When US President Joe Biden signs the American Rescue Plan Act into law, he will add US$1.9 trillion of economic stimulus to the US$2.2 trillion provided by the Coronavirus Aid, Relief, and Economic Security Act and US$0.9 trillion included in the federal government’s appropriations bill for 2021. This brings the combined fiscal stimulus of the Trump and Biden administrations to US$5.3 trillion, or an estimated 27 per cent of US GDP.

This vaults the US to the top of the COVID-19 Economic Stimulus Index alongside Singapore, which has spent the equivalent of 27 per cent of GDP in its pandemic response to date. Within the Asia Pacific region, only Australia (18 per cent of GDP) comes close. The remainder of the region’s advanced economies, such as South Korea and China, have invested less than 10 per cent of their nation’s annual production to address the crisis.

Although the unprecedented government interventions of the past 12 months are small compared with the response to the Asian and global financial crises of recent decades, it’s the quality or targeting — not the quantity — of public sector spending that determines outcomes. And the US efforts to date differ significantly from those in Asia Pacific precisely in the type of stimulus.

The recovery packages implemented in-region included substantial digital stimulus measures and came in multiple forms: direct public investment, government support for businesses, and temporary and permanent regulatory reforms.

For example, the Chinese government announced in March 2020 that it would spend US$1.4 trillion on its New Infrastructure plan. This included direct public investment in data centres and electric vehicle charging stations; accelerated rollout of the world’s largest 5G network; artificial intelligence (AI), and internet of things (IoT) solutions; and an expansion of ultra-high-voltage power grids. This package of general-purpose technology is three times the size of the country’s health and social welfare measures, which totalled a mere US$0.5 trillion.

In July, South Korea President Moon Jae-in announced the Korean New Deal totalling US$138 billion, one-third of which has been allocated to Digital New Deal projects that include building a nationwide 5G network and training 100,000 professionals in the application and use of AI.

Singapore allocated US$353 million — just under 0.5 per cent of the nation’s US$70 billion stimulus — directly to helping local businesses accelerate their digital transformation through the adoption of new technology.

So what about the US? Despite having already allocated US$3.4 trillion to the recovery, the American Rescue Plan Act will be the first package to explicitly include direct public investment in IT-related initiatives. But the inclusion of technology spending is where the similarity with our region ends.

Unlike the digital-first and emerging technology infrastructure initiatives of countries in Asia Pacific, the Biden administration’s plan devotes US$10.9 billion — 0.6 per cent of the total package — almost entirely to addressing technical debt or simply keeping the lights of existing systems on.

Of a total of 13 technology-related appropriations, the four largest fall under what Forrester calls IT MOOSE (maintain and operate the organisation, systems, and equipment). An appropriate level of IT MOOSE is essential to any organisation. But left unchecked over the years, IT MOOSE will consume ever larger shares of finite technology budgets.

This is the situation in which the Biden administration finds itself: forced to devote 94 per cent of all technology-related spending in the largest stimulus package ever passed by the US Congress not to transformational, nation-building efforts, but instead to fund support of current business operations and activities. This includes:

• US$7.2 billion for the Emergency Connectivity Fund to reimburse schools and libraries for addressing poor internet access and expanding the number of connected devices.

• US$1.5 billion to the Internal Revenue Service (IRS) for taxpayer assistance, including the cost of integrating, modernizing, and securing existing IRS systems.

• US$1 billion for the General Service Administration’s Technology Modernization Fund to address technical debt. This is almost five times the total amount of funding it has received since Congress established it in 2017.

• US$0.7 billion for the Cybersecurity and Infrastructure Security Agency to deal with the fallout from and remediation of the SolarWinds breach of US government networks.

Even though this additional spending represents a boost, it is just 0.9 per cent over Forrester’s existing forecast of US$1.2 trillion in MOOSE spending by business and government in the US for 2021. This is unlikely to have a measurable impact on the market, let alone fundamentally change the US digital landscape to enable future growth.

Is there hope? Yes. Individual government agencies receiving this funding can choose not to accept the status quo. Instead, they can look to the success of government efforts across the globe, including in Singapore, and tame the IT MOOSE now by transforming their existing IT operating models to one based on citizen centricity. In the process, they can create a contemporary IT backbone to make a digital revolution possible.

To understand how you can adopt a customer-obsessed operating model that will help you accelerate your digital future for a successful public service, download Forrester’s complimentary guide here.