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Barack Obama has announced the single largest new investment in the nation's infrastructure since the creation of the interstate highway system in the 1950s under Eisenhower. Speculation begins to build up about the precise nature of this investment.

I have been in Singapore for the last two weeks and have been observing how this tiny country has created a superbly modern infrastructure that flows seamlessly by leveraging technology and process automation.

From the minute I walked through immigration, I began noticing the country's well-conceived mechanisms for efficiency enhancement. Singapore residents have a special smart card that lets them clear immigration without human intervention. Taxis link up via transponders to a central system through which the country implements congestion control, including peak hour and business district surcharges.

As I have watched the city in motion during my stay, it has made me think about the possibilities for infrastructure modernization in the U.S., now that we're embarking on a new era. The problems--health care, energy, traffic congestion, education, poverty and security--each have major implications when you apply smart-card-based process control in the Singaporean way.

Dominique Trempont, former CEO of smart-card firm Gemplus Corp. (now part of Gemalto), believes that the U.S. should roll out one multi-application smart card to the entire population in order to automate various government and private-sector functions. "The card can be partitioned into application segments, and the companies rolling out applications on it can pay for the privilege," Trempont says.

The first application category for a smart card is a government-owned, centralized patient record database that then becomes the heart of the U.S. health care system. A patient goes to a new doctor, and the doctor's office can access the records with the card, without the hassle of gratuitous paperwork handling by multiple office administrators and frustration on the part of the patient. Insurance claims and processing could also be integrated with this central system, closing the loop with the doctor's office and the insurance company.

A second application category could belong in the realm of security and identity. Passports and driver's licenses could be implemented on the smart card: It can enable a smooth transition through immigration and other functions, such as traffic management. After all, why do we need cops to monitor whether drivers are staying within the speed limit? If there is scientific evidence that the most energy-efficient speed at which cars should be driven is 60 mph, then drivers should pay for driving above that speed limit. Fines can be automatically charged on a smart card. Congestion-control applications can also be implemented on the same infrastructure based on time, geographical zoning, vehicle type (with incentives for fuel-efficient cars and penalties for gas guzzlers), etc.

"Not only is a smart-card-based infrastructure great for efficiency enhancement, it can be a major revenue generator," Trempont says. No kidding! If every car that drives above 60 mph is charged a fine, and there were an efficient way of collecting congestion taxes, that revenue alone could be enough to finance the $136 billion that the nation's governors need for infrastructure projects related to roads, bridges and railway. It will also generate ongoing revenue for years to come that can pay for many more ambitious projects.

One of Yahoo Inc.'s largest shareholders, Ivory Investment Management LP, is urging the Internet company to pursue a sale of its search unit to Microsoft.

In a letter to the company's board, the investment firm proposed a deal Wednesday in which Microsoft (nasdaq: MSFT - news - people ) would acquire Yahoo (nasdaq: YHOO - news - people )'s search engine and Yahoo would retain 80 percent of revenue generated by search queries on its own site.

Ivory said Yahoo could get about $15 billion from Microsoft for the search platform alone, a deal it said would give shareholders a value of $24 to $29 per share, or more than double Yahoo stock's closing share price Tuesday of $12.19.

Yahoo shares rose 62 cents, 5.1 percent, to $12.81 in morning trading Wednesday.

Yahoo Chief Executive Jerry Yang said recently that he would resign, a response to shareholder discontent that brewed after Yahoo rebuffed a $47.5 billion takeover offer from Microsoft for the entire company. Before stepping down, Yang said he was still open to some kind of a deal with Microsoft, after antitrust concerns sank Yahoo's planned advertising partnership with Google Inc. (nasdaq: GOOG - news - people )

Microsoft CEO Steve Ballmer has said a takeover of Yahoo is off the table but has expressed interest in the company's search business.

In the letter Wednesday, Ivory took Yahoo's board to task for not seeking a deal with Microsoft more aggressively and accused the company of ignoring shareholder interests. The firm holds 21.4 million, or about 1.5 percent, of Yahoo's shares.

With sales slumping, Japanese company will cut 8,000 jobs in electronics division and slash investment.

Ministry of Finance allows NWF to invest half its portfolio in domestic funds.

Until the end of October, Russia's National Wealth Fund was invested solely in high-grade foreign government debt instruments. On Oct. 21, the Ministry of Finance released new guidelines on how the $76.4 billion fund should be invested, and allowed the NWF to invest up to half of its portfolio in domestic shares and investment funds.

New management. The changes signify a fundamental shift in the fund's investment strategy and underscore the priority the Kremlin places on bolstering domestic share prices, which have fallen by over 75% since May. While it is still unclear what the exact portfolio allocation of the NWF will be, investments into Russian securities have already begun:

-At the end of October, the NWF invested some $730 million into Russian equities.

--A further $180 million were invested in Russian corporate debt securities.

--The investments were made via state-controlled Vneshekombank (VEB), which currently acts as the NWF's agent in its domestic investments.

--It has not yet been revealed which companies the NWF invested in.

VEB representatives have also announced that the NWF has a further $5.5 billion on hand to invest in Russian shares. This corresponds to some 5% of the total market capitalization of the Russian equity market, meaning the NWF is in a position to significantly affect Russian share prices.

In my last column, I argued that all infrastructure investment is not the same. If we are to embark on massive investments to stimulate the economy, we should do so with an eye toward producing benefits in the long term. And I argued that education is one such investment.

This assertion generated a lot of pushback from people who feel passionately that any stimulus package should focus on creating jobs right now. Clearly that's important, but it is also not a long-term fix, particularly when the jobs to be created are not likely to be the high-quality, long-term career positions that make for a successful economy. From this perspective, investing in human capital is the way to go. This is not just opinion--there is a lot that we know about the returns to investing in human capital, and we know more and more all the time about which investments yield good returns.

The most essential reading on this topic is The Race Between Education and Technology, by Claudia Golden and Lawrence Katz. Goldin and Katz give a broad historical view of the role of education in economic growth in the U.S. They make the case that, after a century of leading the world in supplying the educated workers needed to serve technology, the U.S. has fallen behind in education. There is other important research by James Heckman of the University of Chicago and Arthur Rolnick of the Federal Reserve Bank of Minnesota on the returns to early childhood education.

Any discussion of investments in education with the goal of preparing the workforce of the future needs to begin in early childhood. In the first five years of life, children undergo tremendous development. If children receive support for growth in language, development of motor skills, social skills and emotional support, they are more likely to succeed in school subsequently and to later contribute to society. Absent that kind of early development, children are more likely to drop out of school, commit crimes and require support from the welfare system. These are the costs that society bears.

Estimates are that early childhood education programs that are focused on children at risk produce returns of as much as 7%-16%, a large portion of which are social returns. This is a good investment. Some of these returns will be lost if the K-12 education system is broken and some of the disappointing results on the benefits of Head Start programs are due to deficiencies in the school systems that the children encounter subsequently. Clearly more has to be done at this level.

Education, as we all know, is a cumulative process. Thus, calling for a highly educated workforce implies, almost by definition, that individuals receive both early childhood development and a solid education from kindergarten on up. Programs like Head Start are important, but without a strong K-12 education that builds upon those accomplishments, students will not be ready to move on to college education.

Unfortunately, as Goldin and Katz document, we have faltered--and even fallen behind--in K-12 education by many measures. One example is that the secondary school graduation rate has declined significantly in the last 25 years.