conductor product goes to work in information technology, a segment of unusual value. IT, he said, represents about 8 percent of the U.S. economy but nearly 40 percent of the growth in the economy. Information technology is also a deflator, reducing inflation by 0.5 to 1 percent per year and increasing productivity by a point to a point-and-a-half per year.30 Because these are major contributions to the economy, he said, we have the responsibility to “keep this thing going” in order to maintain the growth of the global economy.
A fact of great importance, he said, is that the number of transistors produced each year increases by about 55 percent. This year  the industry will make roughly 40 million transistors for every man, woman, and child on Earth; by 2008 the per-person figure will rise to about 1 billion transistors. This, he said, implies a “major, major transition” that will require significant preparatory steps. One step is to decide whether current industry structures work well enough.
He offered the example of the SRC, the Semiconductor Research Corporation, as a structure that does work well. It was founded in 1982 for two major reasons. The first reason was concern about the insufficient number of engineers coming out of colleges. The second reason was that not enough engineers were being trained in the new solid-state technology. Since then SRC has helped to increase the number of engineering graduates and to enhance technology training.
It has also created an “integrated, virtual semiconductor research laboratory” that funds projects at about 65 universities across the country. One goal has been to find the best principal investigators from any part of society, not just at the major universities. SRC now supports about 275 faculty members and over 800 graduate students, creating a pattern of broad participation that could be imitated in other countries. He advocated extending the SRC model to other associations around the world as a means of both increasing funding and encouraging even broader participation. The current funding level is about $35 million per year without restrictions on the kind of work or the nationality of the students funded. The outcomes of the research are available to all users without restriction.
Another important accomplishment in which SRC has participated, along with the SIA and SEMATECH, is production of the semiconductor roadmap,
Dale Jorgenson has asserted that the decline in prices of IT equipment, and thus the subsequent large-scale investment in IT, has played a major role in the economic growth of the 1990s. Jorgenson states that “a consensus is building that the remarkable behavior of IT prices provides the key to the surge in economic growth.” In particular Jorgenson attributes the “development and deployment” of the semiconductor in different industries as the engine for this surge in productivity. For in-depth analysis of his research on semiconductors and economic growth see Dale W. Jorgenson. “Information Technology and the U.S. Economy.” The American Economic Review, March 2001.