progress on these questions and filled in a lot of the missing pieces of information.”
Looking to the future, he urged optimism on his listeners as “a good posture in general in research” while also presenting reasons for his own, personal optimism. Dr. Triplett, he reminded the audience, had described the history of research on computer prices—“the economist’s way of encompassing all these technical developments that we’ve been here to describe”—going back to the beginning of the computer’s commercial history in the 1950s. A set of measures for computers and peripherals, grounded in work that IBM researchers began publishing in the economics literature in the late 1960s, achieved incorporation into the U.S. national accounts for the first time in the mid-1980s and had continued in use, while also being enhanced and developed, to the present day. These measures had been extremely informative, especially in helping to understand the recent behavior of the economy.
Only the month before, Dr. Jorgenson said, Dr. Corrado had sent him the Federal Reserve Board of Governors’ first cut at a set of official statistics for telecommunications equipment, which had been intended to fill in what had up to then been “a ‘black hole’ in economic understanding.” Economists, for example, had not previously understood the role of DWDM, a very rapidly developing technology, but it had now been encompassed. While assuring the audience that the Board of Governors’ work would be enhanced and improved as better data became available, Dr. Jorgenson likened the effort to “the beginning draft of the human genome: It’s not the thing that you really wanted at the end of the day, but on the other hand it’s where you want to start.”
Finally, Dr. Jorgenson came to what he characterized as “the great challenge of software.” The software industry had been growing at more or less the same rate as the hardware industry since the beginning of the computer’s commercialization, he noted, but employment in the production of software had been growing about 10 times as fast. “There’s something there that we don’t fully understand,” he admitted, but he predicted: “The challenge of dealing with the issues having to do with software, although it lies ahead of us, will yield to methodologies similar to the ones that we were discussing today.”
Dr. Jorgenson again expressed his gratitude to all in attendance, and especially to the presenters and panelists, for taking part in what he called “this very fulsome discussion of a very important topic.” The STEP Board was planning more meetings in its series “Measuring and Sustaining the New Economy,” with the next one to focus on telecom, aided by the recent work of Dr. Corrado and her colleagues, and the one following that on software. Encouraging his listeners to “stay tuned,” Dr. Jorgenson said he looked forward to their participation in this continuing discussion.