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- Ed Lazowska
- IT & Public Policy
- Autumn 2004
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- Every major $1B IT sub-sector bears the stamp of federal research
funding
- Every sub-sector shows a rich interplay between university and industry
- It’s not a “pipeline” – there’s lots of “back-and-forth”
- It typically takes 10-15 years from idea to $1B industry
- There are many research interactions across sub-fields
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- Unanticipated results are often as important as anticipated results
- It’s hard to predict the next “big hit”
- Research puts ideas in the storehouse for later use
- University research trains people
- University and industry research tend to be complementary
- Visionary and flexible program managers have played a critical role
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- The Internet
- Bob Kahn at DARPA
- Impact of AI
- Technologies employed in e-commerce
- Time sharing -> email and instant messaging
- Tire Tracks 1995 vs. 2003
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- The key role of research institutions in high tech success
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- The special role of universities
- The nature of industry R&D in IT (mostly D!)
- Federal science agency evolution since 1945
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- Federal research budget trends
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- Recap of science support issues:
- About $55B of the nation’s $2,319B budget goes to basic and applied
research
- More than half of this goes to the life sciences (IT is less than 4%)
- IT research funding is actually decreasing
- More than 80% of the employment growth in all of S&T in the next
decade will be in IT – and more than 70% of all job openings (including
those due to retirements)
- Recent news provides little encouragement!
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- Most of the budget is mandatory
- Half of what’s discretionary is defense
- The rest involves dozens of agencies
- They are grouped irrationally, and tradeoffs must be made within those
groups
- “Balancing the budget” is a foreign concept
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- “Advances in information technology are changing our lives, driving our
economy, and transforming the conduct of science.”
- Computing Research Association
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- In the US, our wages are high, so our productivity needs to be high, or
we’re SOL
- A US worker who is twice as productive can compete with a foreign
worker who makes half as much
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- We all “believe” that IT increases productivity
- There have been continuous investments in the application of IT for more
than 40 years
- But there were at most very modest signs of any increase in
organizational productivity from 1975-1995
- “Computers show up everywhere except in the productivity statistics”
- – Robert Solow, Nobel prize winning Economist, 1987
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- A huge surge in economic growth, driven by dramatic increases in
productivity (double the average pace of the preceding 25 years),
attributed almost entirely to IT!
- “We are now living through a pivotal period in American economic history
… It is the growing use of information technology that makes the current
period unique.”
- Alan Greenspan, Chairman of the Fed, 2000
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- Not clear the economic data was capturing the right things
- Also, it was measuring entire industries, not individual firms
(accounting for quality differences)
- Changes in processes, stimulated by changes in technology, take time to
show impact
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- “We have completed our program of attributing US economic growth to its
sources at the industry level. … Our first conclusion is that many of
the concepts used in earlier industry-level growth accounting should be
replaced … investments in information technology and higher education
stand out as the most important sources of growth at both industry and
economy-wide levels … the restructuring of the American economy in
response to the progress of information technology has been massive and
continuous …”
- Dale W. Jorgenson, Harvard, Mun S. Ho, Resources for the Future, and
Kevin J. Stiroh, Federal Reserve Bank of NY, “Growth of US Industries
and Investments in Information Technology and Higher Education”
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Notes
