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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment 2 Information Technology: The Essential Enabler for the Information Society THE IMPORTANCE OF INFORMATION TECHNOLOGY The economic contributions of information technology (IT) are not in question. Put simply, IT is the enabling technology of the 21st century. The effective use of IT is now recognized as a major component of economic growth and innovation in other areas of society and the economy. As the President’s Council of Advisors on Science and Technology acknowledged in its 2007 assessment of the federal networking and IT research and development (R&D) program: IT leadership is essential to U.S. economic prosperity, security, and quality of life…. It is difficult to overstate the contribution of [networking and information technology] to America’s security, economy, and quality of life…. The cumulative effect of these technologies on life in the United States and around the world has been profound and beneficial.1 Since 1995, the networking and information technology industries have accounted for 25 percent of U.S. economic growth, measured as real change in gross domestic product (GDP), despite representing only 3 percent of GDP.2 1 President’s Council of Advisors on Science and Technology, Leadership Under Challenge: Information Technology R&D in a Competitive World, Executive Office of the President, Washington, D.C., August 2007, pp. 1, 5. 2 Ibid., p. 9, citing National Research Council, Enhancing Productivity Growth in the Information Age: Measuring and Sustaining the New Economy, The National Academies Press, Washington, D.C., 2007.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment Advances in IT and its effective use can be expected to continue to drive economic and social gains and are key to future innovation and growth. IT is diffused throughout the economy: it is critical to or supports production in all sectors. IT underpins all fields of scientific and engineering endeavor—from basic and applied research to product development, sales, and distribution (see also the discussion of pervasive IT in Chapter 3). The Economic Case: The Contributions of IT to the Economy Although economists had debated the exact nature of its impact, the permanent, positive contribution of IT to economic output and growth is now unquestioned.3 Previous difficulties in capturing the impact of IT in the national income and product accounts had been expressed in Nobel Prize-winning economist Robert M. Solow’s often-quoted statement in 1987: “You can see the computer age everywhere but in the productivity statistics.”4 In economics circles, this was known as the Solow productivity paradox. However, improvements in how the national income and product accounts are constructed have convincingly revealed IT’s fundamental contributions to output and growth.5 The paradox is resolved. In the past decade, worker productivity increased dramatically owing to investments in information technology and, perhaps more importantly, to the effective use of that technology by firms.6 Jorgenson points out that “the development and deployment of Information Technology is the 3 For a resolution to the economic debate about whether the effect of IT was a positive but temporary “shock” to the economy or a permanent improvement, see Dale W. Jorgenson, “Information Technology and the U.S. Economy” (President’s Address to the American Economic Association, January 6, 2001), American Economic Review 91(1):1-32, March 2001. See also the statement by Alan Greenspan, Chairman, Board of Governors of the Federal Reserve System, before the Joint Economic Committee, U.S. Congress, June 14, 1999: “Innovations in information technology—so-called IT—have begun to alter the manner in which we do business and create value, often in ways that were not readily foreseeable even five years ago.” See http://findarticles.com/p/articles/mi_m4126/is_8_85/ai_55671973; accessed March 24, 2008. 4 Robert M. Solow, “We Had Better Watch Out,” New York Review of Books, July 12, 1987. 5 These improvements began with a revision in 1999 that started treating software expenditures as an investment rather than as an expense to be written off against current income. See Dale W. Jorgenson, Mun S. Ho, and Kevin J. Stiroh, Information Technology and the American Growth Resurgence, MIT Press, Cambridge, Mass., 2005. 6 Jason Dedrick, Vijay Gurbaxani, and Kenneth Kraemer, “Information Technology and Economic Performance: A Critical Review of the Empirical Evidence,” ACM Computing Surveys 35(1):1-28, March 2003.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment foundation of the American growth resurgence.”7 His capital-investment/capital-services analysis starts with the technology-driven pattern of relative decreases in quality-adjusted semiconductor prices over time. The precipitous fall in semiconductor prices flows through to falling prices for computers, software, communications equipment, and IT services, which in turn reduce the cost of all kinds of sophisticated products, from aircraft to automobiles. Jorgenson also notes the pervasive nature of IT and that the impacts of IT investments are broadly felt throughout the economy, “altering product markets and business organizations.”8 Yet the impact of information technology goes well beyond its yielding of cost reductions in traditional products and productivity gains in the services sector. IT intersects with other sectors and disciplines and is no longer so self-contained: it is pervasive. According to Apte and Nath, “information workers” now account for as much as 70 percent of the U.S. labor force and contribute over 60 percent of the total value added in the U.S. economy.9 Information “processing” by workers represents a growing component of the GDP, and it is predicated upon information technology. For example, financial analysts use search engines and databases to collect information about investments, retrieve it for analysis with spreadsheets and other modeling tools, and communicate their results to other workers by way of electronic mail and Web sites. At the firm level, integrated supply chain management allows greater communication and coordination between customers and their suppliers, enabling the former to find the lowest-cost supplies subject to delivery constraints, reduce their inventories, and increase their overall production efficiency. These capabilities yield direct benefits to consumers, and not simply in terms of reduced costs. For example, it is now possible for a consumer to purchase a custom-built vehicle with specified color, trim, and other options, and to track its progress through production to dealer delivery. Brynjolfsson offers an interesting comparison between two major retailers in their use of IT.10 By investing in more IT per worker, one of these competitors has also enabled a more decentralized decision-making process, pushing purchasing decisions to lower-level workers. This com- 7 Dale W. Jorgensen, “Information Technology and the U.S. Economy,” American Economic Review 91(1):1-32, March 2001. 8 Ibid. 9 U. Apte and H. Nath, “Size, Structure, and Growth of the U.S. Economy,” Center for Management in the Information Economy, Business and Information Technology (BIT) Working Paper, December 2004, available at http://www.anderson.ucla.edu/documents/areas/ctr/bit/ApteNath.pdf; accessed October 28, 2008. 10 Erik Brynjolfsson, “The IT Productivity GAP,” Optimize, Issue 21, July 2003, available at http://ebusiness.mit.edu/erik/Optimize/pr_roi.html; accessed October 28, 2008.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment bination of technology and business process has contributed to higher levels of productivity and business value for that firm. Brynjolfsson also observes that from 1995 to 2005, productivity in the U.S. economy grew by more than 3 percent per year, essentially twice the rate of the preceding 20 years. This growth rate persisted through the recession of the latter part of this period, when productivity grew at the impressive—and counterintuitive—rate of 4.8 percent. Brynjolfsson attributes this remarkable productivity growth to the investments in ever-improving information technology by firms.11 Furthermore, it is not simply the size of the IT investment, but the way that the technology is used to affect the organization of work that is important for realizing productivity increases. One dollar spent on IT equipment yields $9 in intangible assets. For example, computerized business processes yield more and better data that in turn can be mined for analysis and to support decision making. An example is online customer support that yields valuable information about customer needs that in turn can lead to insights into the kinds of new products to develop. Thus, not only does IT have an impact on the economy in terms of the value of information technology goods sold, but it has a multiplicative effect on the efficiency and quality of economic activity. And as Brynjolfsson also argues, the effective use of IT places high demands on the capabilities of the workforce. There is a strong correlation between those firms that are the most productive users of IT and those that place a high value on skilled workers, managers, and professionals, that is, on human capital.12 Data from the U.S. Department of Labor’s Bureau of Labor Statistics consistently rank information technology professions such as software engineer and systems administrator among those for which employment is projected to grow the fastest from 2006 to 2016.13 Undoubtedly IT will continue to be a growing contributor to GDP, but it takes time to reap its benefits in terms of products and organizations. Brynjolfsson points out that investment in IT by U.S. firms fell during the period of the recession of the early 2000s; this decline has implications for the nation’s ability to sustain productivity growth into the future. The benefits of IT are not evenly distributed. For example, inequality among workers will increase as some kinds of work are replaced by machines and virtually all occupations demand enhanced information skills. Economic turbulence will grow as industries undergo fundamental 11 Ibid. 12 Ibid. 13 U.S. Department of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook: Tomorrow’s Jobs, Washington, D.C., available at http://www.bls.gov/oco/oco2003.htm; accessed August 21, 2007.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment changes in response to new information technologies. For example, as new entrants such as localized classified-advertisement Web sites, numerous national and local job-search and real estate Web sites, and online auctions have displaced traditional newspaper classified advertising, newspapers have sought new revenue sources, including their own online offerings. Information technology may be the strategic differentiator that allows some firms and industries to survive while others inexorably decline.14 IT allows greater efficiency and sparks creative destruction in certain sectors (as, for example, the replacement of classified advertising by craigslist, a set of Web sites containing classified advertisements). Even more important, however, is that IT has created entirely new products and markets that have kept the U.S. economy growing. Much of this growth was achieved through an increase in exports as the impact of IT became felt globally and U.S. companies (in the IT sector in particular) took advantage of new international market opportunities, both in emerging and developed economies around the globe. Information Technology, Services, and the Post-Scientific Society Jorgenson, Ho, and Stiroh found that during the latter half of the 20th century, more than 80 percent of U.S. economic growth was driven by input growth—that is, investments in capital and human capital. Growth in total factor productivity (a measure that includes the contribution of purchased inputs—namely, goods and services—as well as capital and labor inputs) accounted for only about 20 percent of U.S. economic growth.15 However, during the 1995-2000 boom period, labor productivity growth accelerated; even as IT investments slowed after 2000, labor productivity growth continued to increase even more rapidly through 2005.16 Jorgenson and coauthors traced this acceleration in labor productivity growth to a sharp rise in productivity growth in IT-intensive industries, principally in services, finding that the locus of innovation had shifted from IT-producing industries in manufacturing to IT-using industries in trade and services.17 The committee that authored the National Research Council’s (NRC’s) 14 Erik Brynjolfsson, Massachusetts Institute of Technology, “Information Technology and the Economy: Where Are We and Where Do We Go from Here?,” workshop presentation to the committee, Boston, Mass., April 19, 2007. 15 Dale W. Jorgenson, Mun S. Ho, and Kevin J. Stiroh, Information Technology and the American Growth Resurgence, MIT Press, Cambridge, Mass., 2005. 16 Ibid. 17 Dale W. Jorgenson, Mun S. Ho, Jon D. Samuels, and Kevin J. Stiroh, “Industry Origins of the American Productivity Resurgence,” Economic Systems Research 19(3):229-252, September 2007.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment 2007 report Enhancing Productivity Growth in the Information Age: Measuring and Sustaining the New Economy found that new information technologies have a broad and positive impact on U.S. productivity growth through industries that produce new information technologies and the many more that apply them. New IT applications are also contributing to enhanced workplace productivity as a wide variety of firms adapt to changes in information flows and take advantage of new organizational structures made possible by these innovations…. These developments are changing the structure of firms, creating more innovative and more agile enterprises, with positive indirect and long-term implications for productivity growth….18 That committee also identified IT as foundational for the structural change to a more services-based economy: A structural change most associated with the New Economy today is the transformation of the Internet from a communication [medium] to a platform for service delivery…. This has contributed to the remarkable growth of the U.S. service economy, as companies like Google and eBay increasingly exploit information services in new ways. As new business models, enabled by the Web, continue to emerge, they will contribute to sustaining the productivity growth of U.S. economy.19 Another interpretation of this “New Economy” structural change is that the country is moving to a “post-scientific” society. Christopher T. Hill describes the United States during the last half of the 20th century as (broadly speaking) a “scientific” society, in which deep understanding of scientific principles was sought as the basis for technological progress. During this period, U.S. leadership in the scientific and technological underpinnings and applications of IT led to U.S. economic leadership in IT and contributed to productivity growth and market development in other sectors as well. But now, he argues, the United States may be well on its way to being a post-scientific society, in which market leadership and the creation of wealth depend less on scientific and technological fundamentals and more on integrating these creatively with a knowledge of organizations, business processes, and markets: In the post-scientific society, the creation of wealth and jobs based on innovation and new ideas will tend to draw less on the natural sciences and engineering and more on the organizational and social sciences, on the arts, on new business processes, and on meeting consumer needs based on niche production of specialized products and services in which 18 National Research Council, Enhancing Productivity Growth in the Information Age: Measuring and Sustaining the New Economy, The National Academies Press, Washington, D.C., 2007, p. 20 [citations deleted from extract]. 19 Ibid., pp. 22-23 [citation deleted from extract].
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment interesting design and appeal to individual tastes matter more than low cost or radical new technologies. Businesses will not succeed in the post-scientific society by adopting a fast-follower strategy, seeking to emulate the products first brought to market by firms in other countries. Rather, success will arise in part from the disciplined search for useful new knowledge that, regardless of its origins, can be integrated with intimate knowledge of cultures and consumer preferences. Networks of highly creative individuals and collaborating firms will devise and produce complex new systems that meet human needs in unexpectedly new and responsive ways.20 Already today, IT products and services rely on sophisticated memory, computing, and communications infrastructures with fundamental science and technology underpinnings—these will always be important. However, the value added and wealth generation are accruing most where there is less competition—at the top, at the user- or customer-facing levels, where a knowledge of customers and business processes is not a commodity. 21 Thus, the economic landscape is clearly one in which the productivity drivers are all complementary to and/or built on top of IT. Innovation in IT includes foundational work in the underlying technologies as well as innovation in IT-intensive and IT-enabled goods and, increasingly, services. The Scientific Case: A Fundamental Infrastructure for All Science and Technology It is generally acknowledged that the third leg of scientific investigation, joining theory and experiment, is computation. For example, computer models, describing the quantum mechanical behavior at the atomic and molecular levels, allow scientists to simulate physical systems in detail, to understand physical phenomena better than is possible by theory or experimentation alone. Computer imaging, such as computed axial tomography (CAT) scans, has become vital in the biosciences and medicine. Computational science models physical systems by large numbers of equations in many variables. The dynamics of a physical system, such as a chemical reaction, requires the solution of these equations over the time domain with a very high degree of accuracy. The field makes use of numerical algorithms and their analysis to ensure that accurate results 20 Christopher T. Hill, “The Post-Scientific Society,” Issues in Science and Technology, Fall 2007, available at http://www.issues.org/24.1/c_hill.html; accessed December 3, 2007. 21 Ibid.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment are achieved as rapidly as possible. Techniques include finite-element methods, fast Fourier transforms, Monte Carlo simulations, multigrid methods, methods for sparse problems, randomized algorithms, deterministic sampling strategies, and average case analysis. Because the kinds of problems tackled by computational scientists are so large and complex, algorithm designers have learned to exploit parallel computer architectures so that the systems that they wish to study can be modeled in a reasonable amount of time. Computational science problems have traditionally driven the highest performance envelope of computing, from vector supercomputers to very large clusters of computers. As computers become faster, larger and more-complex and fine-grained models are generated for the computers’ increased capabilities for prediction and design. At the same time, experimental and computational sciences are generating massive amounts of data, straining the capacities of even the largest supercomputer systems. The most pressing problems to be solved by computational science are commonly known as Grand Challenges. In 1995, the National Research Council produced a report entitled Evolving the High Performance Computing and Communications Initiative to Support the Nation’s Information Infrastructure (commonly referred to as the Brooks-Sutherland report, after its co-chairs Frederick P. Brooks, Jr., and Ivan E. Sutherland) that defined a new set of scientific and societal Grand Challenges.22 It identified progress in solving scientific Grand Challenges in such disciplines as cosmology, molecular biology, chemistry, and materials science. In 2005, the NRC report Getting Up to Speed: The Future of Supercomputing identified a dozen “compelling applications” for supercomputing. These ranged from military applications (such as stewardship of the nuclear weapons stockpile) to those enabling advances in science and engineering (for example, climate prediction, predicting and mitigating the effects of earthquakes), and transportation (for example, improving vehicle dynamics, fuel consumption, comfort, and safety).23 In 2003, the U.S. government’s Networking and Information Technology R&D (NITRD) program identified 16 illustrative problems that simultaneously challenge our computational capabilities and would represent significant benefits to society if they could be solved accurately and quickly: 22 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. 23 National Research Council, Getting Up to Speed: The Future of Supercomputing, The National Academies Press, Washington, D.C., 2005, Ch. 4.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment Knowledge environments for science and engineering, Clean energy production through improved combustion, High-confidence infrastructure control systems, Improved patient safety and health quality, Informed strategic planning for long-term regional climate change, Nanoscale science and technology (explore and exploit the behavior of ensembles of atoms and molecules), Predicting pathways and health effects of pollutants, Real-time detection, assessment, and response to natural or manmade threats, Safer, more secure, more efficient, higher-capacity, multi-modal transportation system, Anticipate consequences of universal participation in a digital society, Collaborative intelligence (integrating humans with intelligent technologies), Generating insights from information at your fingertips, Managing knowledge-intensive dynamic systems, Rapidly acquiring proficiency in natural languages, SimUniverse (learning by exploring), and Virtual lifetime tutor for all. 24 These challenge problems were selected for the way that they support six national priorities, as identified by the science and technology agencies of the U.S. government: leadership in science and technology, national and homeland security, health and environment, economic prosperity, a well-educated populace, and a vibrant civil society. Information technology plays a foundational role in achieving each of these priorities. The list of illustrative challenges is not expressed directly in terms of trillions of operations per second, petabytes of storage, terabits of network bandwidth, or gigapixels of display. Nevertheless, each depends on enormous advances in computation, storage, communications, and displays for its effective solution. Beyond more powerful computers and networks, NITRD identified the difficult computer technology components—the so-called IT Hard Problems—that require significant advancement in order to construct effective information-technology-based solutions to these societal challenges: new algorithms and capabilities for constructing applications, technologies to support complex heterogeneous systems, more capable hardware technologies, techniques and architectures to achieve high confidence in information technology systems, the architec- 24 See Networking and Information Technology Research and Development, Grand Challenges: Science, Engineering, and Societal Advances Requiring Networking and Information Technology Research and Development, Interagency Working Group on Information Technology Research and Development, available at http://www.nitrd.gov/pubs/200311_grand_challenges.pdf; accessed October 28, 2008.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment ture of high-end computing systems, information technology for human augmentation, information management, intelligent systems, methodologies and frameworks for IT system design, techniques to improve IT usability, the development of a highly capable IT workforce, technologies to improve the management of IT, high-performance and ubiquitous network technology and architecture, and more capable software technologies for rapid system design and implementation. Clearly, information technology is the essential fuel that will propel the knowledge-based society of the 21st century. RESULTS AND IMPACT OF INFORMATION TECHNOLOGY R&D Advances in information technology and its applications represent the signal success of U.S. scientific, engineering, business, and governmental communities in the past 50 years. Information technology has transformed, and continues to transform, all aspects of our lives: commerce, education, employment, health care, manufacturing, government, national security, communications, entertainment, science, and engineering. Information technology also drives the economy—both directly (the IT sector itself) and indirectly (other sectors that are “powered” by advances in IT).25 To appreciate the magnitude and breadth of these impacts, imagine spending a day without IT. This would be a day without the Internet and all that it enables. A day without diagnostic medical imaging. A day during which automobiles lacked electronic ignition, antilock brakes, and electronic stability control. A day without digital media—without wireless telephones, high-definition televisions, MP3 (MPEG-1 Audio Layer 3) audio, DVD video, computer animation, and videogames. A day during which aircraft could not fly, travelers had to navigate without benefit of the Global Positioning System, weather forecasters had no models, banks and merchants could not transfer funds electronically, factory automation ceased to function, and the U.S. military lacked technological supremacy. It would be, for most people in the United States and the rest of the developed world, a “day the Earth stood still.” Leadership in information technology is vital to our nation. For this reason, it is not surprising that the NRC’s Computer Science and Tele- 25 Analysis suggests that the remarkable growth experienced in the United States between 1995 and 2000 was spurred by an increase in productivity enabled almost completely by factors related to information technology: IT drove the U.S. “productivity revival” during the 1995-2000 period as compared with the 1973-1995 period. See Dale W. Jorgenson, Mun S. Ho, and Kevin Stiroh, “Projecting Productivity Growth: Lessons from the U.S. Growth Resurgence,” presentation to the Board of Trustees, Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, Washington, D.C., November 7, 2002.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment communications Board (CSTB) has frequently been asked to study various aspects of the IT innovation ecosystem. The 1995 report Evolving the High Performance Computing and Communications Initiative to Support the Nation’s Information Infrastructure26 explored these impacts and originated the subsequently often-reproduced “tire tracks” figure (so called because of its appearance) that illustrated some of the many cases in which fundamental research in information technology, conducted in industry and universities, led to entirely new product categories that became billion-dollar industries 10 to 15 years later. The tire tracks figure also illustrated the complex interplay between industry, universities, and government—the flow of ideas and people—and the interdependencies of research advances in various subfields: there is a complex research ecology at work, in which concurrent advances in multiple subfields are mutually reinforcing, stimulating, and enabling one another. In 2003, the CSTB report Innovation in Information Technology27 distilled the lessons from eight prior CSTB studies28 and summarized the nature of innovation in information technology as understood circa 2003 (see Box 2.1). That report’s update of the original tire tracks figure is reproduced as Figure 2.1 in this chapter. Interestingly, during the preparation of the first version of Figure 2.1, in 1994, members of the authoring committee were discouraged because they could not identify current research advances that were likely to lead to new billion-dollar industries. Eight years later, when the second version of the figure was being prepared, more than half a dozen such 26 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. 27 National Research Council, Innovation in Information Technology, The National Academies Press, Washington, D.C., 2003. 28 The eight CSTB studies, arranged here chronologically, are these: • Computing the Future: A Broader Agenda for Computer Science and Engineering (1992); • Academic Careers for Experimental Computer Scientists and Engineers (1994); • Evolving the High Performance Computing and Communications Initiative to Support the Nation’s Information Infrastructure (1995); • More Than Screen Deep: Toward Every-Citizen Interfaces to the Nation’s Information Infrastructure (1997); • Funding a Revolution: Government Support for Computing Research (1999); • Making IT Better: Expanding Information Technology Research to Meet Society’s Needs (2000); • Building a Workforce for the Information Economy (2001); and • Embedded, Everywhere: A Research Agenda for Networked Systems of Embedded Computers (2001). These National Research Council reports were published by the National Academy Press (The National Academies Press as of June 2003), Washington, D.C.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment BOX 2.1 Important Themes from the Computer Science and Telecommunications Board’s Studies of Innovation in Information Technology A 2003 report of the National Research Council’s Computer Science and Telecommunications Board, Innovation in Information Technology, distilled lessons about the nature of research in information technology—including the unpredictability of and synergy among research results; the roles of government, industry, and academia; and the social returns from research. The 2003 report summarized these as follows: The results of research America’s international leadership in IT—leadership that is vital to the nation—springs from a deep tradition of research…. The unanticipated results of research are often as important as the anticipated results—for example, electronic mail and instant messaging were by-products of research in the 1960s that was aimed at making it possible to share expensive computing resources among multiple simultaneous interactive users…. The interaction of research ideas multiplies their impact—for example, concurrent research programs targeted at integrated circuit design, computer graphics, networking, and workstation-based computing strongly reinforced and amplified one another…. Research as a partnership The success of the IT research enterprise reflects a complex partnership among government, industry, and universities…. The federal government has had and will continue to have an essential role in sponsoring fundamental research in IT—largely university-based—because it does what industry does not and cannot do…. Industrial and governmental investments in research reflect different motivations, resulting in differences in style, focus, and time horizon…. Companies have little incentive to invest significantly in activities whose benefits will spread quickly to their rivals…. Fundamental research often falls into this category. By contrast, the vast majority of corporate research and development (R&D) addresses product and process development…. Government funding for research has leveraged the effective decision making of visionary program managers and program office directors from the research community, empowering them to take risks in designing programs and selecting grantees…. Government sponsorship of research especially in universities also helps to develop the IT talent used by industry, universities, and other parts of the economy…. The economic payoff of research Past returns on federal investments in IT research have been extraordinary for both U.S. society and the U.S. economy…. The transformative effects of IT grow as innovations build on one another and as user know-how compounds. Priming that pump for tomorrow is today’s challenge. When companies create products using the ideas and workforce that result from federally sponsored research, they repay the nation in jobs, tax revenues, productivity increases, and world leadership…. SOURCE: National Research Council, Innovation in Information Technology, The National Academies Press, Washington, D.C., 2003, pp. 2-4.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment FIGURE 2.1 The updated “tire tracks” diagram originally published in a 1995 report of the National Research Council to provide examples of government-sponsored information technology research and development in the creation of commercial products and industries.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment SOURCE: Reprinted from National Research Council, Innovation in Information Technology, The National Academies Press, Washington, D.C., 2003. Updated and adapted from figure originally published in 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.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment industries had emerged, which demonstrates that predicting the future in a field as dynamic as information technology is incredibly difficult, even for experts. INFORMATION TECHNOLOGY RESEARCH—THE BOUNDLESS FRONTIER The advances of information technology over the past 50 years have been truly breathtaking. However, the field remains in its relative infancy, and there is every reason to believe that the best is yet to come—if we take steps to preserve and enhance critical elements of the IT innovation ecosystem.29 This section highlights just a few examples of the impacts that can be anticipated from advances in information technology during the coming decades. Improved Auto Safety In the Defense Advanced Research Projects Agency’s (DARPA’s) Grand Challenge in 2005, four cars successfully negotiated autonomously a difficult, 103-mile obstacle course in the Mojave Desert. In DARPA’s 2007 Urban Challenge, autonomous vehicles performed such maneuvers as merging, passing, negotiating intersections, and parking in a simulated urban environment at the former George Air Force Base in California. These milestones reflect advances in robotics which indicate that it is time to launch a program to create “cars that cannot crash.” In the United States alone, automobile accidents cost roughly 40,000 lives and $250 billion each year.30 It is reasonable to believe that within a decade, tens of thousands of lives, hundreds of thousands of injuries, and tens of billions of dollars could be saved annually, while giving U.S. products a sizable competitive advantage in the $1 trillion worldwide automotive market. Designing a Next Internet In 2005, Vinton G. Cerf and Robert E. Kahn received computing’s highest prize, the A.M. Turing Award, as well as the National Medal of 29 See, for example, the slides from Jim Gray’s 1998 Turing Lecture, “What Next? A Few Remaining Problems in Information Technology,” available at http://research.microsoft.com/~gray/talks/Gray_Turing_FCRC.pdf; accessed August 16, 2007. 30 National Highway Traffic Safety Administration, “2006 FARS/GES Traffic Safety Facts Annual Report,” DOT HS 810 818, available at http://www.nhtsa.gov/portal/nhtsa_static_file_downloader.jsp?file=/staticfiles/DOT/NHTSA/NCSA/Content/TSF/TSF2006FE.pdf; accessed June 19, 2008. In 2006, 42,642 people were killed in highway accidents; the economic cost of motor vehicle crashes in 2000 was $230.6 billion.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment Technology and the Presidential Medal of Freedom, for their creation in 1973 of the Transmission Control Protocol (TCP), the language of the Internet. It is remarkable that today’s Internet employs the protocols that Cerf and Kahn devised more than 30 years ago (with many significant engineering improvements, of course). In 1980, there were roughly 200 hosts on the Internet—all of them operated by computer scientists and their friends. In 1990, there were roughly 150,000 Internet hosts. Today, there are about 160 million Internet hostnames, about 64 million active Internet hosts,31 and an estimated 1 billion Internet users worldwide. The Internet is a victim of its own success. It has reached its limits in terms of scalability, security, robustness, and manageability. Fundamentally new approaches are required in some areas. Creating a “new Internet” that meets the demands of the 21st century is a national priority replete with deep intellectual challenges. The National Science Foundation’s Networking Technology and Systems (NeTS) program32 and its Global Environment for Network Innovations (GENI) experimental infrastructure project were established to work on these and related challenges.33 The Personal Memex In his seminal 1945 paper “As We May Think,”34 Vannevar Bush described the Memex, a device that would store all information relevant to an individual and which could be searched using spoken commands. Dramatic advances in storage are on the verge of making the Memex feasible in terms of cost and size. Equally dramatic advances in search and retrieval technology, though, are needed to make it feasible functionally. Today’s Web search engines represent a remarkable advance in the ability to retrieve information—but even greater advances can be envisioned. For example, today’s Web search engines do not really “understand”—they can point to a Web page where an answer to a question might be (if such a Web page exists), but they cannot synthesize an answer to a question. Image and video retrieval works well when the media are explicitly or implicitly tagged, but not so well otherwise. The “contextualization” of retrieval requests similarly has vast room for improvement. A personal 31 See February 2008 Web server survey, available at http://news.netcraft.com/archives/web_server_survey.html; accessed February 27, 2008. 32 See “Networking Technology and Systems (NeTS),” available at http://www.nsf.gov/cise/cns/nets_pgm.jsp; accessed November 20, 2008. 33 See “GENI Project Office F.A.Q.,” available at http://geni.net/faq.html; accessed April 14, 2008. 34 Vannevar Bush, “As We May Think,” The Atlantic, July 1945, available at http://www.theatlantic.com/doc/194507/bush; accessed January 6, 2008.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment Memex should be able to store and effectively retrieve any digital information ever encountered by its owner, and bring this information to bear on relevant tasks. A Memex for storing and retrieving any digital information encountered within an enterprise might be equally achievable—and at least equally valuable. Post-Moore’s Law Computing Moore’s law describes the exponential increase in inexpensive integrated circuit density that has been enjoyed for more than 30 years. Of course, advances in computing have required more than just a decrease in feature size. The following have also been needed: new design methodologies and tools to handle hundreds of millions of transistors rather than tens of thousands, computer architectures that use these additional transistors to achieve a proportional increase in performance, system architectures that are synergistic with processor capabilities, and system and application software to exploit these new capabilities. Today the game is changing.35 It has been possible to continue increasing transistor density. However, concerns about power consumption and heat dissipation, which are of particular importance for mobile and data-center systems, have forced designers to hold back on increased microprocessor clock speeds. “Multicore” and other architectures that provide significant increases in parallelism are a possible response to this challenge. Revolutionary new approaches to programming will be required in either case. And research into post-silicon computing substrates—such as quantum computing—may open up important new avenues for continued computing performance increases. Personalized Education To make educational excellence the norm rather than the exception will help U.S. students reach their full potential. Although information technology is not a panacea for all of the shortfalls associated with the nation’s educational system, IT nonetheless offers the potential not only for significantly enhancing learning for all learners, but also for transforming the way that people learn. Coupling educational practice and educational technology with recent advances in the learning sciences—that 35 These topics are being addressed by a National Research Council study being conducted by the Committee on Sustaining Growth in Computing Performance. See http://sites.nationalacademies.org/cstb/CurrentProjects/CSTB_042221.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment is, knowledge of how people learn—can be fruitful.36 Educational tools including adaptive tutors, massive multiplayer online games, collaborative authoring, learning in context and just-in-time learning, and flexible simulation are needed. IT can contribute to creating a future in which educational excellence is ubiquitous. Personalized Health Monitoring The combined trends of Moore’s law, microelectromechanical systems sensors, and low-power radios are enabling an explosion of opportunities to create “sensors for everyone.” Embedding sensors in everyday devices such as cellular telephones, wristwatches, and household appliances can provide a wealth of important information on individuals’ personal activity patterns. As an example, researchers on the subject of obesity want to see day-long and week-long activity patterns so that they can better advise patients on how to alter their behavior. The specifics of where and when people walk, run, use stairs, and so on are important because “lifestyle advice” must be customized to each individual in order to be most effective. In elder care, long-term patterns in the frequency, duration, and mix of an elder’s activities can lead to early warning signs of various conditions, both physical and cognitive. Techniques for processing this kind of sensor data range from basic signal processing to sophisticated statistical machine learning. Creating visualization tools and user interfaces that consumers and health care providers can use and with which they can perform what-if analyses is another important direction, coupled with research in psychology on appropriate motivation strategies. Furthermore, IT can provide the security mechanisms and help implement the privacy protections that will be necessary for such monitoring and research programs.37 Mastering IT System Complexity The ever-increasing capabilities of computing systems (including both hardware and software) have managed to keep pace with the ever-increasing aspirations that users have for these systems. However, this remarkable progress has been accompanied by ever-increasing complexity. As a result, today’s computer systems are tremendously difficult to design, install, configure, operate, and maintain. The situation is incon- 36 See, for example, National Research Council, How People Learn: Brain, Mind, Experience, and School, Expanded Edition, National Academy Press, Washington, D.C., 2000. 37 See National Research Council, Engaging Privacy and Information Technology in a Digital Age, The National Academies Press, Washington, D.C., 2007.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment venient, risky, and expensive—typically, annual outlays for maintenance and operations far exceed total hardware and software costs. Research has finally begun to focus on these issues, and there have been some notable successes: companies such as Akamai Technologies and Google, for example, efficiently operate massive collections of systems that span the globe. These are special situations, though; for the typical home or business desktop system or server facility, the costs of ownership—and the risks—continue to be far too great. A “grand challenge” in computer systems for the next decade is to reduce these costs and risks—to make as much progress on security, privacy, dependability, and ease of use as has been made on increasing computing performance.38 Transforming the Developing World One of the greatest available opportunities for fostering economic growth and security for the United States is to improve the status of the several billion people on the planet currently living in poverty. On the surface it may seem that IT has little role to play in confronting this problem; most of the trappings of IT are far more expensive than can be affordably replicated at this scale. Digging deeper, however, it becomes clear that IT can play a role in designing effective ways to address afflictions such as inadequate health care, lack of clean water, deficient education, and lack of economic opportunity. The design of contextually appropriate information and communication technology to address nations’ development issues has recently become a major research focus for a number of institutions. Global projects to develop and deploy low-cost laptops, for example, are intended to address the problem of affordable IT for education and other purposes. Augmented Cognition The amount of information with which one is bombarded daily is increasing relentlessly, but a person’s ability to absorb, evaluate, and act on that information is not. Information technology is largely responsible for information overload, and information technology must also provide effective tools for coping—for helping people absorb and evaluate information and for calling to their attention at the appropriate time informa- 38 See, for example, National Research Council, Software for Dependable Systems: Sufficient Evidence? The National Academies Press, Washington, D.C., 2007; and Toward a Safer and More Secure Cyberspace, The National Academies Press, Washington, D.C., 2007. An ongoing study by the Committee on Advancing Software-Intensive Systems Producibility, under the auspices of the NRC’s Computer Science and Telecommunications Board, is expected to be completed in 2009. See http://sites.nationalacademies.org/cstb/CurrentProjects/CSTB_042212.
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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem: Retaining Leadership in an Increasingly Global Environment tion that requires action on their part. This “augmented cognition” is critical for those who operate in high-stress, high-information environments, but it may be even more important for those who are cognitively impaired—for example, Alzheimer’s patients, who with cognitive assistance and monitoring could live fuller, more independent lives. Driving Advances in All Fields of Science and Engineering The role of simulation, enabled by advances in high performance computing, in driving advances in all fields of science and engineering is well documented. Today though, we are seeing the emergence of a new form of computational science: one focused on the collection of massive amounts of data from sensors in the world around us and aided by advances in techniques for storing, retrieving, mining, visualizing, and discovering knowledge in those data. Sensors are everywhere—in the oceans, in scientific instruments ranging from telescopes to medical imaging systems, in our civilian infrastructure (buildings, roads, bridges). These sensors generate relentlessly increasing amounts of data. Discovery involves data analysis on a massive scale. Rapid advances in information technology are essential. SUMMARY The impacts that can be anticipated from advances in IT during the coming decades as described above are but a few examples of the promise of information technology. Advances in IT have transformed our lives, powered our economy, and changed the conduct of science and engineering. Even so, the field remains in its relative infancy, and greater opportunities lie ahead.