Ballmer in Redmond Wednesday.

Speaking to technology chiefs from big public agencies today, Microsoft CEO Steve Ballmer said he believes continued investment in technology will be critical for jump-starting the economy after it goes through a "reset." He acknowledged investors' concerns about Microsoft's $9 billion research-and-development budget but reiterated that he considers the spending key for the company's long-term growth.

Read on for excerpts from his remarks ...

"Clearly, for all of us, in this country and around the world, the change in the economic environment is a Job One issue. It doesn't matter whether your field is finance or IT, the impact is profound. ... Essentially the economy is going to reset to a different level, and then again be propelled by what really should be, and typically are, the fundamental drivers of economic growth -- which are really productivity and innovation.

"Turns out if you start borrowing too much money, the big drivers of GDP can be productivity, innovation and leverage. I think for the foreseeable future, economic growth once we reset is really going to be propelled off of productivity and innovation. Particularly for this community, that's probably an important message, because the top driver of productivity gains in the U.S. economy has been investment in information technology. ...

"The opportunity to make a difference in productivity and innovation -- which will be the fundamental drivers of improvement in the economy -- I think are really quite, quite important. One of the things you stop and ask in this environment is will there be a slowdown in technology innovation? ... Will the pace at which new things come subside dramatically as companies and venture capital dries up, companies' money dries up? I think the answer to that question is, no, really not. There will undoubtedly be some innovations that would have been funded when there was more money in the economy. And yet the things which are really productive and really valuable and really make a difference, they'll either get funded at companies like ours and our competitors, they'll get funded by the venture-capital community. We may not get the eighth, ninth and tenth startup in every area, but we'll get the first four, five or six that make sense, and we'll get plenty of good competition. ...

"It has caused us to go through and really decide what's the right size for various projects. Not many of the projects that we were working on that were in market have come out of market, but there are some things that weren't bearing fruit that we've decided that we'll at least put on the back burner, if not get rid of. But at the end of the day, when I tell you the budget was over $9 billion and is going to remain over $9 billion, it speaks to this fundamental faith and belief and excitement that we have about the things technology will do, and we've got to be at that table."