lasers (e.g., fiber-optic communications). Over the course of the 50 years since its invention, the laser has been used in applications ranging from communications to welding to surgery.

The Economic Impact of the Laser

One measure of the economic impact of the laser is provided by Baer and Schlachter’s 2010 study for the Office of Science and Technology Policy (OSTP),2 which compiled data on the size of three economic sectors in which lasers have found important applications. Baer and Schlachter listed these as follows:

• Transportation (production of transport equipment, etc.), estimated to account for $1 trillion in output during 2009-2010;

• The biomedical sector ($2.5 trillion); and

• Telecommunications, e-commerce, information technology ($4 trillion).

The value of lasers deployed in each of these three sectors was respectively estimated at $1.3 billion (CO2 and fiber), $400 million (solid-state and excimer lasers), and $3.2 billion (diode and fiber lasers).

It is important to distinguish between the role of lasers as “enabling” the growth of these three sectors and the role of this technology as “indispensable” to these sectors, because the distinction is central to analyses of the economic impact of any new technology. The fundamental question that arises in this context is, What would have happened in the absence of the laser? That is, what if substitutes had been employed to realize some if not all of the benefits associated with the laser’s applications in these sectors? What would have been the cost (both in terms of higher prices and reduced functionality) associated with using non-laser substitutes? In some areas (e.g., surgery, some fields of optical communication), substitutes might well have been unavailable or would have performed so poorly as to render them useless. In other fields such as welding, however, substitutes for lasers that presented fewer cost and performance penalties might well have appeared. In some cases, substitutes for lasers might well have improved their performance and reliability over time.

In the case of the laser as with most major innovations, the data and the methodology necessary to conduct counterfactual thought experiments of this sort are lacking, which makes it difficult to develop credible estimates of economic impact. These analytic challenges are no less significant in assessing the impacts of other


2 Baer, T., and F. Schlachter. 2010. Lasers in Science and Industry: A Report to OSTP on the Contribution of Lasers to American Jobs and the American Economy. Available at Accessed June 25, 2012.

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