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II PROCEEDINGS

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Introduction Dale W. Jorgenson Harvard University Dr. Jorgenson welcomed the audience to the fifth in a series of symposia sponsored by the National Research Council's Board on Science, Technology, and Economic Policy (STEP) and devoted to the theme "Measuring and Sustaining the New Economy." To counter the view that the New Economy had "disappeared in the year 2000," he pointed out that recent figures indicated that, since the end of the previous recession in 2001, productivity growth had been running about two-tenths of a percentage point higher than in any recovery of the post-World War II period. He therefore applied the label "alive and well" to the New Economy, which, he noted, STEP had been tracking almost from the time the phenomenon was recognized in the policy community. Reviewing STEP's previous symposia on the New Economy, Dr. Jorgenson recalled that the first had taken place in the year 2000 and had resulted in the publication of Measuring and Sustaining the New Economy. The thesis of that book--which, he said, still held up very well--was that technology is the main source of the development denoted by the term "New Economy," and that the key technologies center on semiconductors. The second symposium, addressing semi- conductors specifically, dealt with speed at which semiconductor technology develops, which is described by Moore's Law. That topic is critical to tele- communications technology, the focus of the current symposium, just as it is to the development of technologies related to computing. 29

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30 THE TELECOMMUNICATIONS CHALLENGE The subject of the third symposium in the series, which was held about a year after that on semiconductors and for which a report was yet to be published, was computers. According to the future it sketched out for Moore's Law, the acceler- ated pace of development of semiconductor technology that started in the mid- 1990s was to continue; and, in fact, the rate of progress between that meeting and the present had proved this expectation correct. Addressing those in the audience who tracked semiconductor technology, Dr. Jorgenson observed that Robert Doering of Texas Instruments and other leading authorities in the field had projected semiconductor development to continue at that accelerated pace for at least another decade or so, something of extreme relevance to the day's topic. The fourth symposium of the series, held in February 2004, examined developments in software technology, which he described as a "much less tractable topic." STEP will publish a report on that meeting as well. THE NEW ECONOMY: A COMPREHENSIVE PICTURE Taken together, the work sponsored by STEP under the rubric Measuring and Sustaining the New Economy--examining the specifics of semiconductor technology, the base technology driving the pace of technological development; computing; software; and, at the current meeting, telecommunications--has produced the most detailed and comprehensive picture available to date of what is known as the New Economy. And true to the components of STEP's name, this study had encompassed economics, about which a great deal had been learned in its course, as well as technology, which had been the focus of much of the deliberation. Turning to policy, Dr. Jorgenson raised the issue of which policies condition the speed at which new technologies are adopted as they became available. This is particularly germane to telecommunications, which is regulated not only at the federal level, a subject to be addressed shortly by Peter Tenhula of the Federal Communications Commission, but also at the state level. And, in addition to the involvement of many different regulatory bodies, there is that of Congress, which has passed major legislation, and the courts, which have always been the arena of last resort. So STEP--the Board on Science, Technology, and Economic Policy-- was bringing all three together in the day's symposium. Thanking Dr. Charles Wessner of the STEP staff and Dr. Bill Raduchel, a member of the Board, for organizing the symposium, Dr. Jorgenson turned the floor over to the latter, the subject of whose talk was the end of stovepiping.