The committee then turned its attention to the evolution of major platforms (such as Web 2.0, open-source development, new mobile access devices, and services executing within Internet data centers) and to the evolution of the major component sectors of semiconductors, computers, and software. In technological terms, there were two extremely powerful major developments during the period of study: The first of these was the mass popularization of the Internet for purposes of business, uses as tools, and recreational use. The second was the rise of mobile telephony. Information technologies in this time period became ubiquitous. In purely technical terms, IT has permeated nearly every part of daily existence and knitted the world closer together. With this change came a globalization in which, for the first time in history, engineers even in developing nations became more capable of being integrated in the global economy. By discussing India and China—two growing, potential IT industry giants—in particular, the committee places the situation of the U.S. IT R&D ecosystem into a global context. Today, it is no longer possible to understand the health and competitiveness of an isolated U.S. IT R&D ecosystem; it is now necessary to place it in a global context.

Finally, the committee considered the multifaceted nature of IT innovation. IT innovation is no longer mainly supplier-driven. Increasingly, customers are creating value through application innovations. As these new applications and IT-enabled services grow in importance, IT workers will increasingly need more than just technology skills. They will need in-depth business- and market-related knowledge to leverage technology use and differentiate their products and services. For the United States to lead in this new environment, an appropriate network infrastructure is required: ubiquitous, higher-speed, and more-affordable broadband.

With that as background for understanding the current state of the U.S. IT R&D ecosystem, the next chapter argues that the changes since 1995 have resulted in a globalized and fast-changing R&D ecosystem. If the United States does not navigate successfully in this global environment, it will no longer enjoy a position at the center of technological change, one that it has enjoyed for the past decade or more.