Business Impact

Obama’s Technology Legacy

The past eight years saw some wins, and more than a few failures.

The 44th president of the United States is getting ready to leave the White House, and on Tuesday will give his farewell address.

As @POTUS contemplates his legacy, the editors of MIT Technology Review took a look back at some of the most important technology initiatives of his eight years to assess that record. He succeeded in some important ways, such as supporting net neutrality and joining global action on climate change. But there were failures, too—remember healthcare.gov?—and even some of the successes are now in question as a new administration comes into power.

Here is an assessment of five particular signature technology topics: upgrading government use of technology, net neutrality, stimulus spending on technology, electronic medical records, and advanced manufacturing.

President Obama speaks as Facebook CEO Mark Zuckerberg looks on during a town hall meeting on April 20, 2011, at Facebook headquarters in Palo Alto, California.

How Government Uses Technology

The healthcare.gov disaster led the president to encourage government to act more like a tech company.

Barack Obama’s very first executive order back in 2009 wasn’t about reshaping U.S. health care, closing the Guantanamo Bay detention center, or any other high-profile political issue. It was one requiring the U.S. government to use technology to be more transparent and effective.

Obama’s campaign had famously relied more on computers and the Internet than any before. Now the Open Government Directive showed that he wanted to see digital technology change how government works, too. Eight years later, this wonky and obscure thread of his legacy may become one of the most enduring.

Obama did unusually well attracting Silicon Valley veterans to Washington to help with the goal. His interest in the Internet and the industry seemed evident in his first campaign, says Brian Behlendorf, a leading figure in open-source software who helped Obama’s campaign, and then advised on open-government projects in the White House. And technologists clicked with him. “I think it had a lot to do with him—the fact that he was the young outsider, not the establishment,” Behlendorf says.

In Obama's first term, the White House joined Twitter, launched its first blog (complete with comments), let citizens petition their government online, and hired America’s first chief technology officer. It built new kinds of services such as recovery.gov, which let anyone track how Obama's $800 billion stimulus package was spent.

Then an embarrassing digital disaster forced the Obama administration to step up its efforts. Nearly $500 million was spent building the healthcare.gov insurance exchange that was at the heart of Obama’s Affordable Care Act. But when it launched in October 2013, the site barely worked.

The Google engineer who led the “trauma team” of industry experts brought in to rescue the site afterward became head of a new, permanent group of software wizards dubbed the United States Digital Service—to help agencies prevent big projects spiraling out of control.

A second group, called 18F, was created to help agencies improve how they build and procure technology. Modeled on a startup, it encourages avoiding cumbersome procurement contracts in favor of the flexibility offered by open-source software and cloud services.

Aaron Snow, who cofounded and later led 18F, argues that Obama's efforts to make the government smarter about technology should survive—and perhaps even expand—under his successor and later presidents. “Our core value and proposition is very nonpartisan,” he says. “Nobody argues with the notion that when the government spends money on IT, it should do so efficiently.”

President Obama shakes hands with venture capitalist Tom Wheeler, his nominee for the FCC, on May 1, 2013.

Net Neutrality

The fight over how to regulate ISPs has turned ugly.

There is bipartisan acceptance of the general idea behind “net neutrality”: that companies selling online services and applications should all operate under the same set of rules, and that Internet service providers should not be allowed to discriminate among them. How to do that effectively without overstepping government’s proper role is where the disagreement begins.

The FCC’s Open Internet Order, the seminal statement by the Obama administration on the topic, now seems in danger. The law, enacted in 2015, bans ISPs from blocking or throttling legal traffic, and from engaging in business arrangements in which companies pay extra to have their traffic prioritized. It also gives the FCC the authority to police other practices potentially harmful to consumers or to competition.

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The FCC recently acted on that authority when officials expressed “serious concerns” that AT&T might be violating the law by letting users stream DirecTV, which it owns, without it counting against their data caps—a practice called “zero rating.” Fear that this kind of preferential treatment would hurt competition is one reason many Democrats have supported the order.

Prior net neutrality rules had been struck down in 2014, and the FCC followed President Obama’s suggestion to strengthen the policy by classifying broadband as a “telecommunications service” rather than an “information service,” as it had been before. That allowed the FCC to treat ISPs as common carriers, like airlines or telephone companies, a classification subject to stricter regulation.

Republicans on the commission and in Congress have rejected this characterization, arguing that it represents a dangerous expansion of government power, with Senator Ted Cruz of Texas calling the  rules “Obamacare for the Internet.” Under the Trump administration, Republican FCC commissioner Ajit Pai recently predicted, the policy’s “days are numbered.”

Cruz’s Obamacare analogy may prove true in one sense, says Harold Feld, senior vice president of Public Knowledge, a Washington-based public interest group that supported the Open Internet Order. Some aspects of Obama’s signature health-care law are quite popular, and so too are some of the equity provisions in this policy.  That makes simply repealing it politically risky. And the stakes are high, notes Feld, since “the Internet is so essential to everybody’s lives and to our commerce.”

President Obama and Vice President Joe Biden speak about the economic stimulus plan on April 13, 2009.

Stimulus Bill

The $100 billion for technology and R&D was more boondoggle than a boon to clean energy.

The stimulus bill passed early in President Obama’s first term jolted the tech community with unprecedented levels of federal spending on energy projects, health-care electronic records, and broadband build-outs. Spending on technology and R&D totaled a staggering $100 billion. Big winners included renewable projects and research, especially for solar and advanced battery manufacturing.

Eight year later, the legislation’s accomplishments in the technology and energy sectors are decidedly mixed. Support for renewable-energy production helped grow the wind and solar markets, and the 2010 federal loan to Tesla Motors helped keep the fledging electric-vehicle manufacturer afloat. Likewise, the increase in energy R&D funding was badly needed after years of federal neglect and gave birth to such programs as ARPA-E to support early stage clean-energy projects.

But the failures were notable and grabbed the headlines, greatly damaging the image of the clean-energy sector as a promising area of investment. Most infamous was the 2011 bankruptcy of Solyndra, which had received a $535 million loan guarantee in 2009. Several large battery manufacturing plants in Michigan funded by the federal government also collapsed. One, A123 Systems, received a $249 million grant in 2009 and built a pair of manufacturing plants in Michigan, only to run into financial trouble and eventually be sold at bankruptcy auction to a Chinese-based conglomerate at a fire-sale price. 

The biggest disappointment of the legislation was its failure to jump-start a “clean-energy economy” as President Obama and his advisors had hoped. Even as the stimulus package was being rolled out, economists warned it conflated very different and at times conflicting objectives. Overall, the $787 billion bill, officially known as the American Recovery and Reinvestment Act, was designed to provide a massive monetary boost to help fix an economy devastated by the ongoing recession. That required spending money as quickly as possible and creating as many jobs as possible, particularly in economically troubled areas. Directing some of that money to green energy and technology development was laudable, but energy projects require rigorous due diligence and decisions that are best for the long-term growth of the industry, rather than funding for high-profile projects meant to create “green jobs” in depressed areas such as parts of Michigan.

Overall the stimulus bill helped heal the general economy, but the verdict on the massive spending on energy? It was, said Josh Lerner, a professor at Harvard Business School, in these pages late last year, “a bit of a disaster.”

President Obama signs a memorandum in 2009 after announcing that funding for digital medical records would be part of the stimulus spending.

Electronic Medical Records

Expensive to install, the systems have yet to cut costs or improve the quality of care for patients.

When the president mandated in 2009 that all health-care providers abandon paper files for electronic health records, the White House claimed the move would cut costs, reduce administrative work, and improve the quality of care for patients.

But even after billions of dollars in federal incentives to help doctors and hospitals buy these electronic systems, those promises have not been kept.

While nearly all reported hospitals—about 96 percent—now have an electronic health record system that meets government standards, these systems don’t operate well with one another and are plagued by security problems. Physician productivity has dropped and costs have risen.

Tempted by the incentive payouts, some health-care providers bought these systems before they had time to properly train physicians on them or learn how to secure them from hacking attacks, says Niam Yaraghi, a fellow at the Brookings Institute’s Center for Technology Innovation.

Privacy breaches in health care have been rising. In 2016 alone there were 319 health-care breaches that affected 500 individuals or more with a total loss of more than 16.5 million records, according to the Office of Civil Rights under the Department of Health and Human Services.

This month, the Wall Street Journal reported that the MD Anderson Cancer Center was cutting 800 to 900 jobs, or about 5 percent of its workforce, due to a drop in physician productivity after implementing an electronic record system in 2015.

Scott Wallace, managing director of Institute for Value in Health and Care and associate professor of medicine at the University of Texas at Austin, says many of these systems already need to be upgraded and improved because they’re simply not practical for clinicians.

Another big disappointment of these systems, Wallace says, is how difficult it remains to share medical records across different hospitals and health-care systems, such as those in different states, something that had been an early argument for the switch to electronic medical records.

Wallace is confident, though, that in the coming years, many electronic records systems will improve as software companies and hospital systems respond to the needs of patients and physicians. But so far, they are not the breakthrough once hoped.

President Obama speaks at a Ford Assembly Plant in Wayne, Michigan, on January 7, 2015.

Advanced Manufacturing

The president didn’t meet his jobs promise, but he did set the nation on course toward innovative manufacturing.

When it comes to manufacturing, President Obama did not deliver on one clear goal. He promised his policies would lead to one million new manufacturing jobs during his tenure. Only one-third that many came through. The reasons for the shortfall are complex, among them a slow recovery from the recession of 2007 to 2009 and a lack of industry investment in domestic manufacturing. But science and technology policy experts give him credit for being the first president to create a national strategy for promoting manufacturing innovation, something they say is crucial if U.S. manufacturing is going to truly revitalize and become more globally competitive as new technologies, especially digital tools and automation, rapidly transform manufacturing.

Obama’s National Strategic Plan for Advanced Manufacturing aimed to accelerate public and private investment in advanced manufacturing, increase funding for research and development, create new public-private partnerships to accelerate the deployment of new manufacturing technologies, and train workers.

Such a national strategy makes it possible to coördinate “a whole raft of disparate policies”—tax, trade, regulation, and technology policies among others—relevant to the development of new advanced manufacturing industries and businesses, says Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation. U.S. competitors China, Germany, Sweden, the United Kingdom, and the European Union have all recently adopted national advanced manufacturing strategies.

The most tangible result of Obama’s plan so far is Manufacturing USA, a network of 13 “Manufacturing Innovation Institutes” spread across the country. The network’s mission is to connect manufacturing researchers from academia, startups, big corporations, and the government and facilitate important collaborations on emerging technologies like additive manufacturing, flexible hybrid electronics, and advanced tissue fabrication that would be difficult to achieve otherwise.

The institutes help remove administrative barriers, facilitate networking and training, and provide laboratory space where researchers can demonstrate new tools and processes. The convening role of the government here is necessary because developing brand new manufacturing processes and technologies “is something no single enterprise can achieve on its own,” says Ezell.

Whether the next administration will continue to supply the funding and support the institutes require is unclear.

Contributors: Emily Mullin, Mike Orcutt, David Rotman, and Tom Simonite

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