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The Impact of Information Technology
Information technology (IT) is widely understood to be the enabling technology of the 21st
century.1 IT has transformed, and continues to transform, all aspects of our lives: commerce and
finance, education, employment, energy, health care, manufacturing, government, national security,
transportation, communications, entertainment, science, and engineering. IT and its impact on the
U.S. economy—both directly (the IT sector itself) and indirectly (other sectors that are powered by
advances in IT)2—continue to grow in size and importance.
In total, according to estimates for 2010 by the Bureau of Economic Analysis, the IT-intensive
“information-communications-technology-producing” industries3 grew by 16.3 percent and con-
tributed nearly 5 percent to the overall U.S. gross domestic product (GDP).4 A 2011 study by the
McKinsey Global Institute found that in 2009 Internet-related activities alone contributed an aver-
age of 3.8 percent to the U.S. GDP.5 (By contrast, the total federal funding in fiscal year 2010 for the
networking and IT research and development (R&D) program, which includes most federal support
for IT R&D, was approximately $4.3 billion,6 just under 0.03 percent of GDP.7) These substantial
contributions to the economy reflect only the direct economic benefits of the IT sector and do not
capture the full benefits realized from the application of IT throughout the economy.
To appreciate the magnitude and breadth of its achievements, imagine spending a day without
IT. This would be a day without the Internet and all that it enables. A day without diagnostic medi-
cal imaging. A day during which automobiles lacked electronic ignition, antilock brakes, and elec-
tronic stability control. A day without digital media—without wireless telephones, high-definition
televisions, MP3 audio, cable- or Internet-delivered video, computer animation, and video games.
A day during which aircraft could not fly, travelers had to navigate without benefit of the Global
Positioning System (GPS), weather forecasters had no models, banks and merchants could not trans-
fer funds electronically, and factory automation ceased to function. It would be a day in which the
U.S. military lacked precision munitions, did not have the capabilities for network-centric warfare,
and did not enjoy 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.”
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