism contrasts with expectations of slowing growth in China
and a tepid reaction to the re-election of Brazil's president last month. Among the biggest India ETFs, the WisdomTree
India Earnings ETF is up about 35 percent year to date, while the iShares MSCI India ETF is up 31 percent year to
date, and the PowerShares India ETF is up 29 percent. The WisdomTree ETF has added about $830 million in assets,
while the iShares ETF has gained about $875 million and the PowerShares ETF has added about $94 million.
PRICEY VALUATIONS While the strong U.S. dollar has pressured global currencies this year, the Indian rupee is
relatively unchanged against the U.S. dollar since January and so far has not significantly affected U.S.-listed India
ETF returns. Still, high valuations in the country can make the market expensive relative to other countries.
The MSCI India Index has a price-to-earnings ratio of about 20, the MSCI Emerging Markets Index has a P/E ratio of
about 13, and the MSCI BRIC Index has a P/E ratio of about 11. California-based investor David Garff of Accuvest
Global Advisors still sees a strong investment opportunity in India and is now "significantly overweight" in the country,
moving assets from Brazil, Russia and Malaysia. "It's one of the few places in the world where people can find
growth opportunities, so they're willing to pay up for them right now," Garff said.
The US Economy is heavilly involved in the Indian tech industry now, the link wont be
triggered
Pasricha 15 (Anjana Pasricha, 05-16-2015, VOA News correspondent, Tech Startups Boom in India, Attract
big investment, Voice of America (VOA), http://www.voanews.com/content/tech-startups-boom-in-india-attract-
big-investments/2750947.html)
From online retail to textbook rental companies to digital advertising, India

is witnessing a boom in
online startups. Global investors eyeing the growth of Indian technology firms are
helping these young, tech-savvy entrepreneurs fund their businesse s. Along with two
friends, 32-year-old Jaideep Manchanda quit his job in a media group four months ago to launch a venture
(www.aqugen.com) that advises companies about digital advertising strategies. He took the plunge after seeing that
Indian firms lag those in developed markets like the United States in terms of reaching customers online. This
industry is almost ten years behind in India. Even the biggest of companies are wondering as to when and how to
revamp their digital advertising budgets. There are a lot of companies who dont even have a clue as to what to do,
said Manchanda. As the number of internet users in India grows to about 300 million, many young people like
Manchanda are trying to harness the massive potential of online businesses .
Unlike the Indian
information technology companies that mushroomed in the 1980s to set up massive
outsourcing centers for Western companies, the new startups are tapping the
consumer potential of the countrys huge middle class. Only 25 percent of the population of 1.2
billion is presently online, but fast-growing sales of smart phones are fueling internet access at a furious pace. Gold
rush A recent report by the industry body National Association of Software and Services Companies (NASSCOM)
found that India is now the fourth largest startup hub in the world , with more than 3000 new
companies. Over the next five years, that number is expected to grow to 11,500. It is being termed a gold rush.
NASSCOM Senior Director Rajat Tandon said the time is right for people to go out and live their dreams. [We have
reached] the inflection point where people, rather than going and working for multinationals, are today looking at
having the idea and work for themselves, and actually make it big. If you really see the buzz which is happening on the
ecosystem right now, I think this is probably the most interesting period for startups, said Tandon.
The
thriving entrepreneurial culture has been fueled by success stories of local online
companies such as Flipkart and Snapdeal, which reached multi-billion dollar valuations last year. The valuation of
Flipkart, the poster child of Indian startups, rose from $3 billion to $11 billion in just one year.
While online retail is grabbing the most attention, technology startups are tapping customers in a host of other areas,
such as renting textbooks, selling used goods or notebooks for school students, price comparison portals, and booking
tickets. Foreign ventures Foreign online ventures have also stepped into the country to get a slice of the growing
market. Raghav Gupta quit his job as a senior retail consultant to launch BlaBlaCar, the France-based long distance
ridesharing service popular in Europe. Gupta said what made India attractive for BlaBlaCar is the high penetration of
social media. Facebook has more than 110 million members here. Social media is the main marketing platform for the
carpooling company, which Gupta said has hit the ground running, with 125,000 seats offered in the first 100 days.
What is also very interesting is this is not a big city phenomenon, so it is not just Mumbai and Delhi and Pune, but we
have seen seats offered from 700 cities in India. So even in smaller cities like Yamunanagar or Rishikesh, people are
aware of a service like this, they are online, they are on smart phones and they are willing to use it, because it is
answering to a very fundamental need of people to be able to travel between cities in comfort, said Gupta. Gupta
chose to leave his well-paid job because of the tremendous opportunities India offers entrepreneurs. Although many
online ventures have yet to turn a profit, they
have grabbed the attention of global and domestic
financiers. As a result, funding is no longer as challenging as it was some years ago
hedge funds and venture capitalists poured in about $5 billion in Indian e-commerce
companies last year. 'Exciting times' Sasha Mirchandani, founder and head of Kae Capital in Mumbai, called
it exciting times as investors try to carefully pick the large winners in India. He is an investor in several online
ventures. I think it is pent up demand. China
has slowed down a little bit, so the next new
opportunity was obviously India. Russia and Brazil have not been traditional
startup locations, so India logically makes sense from all angles. Large market,
consumer internet has taken off, said Mirchandani. Among those who have committed funds are large
investors like Singaporean wealth fund Temasek Holdings, venture capitalists Accel Partners and Japan's SoftBank
Corp. Their interest has been triggered by hopes that some Indian startups could reach the size and scale of Chinese
ventures such as Alibaba. Tandon of NASSCOM said there is huge optimism around the future of
Indian startups. Why not? The ingredients are being built and we have had some really cool products coming
out of the country. Some of them have been successful and some of the entrepreneurs are saying why cant we build
something that is futuristic, said Tandon. That is what is driving many young people like Manchanda. Yeah, its
definitely one positive step, its like one baby step that we have taken, and we have yet to see where we go. But
definitely it gives the drive in you, it keeps the rush inside you, said Manchanda. Investor Mirchandani, who saw
companies like Snapdeal scale up right in front of my eyes, said Indian
technology entrepreneurs
have achieved credibility and could become a backbone of the economy.
Indias technology industry provides for US econ, link wasnt triggered

Dhingra No Date (Lalit Dhingra, No Date, President of NIIT Technologies high-octane US
operations. He is an industry veteran based in Atlanta, with broad IT experience in Financial
Services, Travel, Transportation and Logistics, and Media industry verticals., US India Tech
Expansion, how to grow without stumbling, NIIT Technologies, http://www.niit-tech.com/us-india-
tech-expansion-html)
Todays dynamic India-US information technology (IT) partnership actually grew out of a historical
accident. From the 1950s, US tech icon IBM had a virtual monopoly of computers in India. Its 360 family
of computers, released in the 1960s were the workhorse for large organizations and they had legions of
programmers to write software for the machines. In 1978, however, George Fernandes, then Indias
minister of industries asked IBM to take local shareholders into its subsidiary. Big Blue refused, and
wound up operations in India. IBMs exit in 1978 left India with thousands of programmers with
unparalleled expertise in writing glitch-free software for old mainframe systems. The presence of talented
Indian engineers in Silicon Valley soon prompted US firms to turn to India at a time of programmer
shortage. The rest, as they say, is history. The US high-tech hubs of Silicon Valley in California and Route
128 Corridor in Massachusetts now have deep ties with their Indian counterparts, Bangalore and
Hyderabad. For those wondering about IBMs fate in India, the US firms re-entry and
rapid expansion in India demonstrates how the burgeoning economic relationship has grown between the
two
countries from relatively marginal dealings a few decades ago. IBM most likely now employs more people
across India than in the US. According to an internal document cited by Computerworld, IBM has 112,000
workers in India, up from just 6,000 in 2002. The last time IBM made a public statement about its US
workforce was in Congressional testimony in Fall of 2009, when it pegged its US workforce at 105,000.
Clearly, India is a crucial cog in the machine at IBM which now runs large software programming and BPO
operations in India. According to India's main software trade body, the National Association of Software
and Services Companies (Nasscom), currently 10 out of 15 tech companies in India are from the United
States. Partners in Innovation The Indian IT industry has evolved from a legacy services-based solution
provider to a partner in product and services innovation over the last four decades. Using the Internet as the
digital equivalent of Americas interstate highway system, more than 1,000 Indian tech services companies
are delivering vital, high-quality brainwork for hundreds of large American corporations. More than
800,000 engineers are busy in India writing the software that keeps Wall Street, the Motor City and
Hollywood running. They are designing computer chips, circuit boards, and sophisticated machinery for the
consumer electronics, aerospace and health-care industries, writes Steve Hamm in his book Bangalore
Tiger. At the same time, 400,000 young Indians work in the booming BPO segment, an offshoot of the
tech industry, handling accounting, medical claims processing, insurance, customer service and other
business functions for US companies. At least two in five of Americas Fortune 500 companies outsource
their software from India. The large Indian IT companies are not relying too much on labor arbitrage
anymore and have focused instead on gaining domain knowledge and expertise in a broad range of
technologies. They are spurring innovation by striking major product development partnerships with US
companies. In a positive sign, every year Indian tech firms help US clients take products and services from
concept to the market place. Some Indian tech companies are even willing to take the capital risk for their
clients in exchange for a share of the gains once the new services and products enter the market. Its hard
to identify a single mainstream IT product, website, computer, cell phone or other such item that does not
owe its origin to the brainpower of both countries, said Nasscom President Som Mittal in the foreword to
the report titled Indias Tech Industry in the US. Indian companies deliver sophisticated services to US
clients with the right people, in the right place and at the right time. They have been pioneers in
establishing the global delivery model. Their client-centric Global Engagement Model (GEM) ensures 24/7
delivery of services through onsite, nearshore and offshore centers. Abiding by the Rules of Free Trade In
order to boost revenue growth, Indian companies must enjoy a level playing field in America. As the fate of
the H-1B visa program rests with the US Congress, Indian tech firms are losing sleep over proposed
changes to the H-1B visa portion of the US immigration bill. The US-India Business Council (UIBC) and
Nasscom, which represents Indias technology sector, which clocks in $100 billion in annual revenue, are
asking House lawmakers to kill restrictive provisions for H-1B and L-1 visas. US must avoid
protectionism, India must liberalize When an industry sector reaches a high growth point for an exporting
nation and the growth trajectory remains high for several decades then ceteris paribus, its bound to attract
the attention of domestic policymakers and will nudge domestic companies to lobby for measures that will
help them deal with growing competition from foreign rivals. India provided umbrella shelter for many
years to its domestic sector to thrive ever wondered why we never saw the well engineered Volvo trucks
on Indian roads in the 90s and for the most part of the new millennium? But creating US policies and
legislation which will cripple an already mutually productive exporting sector like IT is not a wise course
as it will send signals to foreign companies to be cautious about investing in America. Similarly, US
companies have been waiting for India to further open its consumer markets to US trade and investment.
India has switched to a must-be-in market from a nice-to-be-in market for US companies targeting
Indias burgeoning middle class. But US companies say they are hamstrung by Indias poor infrastructure,
red-tape, policy incoherence, burdensome investment and regulatory restrictions and an absence of big
bang reforms from New Delhi. Unfortunately, India-US economic relations still remain underdeveloped,
stymied by a lack of vision and Indian skittishness toward liberalization. The US is now India's top trading
partner in goods and services. The Indian IT industry has developed a loyal roster of US clients. Wrap it all
together and we have the potential for a much more vibrant bilateral trade relationship with the IT industry
as one of its cornerstones.
No risk of tradeoff, India welcomes tech investment

While the underlying theme of 2010 was that of steady recovery from recession, thanks to the accelerated
recovery in emerging markets, worldwide spending in IT products and services increased
significantly in 2011. In 2011, Indias growth has reflected new demand for IT
goods and services, with a major surge in the use of private and public cloud and
mobile computing on a variety of devices and through a range of new software
applications. High inflow of FDI in the IT sector is expected to continue in coming
years. The inflow of huge volumes of FDI in the IT industry of India has not only
boosted the industry but the entire Indian economy in recent years. Foreign direct
investment (FDI) inflow rose by more than 100 per cent to US$ 4.66 billion in May
2011, up from US$ 2.21 billion a year ago, according to the latest data released by the Department
of Industrial Policy and Promotion (DIPP). This is the highest monthly inflow in 39 months.
Foreign technology induction is also encouraged both through FDI and through
foreign technology collaboration agreements. India welcomes investors in
Information Technology sector. Greater transparency in policies and procedures
has made India an investor friendly platform. A foreign company can hold equity
in Indian companys upto 100%

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Econ Generic DDI 15

Growth is not sustainablemodels prove

Market Capitalism requires waste to survive

Harrod also enunciated the concept of the Natural Growth

Sustaining economic growth is impossible in light of its environmental harms

Internal limits mean economic growth is unsustainable

Econ collapse is inevitable under the current modeldegrowth solves

A broad and deep economic crises leads to movements against growth

Degrowth can be concrete and measurable

Transition is possible- humans are very adaptable

Degrowth mindset possible- already started in populations of the UK and Australia

A2: Economic Decline Causes War

A2: Economic Decline Causes War Ext.

No impact to another recession.

No causal relationship between the economy and war.

Comprehensive study proves no relationship.

Only econ collapse solves in the necessary timeframe

Economic growth kills the environment scientific study proves

ECONOMIC GROWTH key to BIODIVERSITY

COMPARISONS BETWEEN ADJOINING countries separated by politics or economics can be

Economic growth solves poverty poorest 40%

Economic growth solves poverty in affluent nations Brazil

GROWTH IS GOOD FOR THE POOR

GROWTH IS A NECESSITY FOR EQUALITY AND STABILITY

Double dip recession causes nuclear war

Escalation is likely rational action breaks down.

History proves (short version)

Economic decline makes all conflicts worse quickly.

Economic decline causes nuclear war

Economic growth results in strong tech sector

Researchers have found a link between technology innovation and national

Innovated information and communications technology reduces CO2 emissions

Technology can be applied in many often very innovative ways to solve

Rapid industrialization in Saudi Arabia is creating serious environmental problems,

The internet economy fuels short-terminism on behalf of investors and neglects

The internet economy encourages a get-in-and-cash-out mindset rather than

Every day, some start-up company founded by a Millennial entrepreneur gets

America can breathe a sigh of relief. The economy is improving

US ECON IS STABLE NOW

Valuations of tech companies are unreasonably high- we are in a tech bubble

these unicorns lying around means we're in a bubble. I was somewhat

what it's like when everyone runs out of money at once

Charles Schwab, Salesforce.com and Kraft Foods. It's allegedly

startups increases its valuation not because the underlying

Tech bubble now

Ubers value extremely high- tech bubble now

Prominence of unicorns shows tech bubble now

Too many unicorns

Tech Bubble Now- Many similar warning signs from 2000

No bubble now- much better than in 1999

More moderate tech sector than in 2000

Tech boom not bubble

Companies have lower PE ratios and sustainable business models- no bubble

No bubble- gradual growth and careful venture capitalists

US companies surpass competition - Amazon holds 28% of global cloud storage

percent of the worldwide market for cloud infrastructure services, followed by

US companies growing customer demand is the motivation

Tech globalization now

Technology is Reshaping the Global Property Industry Technological innovation is

US tech falling behind other countries

Exponential growth consumers see opportunity in cloud computing

Problems in April with Amazons cloud computing platform sparked media

Private clouds are failing now research explains the reasons

Cloud computing fails technological pitfalls are abundant