The major benefits to the economy obtained at Level 3 are the coalescence of Level 1 and 2 elements. Skilled workers, a competence to understand the new technology, the availability of the technology, and shared goals are the ingredients required to create a healthy telecommunications industry and, more broadly, a capable telecommunications infrastructure.

Interestingly, not all of the research performed affects telecommunications alone. Because telecommunications touches multiple industries, the technology base it provides also often enables the creation of entirely new industries. The success of the iPod and other portable digital music players, for example, rests in part on earlier telecommunications-inspired work on how to compress audio for efficient transmission over limited-bandwidth channels.

At Level 4, an indirect benefit of research is a telecommunications infrastructure that provides advantages to all industries that use telecommunications. There are also end-user or consumer benefits that accrue to having an outstanding infrastructure, such as enhanced education, entertainment, and personal convenience. Finally, new companies also emerge from these new industries.

Level 5 aggregates the key benefits of research in broad areas of national concern. Concerning economic impact, the strong telecommunications industry, new spin-off industries, and more competitive industries (across the board) result in a higher GDP for the country, as well as job creation. Technological leadership and economic strength also help ensure strong leadership and capability in national defense and homeland security.

The full benefits of the process depicted in Figure 1.1 develop over an extended period of time, with a long-term buildup over several years between the seed investments in research and realization of the ultimate bottom-line benefits. Each step takes time: from innovation to mass deployment and impact. Investments by both government and industry in research by academia and industry lead to both short- and long-term contributions.

Over the years, CSTB studies have documented this phenomenon across multiple areas of information technology and telecommunications research. In particular, its 1995 report Evolving the High Performance Computing and Communications Initiative to Support the Nation’s Information Infrastructure9 and a 2003 update10 illustrate how long-term investments in research across academia and industry have led to the creation of many new, important U.S. industry segments with revenues that came to exceed $1 billion.

In closing, it is worth noting the perils of losing leadership in telecommunications. Because of the time lag, the nation may continue to exhibit leadership at Levels 4 and 5 (and possibly Level 3) even as it is failing to renew capability at Levels 1 and 2. Since Levels 3 through 5 are most visible to policy makers and the public, there is a potential to perceive the situation as less dire than it really is. If Levels 1 and 2 are left to atrophy, serious problems will occur at Levels 3 through 5. If that happens, then recovery will take a long time—or even prove impossible.


Computer Science and Telecommunications Board, National Research Council, Evolving the High Performance Computing and Communications Initiative to Support the Nation’s Information Infrastructure, National Academy Press, Washington, D.C., 1995.


Computer Science and Telecommunications Board, National Research Council, Innovation in Information Technology, The National Academies Press, Washington, D.C., 2003.

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