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NOTES

1. Microcomputers (personal computers) are defined as computers with a list price of $1,000 to $14,999; see CBEMA (1994), pp. 60-61. Forrester (1994, pp. 2-3) estimates the share of households with PCs at about 20 percent, based on their survey of households and Bureau of Census data. Forrester's model accounts for retirements of older PCs and for households with multiple PCs. This is a lower estimate than the Software Publishing Association's widely cited 30 percent share. Building on an unusual fourth quarter sales surge, almost 7 million PCs were sold for residential use in 1994 (Markoff, 1995). According to another source, fourth quarter 1994 U.S. PC shipments were 32 percent higher than the corresponding quarter in 1993, 5.8 million units, feeding a 27 percent surge in worldwide PC shipments for 1994 in total (Carlton, 1994).

2. According to Roach (1994, p. 12), "IT [information technology] expenditures now comprise fully 45 percent of total business outlays on capital equipment—easily the largest line item in Corporate America's investment budget and up dramatically from a 20% share seen as recently as 1980 .... But does the technology story have staying power? We believe that the new dynamics of technology demand should continue to power the U.S. economy throughout the 1990s. Indeed, the technology-capital-spending link is an integral element of the productivity-led recovery scenario that lies at the heart of our basic macro call for the United States [emphasis in original]. In this light, IT is the principal means by which businesses can improve upon the efficiency gains first derived from cost-cutting, facilitating the transition between slash-and-burn downsizing and the rebuilding eventually required for sustained competitive prowess. Without increasing emphasis on technology, the economy gets hollowed out. The good news is that the long-awaited technology payback suggests this darker scenario won't come to pass."

3. See U.S. DOC (1994); the Department of Commerce utilizes data from the U.S. Bureau of the Census series, the Annual Survey of Manufactures. It places the value of shipments for the information technology industry at $421 billion for 1993. This number omits revenue from equipment rentals, fees for after-sale service, and markups in the product distribution channel. It also excludes office equipment in total. It includes computers, storage devices, terminals, and peripherals; packaged software; computer program manufacturing, data processing, information services, facilities management, and other services; and telecommunications equipment and services.

See also CBEMA (1994); CBEMA values the worldwide 1993 revenue of the U.S. information technology industry at $602 billion. In addition to including office equipment, it shows larger revenues for information technology hardware and telecommunications equipment than does the Department of Commerce.

4. In addition, European and Japanese manufacturers have significant sales in computer-related products such as telecommunications switches, semiconductors, and even high-performance computing equipment.

5. See Rensberger (1994) and Corcoran (1994). Also Coy (1993) indicates that data on individual information technology companies show 1992 R&D spending as a percent of sales ranging from 1 to 15 percent, concentrated at the lower end of that range; industry segment statistics fall in the same range. The figures suggest that despite the "high-tech" image of the industry, less R&D is conducted than many believe, and many firms capitalize on research conducted by others.

6. See, for example, CSPP (1994), pp. 1-2. A broad argument for a federal role in support of basic research in critical technologies, including computing and communications, is presented in a Council on Competitiveness (1991) report.

7. A point of reference can be found in a mid-1994 document from the Electronics Subcommittee of the National Science and Technology Council (NSTC, 1994a). It calls attention to U.S. dependence on a healthy electronics industry and speaks of efforts to work with industry to "develop a roadmap for electronics that will illuminate gaps in government-sponsored research and infrastructure efforts," focusing on "information products that connect to information networks, including the National Information Infrastructure (NII)."



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