Fostering Research on the
Economic and Social Impacts
of Information Technology

Report Of A Workshop

Steering Committee on Research Opportunities Relating to Economic and
Social Impacts of Computing and Communications

Computer Science and Telecommunications Board

Commission on Physical Sciences, Mathematics, and Applications

National Research Council

NATIONAL ACADEMY PRESS
Washington, D.C. 1998



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Fostering Research on the Economic and Social Impacts of Information Technology Report Of A Workshop Steering Committee on Research Opportunities Relating to Economic and Social Impacts of Computing and Communications Computer Science and Telecommunications Board Commission on Physical Sciences, Mathematics, and Applications National Research Council NATIONAL ACADEMY PRESS Washington, D.C. 1998

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NATIONAL ACADEMY PRESS · 2101 Constitution Avenue, N.W. · Washington, DC 20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the workshop steering committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This study was supported by Grant No. SRS-95285584 between the National Academy of Sciences and the National Science Foundation. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the organizations or agencies that provided support for this project. Library of Congress Catalog Card Number 98-86542 International Standard Book Number 0-309-06032-X Additional copies of this report are available from: National Academy Press 2101 Constitution Ave., NW Box 285 Washington, DC 20055 800-624-6242 202-334-3313 (in the Washington metropolitan area) http://www.nap.edu Copyright 1998 by the National Academy of Sciences. All rights reserved. Printed in the United States of America

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Page iii STEERING COMMITTEE ON RESEARCH OPPORTUNITIES RELATING TO ECONOMIC AND SOCIAL IMPACTS OF COMPUTING AND COMMUNICATIONS HAL VARIAN, University of California at Berkeley, Chair FRANCES ALLEN, IBM T.J. Watson Research Center ERIK BRYNJOLFSSON, Massachusetts Institute of Technology JORGE SCHEMENT, Pennsylvania State University SCOTT SHENKER, Xerox Palo Alto Research Center LEE SPROULL, Boston University RICHARD SUTCH, University of California at Berkeley Staff MARJORY S. BLUMENTHAL, Director JANE BORTNICK GRIFFITH, Interim Director PAUL SEMENZA, Program Officer (through July 1997) JON EISENBERG, Program Officer JULIE C. LEE, Administrative Assistant (through August 1997) MICKELLE RODGERS, Project Assistant RITA GASKINS, Project Assistant

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Page iv COMPUTER SCIENCE AND TELECOMMUNICATIONS BOARD DAVID D. CLARK, Massachusetts Institute of Technology, Chair FRANCES E. ALLEN, IBM T.J. Watson Research Center JAMES CHIDDIX, Time Warner Cable JEFF DOZIER, University of California at Santa Barbara A.G. FRASER, AT&T Corporation SUSAN L. GRAHAM, University of California at Berkeley JAMES GRAY, Microsoft Corporation BARBARA J. GROSZ, Harvard University PATRICK M. HANRAHAN, Stanford University JUDITH HEMPEL, University of California at San Francisco DEBORAH A. JOSEPH, University of Wisconsin BUTLER W. LAMPSON, Microsoft Corporation EDWARD D. LAZOWSKA, University of Washington DAVID LIDDLE, Interval Research BARBARA H. LISKOV, Massachusetts Institute of Technology JOHN MAJOR, QUALCOMM, Inc. DAVID G. MESSERSCHMITT, University of California at Berkeley DONALD NORMAN, Hewlett-Packard Company RAYMOND OZZIE, Iris Associates, Inc. DONALD SIMBORG, KnowMed Systems LESLIE L. VADASZ, Intel Corporation MARJORY S. BLUMENTHAL, Director JANE BORTNICK GRIFFITH, Interim Director (1998) HERBERT S. LIN, Senior Staff Officer JERRY R. SHEEHAN, Program Officer ALAN S. INOUYE, Program Officer JON EISENBERG, Program Officer JANET BRISCOE, Administrative Associate LISA L. SHUM, Project Assistant MICKELLE RODGERS, Project Assistant NICCI DOWD, Project Assistant RITA GASKINS, Project Assistant

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Page v COMMISSION ON PHYSICAL SCIENCES, MATHEMATICS, AND APPLICATIONS ROBERT J. HERMANN, United Technologies Corporation, Co-chair W. CARL LINEBERGER, University of Colorado, Co-chair PETER M. BANKS, Environmental Research Institute of Michigan WILLIAM BROWDER, Princeton University LAWRENCE D. BROWN, University of Pennsylvania RONALD G. DOUGLAS, Texas A&M University JOHN E. ESTES, University of California at Santa Barbara MARTHA P. HAYNES, Cornell University L. LOUIS HEGEDUS, Elf Atochem North America, Inc. JOHN E. HOPCROFT, Cornell University CAROL M. JANTZEN, Westinghouse Savannah River Company PAUL G. KAMINSKI, Technovation, Inc. KENNETH H. KELLER, University of Minnesota KENNETH I. KELLERMANN, National Radio Astronomy Observatory MARGARET G. KIVELSON, University of California at Los Angeles DANIEL KLEPPNER, Massachusetts Institute of Technology JOHN KREICK, Sanders, a Lockheed Martin Company MARSHA I. LESTER, University of Pennsylvania NICHOLAS P. SAMIOS, Brookhaven National Laboratory CHANG-LIN TIEN, University of California at Berkeley NORMAN METZGER, Executive Director

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Page vi The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. William A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce Alberts and Dr. William A. Wulf are chairman and vice chairman, respectively, of the National Research Council.

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Page vii Preface To aid in identifying fruitful approaches to assessment of both the positive and negative impacts of using information technologies, the National Science Foundation asked the Computer Science and Telecommunications Board (CSTB) of the National Research Council (NRC) to gather perspectives on the problem from experts in several relevant disciplines—in particular, economics, sociology, psychology, and anthropology, as well as computer science and engineering. It was thought that a sharing of ideas among individuals with pertinent experience as well as openness to the benefits of interdisciplinary analysis might suggest new ways of addressing what has proved so far to be a complex and difficult undertaking—assessing the diverse outcomes in a variety of contexts of the growing use of computing and communications technology. The results of this exploration are intended to be useful to the National Science Foundation in its efforts to assess the impacts of computing and communications technology, to provide examples of successful research and pose interesting questions to the research community, and to inform policy makers about the nature and utility of such research. The context for this project included recent legislation and administration efforts (e.g., enactment of the Government Performance and Results Act, establishment of the Federal Accounting Standards Advisory Board) as well as ongoing oversight activities aimed at assessing the outcomes and impacts of federal programs, including research and development programs. It also included the National Science Board's interest in expanding the body of science and technology indicators to include those relating to impacts on the economy and society of information technology's use. In addition, as a result of reductions in federal regulation or elimination of federal programs, a number of conventional federal sources of data have disappeared

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Page viii (e.g., data on telecommunications from the Federal Communications Commission, data on early Internet use from the National Science Foundation in connection with its operation of the former NSFNET). One result has been to focus more attention on what can and cannot be measured and on how different disciplines can contribute to better public understanding of the linkages among research and development, computing and communications science and technology, and the larger economy and society. CSTB formed the multidisciplinary Steering Committee on Research Opportunities Relating to Economic and Social Impacts of Computing and Communications, which met in February 1997 to organize a workshop held on June 30 and July 1, 1997 (Appendix A gives the agenda and lists participants). The steering committee sought to identify topics amenable to research, especially interdisciplinary efforts calling for collaboration involving computer scientists, economists, and others. The workshop featured discussion of specific kinds of impacts along with examination of methodological issues, availability of valid data for research, and approaches relevant to assessing the outcomes of information technology's use. An objective of the workshop was to identify and stimulate thinking about potential research topics, as well as to obtain perspectives on how to develop a more systematic understanding of outcomes important to public policy making. To this end, workshop participants considered possible gaps in knowledge, open research questions, areas where quantitative and qualitative data as well as new methodology are needed, and areas that appear to experts to be well covered. The workshop was also designed to illuminate how and where new research interest could be stimulated in a range of disciplines. In addition, the steering committee explored how to promote and support such interdisciplinary research. To broaden the base of common understanding among the multidisciplinary participants in the workshop, the steering committee requested position papers from participants (Appendix B includes a selection of these papers) and also commissioned two background papers (presented in Appendix C). These papers contributed to discussions at the workshop and to the steering committee's efforts to synthesize workshop participants' observations on key impact areas and associated analytical challenges. In addition to meeting physically, the steering committee shared information by electronic mail and through a special World Wide Web site, which it used to develop workshop and report materials. Given the broad nature of the task addressed by the workshop, and in keeping with the activity's limited budget and time frame, the steering committee adopted the approach of selecting and developing for presentation in its report a set of important and instructive examples compiled from the research topics, issues, and research approaches discussed at the workshop, as well as in submitted position papers. The resulting workshop report thus presents examples of important topics and fruitful approaches within several branches of social science rather than attempting to be comprehensive in considering the full range of possible topics. In the report, the fields of anthropology, demography, education, and

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Page ix political science are underrepresented, and the text has little to say about library science, bibliometrics, or information science. Omission of a number of interesting or significant topics reflects the exploratory nature of the project rather than a value judgment on the part of the steering committee. The topics of the creation and growth of the computer industry itself, among the most obvious of the economic and social impacts of computing and telecommunications, have been excluded here because they merit a report in their own right. The bibliography suggests further reading that provides broad coverage of many of the issues touched on in this workshop report. Many of the references, including a number of review articles, are themselves replete with pointers to other work. Where possible the report includes references to significant Web sites addressing the impacts of computing and communications. The workshop steering committee is grateful to Eileen Collins, who originated the idea of an interdisciplinary exploration of the impacts of computing and communications, and Les Gasser, both of the National Science Foundation (NSF), for their support of the project and for ongoing guidance. Their commitment to the importance of interdisciplinary interaction was fundamental to the design of the workshop. Funding for the report came from both the NSF Division of Science Resources Studies and the NSF Division of Information and Intelligent Systems. The workshop steering committee acknowledges the contributions of the workshop participants, both through papers written as part of workshop activities and during discussions at the workshop itself. The steering committee also wishes to thank the NRC staff for their assistance with the workshop and the preparation of the final report, including Marjory Blumenthal, Paul Semenza, Jon Eisenberg, Julie C. Lee, Mickelle Rodgers, and Rita Gaskins. Finally, the steering committee is grateful to the reviewers for helping to sharpen and improve the report through their comments. Responsibility for the report remains with the workshop steering committee.

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Page xi Acknowledgment of Reviewers This report has been reviewed by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council's (NRC's) Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the authors and the NRC in making the published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The contents of the review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their participation in the review of this report: Robert McC. Adams, University of California at San Diego, Michael Arbib, University of Southern California, Anita Borg, Xerox Palo Alto Research Center, Yale Braunstein, University of California at Berkeley, John S. Chipman, University of Minnesota, David Farber, University of Pennsylvania, Irene Greif, Lotus Development Corporation, Donna Hoffman, Vanderbilt University, Heather Hudson, University of San Francisco, James Morris, Carnegie Mellon University, Milton Mueller, Rutgers University, Jean-Michael Rendu, Newmont Mining Corporation, Henry W. Riecken, University of Pennsylvania School of Medicine (emeritus),

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Page xii Peter Temin, Massachusetts Institute of Technology, Timothy Van Zandt, Princeton University, and Terry Winograd, Stanford University. Although the individuals listed above provided many constructive comments and suggestions, responsibility for the final content of this report rests solely with the workshop steering committee and the NRC.

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Page xiii Contents EXECUTIVE SUMMARY 1 1 INTRODUCTION 7   1.1 Growth Trends 9   1.1.1 Computing Power 9   1.1.2 Demographics of Computer Ownership 10   1.1.3 Internet Use 12   1.1.4 Global Connectivity 13   1.2 Some Major Challenges 14   1.2.1 Productivity and Organizational Change 14   1.2.2 Information Technology and Wage Inequality 16   1.2.3 Design of Technology and Standards Setting 16   1.3 Role of Social Science 18 2 ILLUSTRATIVE EXAMPLES AND UNANSWERED QUESTIONS 21   2.1 Households and Community 21   2.1.1 Computer Use in the Home 22   2.1.2 Differential Impacts of Technology 24   2.1.3 Community 24   2.1.4 Education 26   2.2 Social Infrastructure: Universal Service 29   2.3 Business, Labor, and Organizational Processes 32   2.3.1 Location: Internationalization and Telecommuting 32   2.3.2 Labor and Information Technology 35

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Page xiv   2.3.3 Organizations and Processes 39   2.3.4 Social Science and the Workplace 46   2.4 Information Economy and Society 48   2.4.1 Protection of Intellectual Property 48   2.4.2 Free Speech and Content 52   2.4.3 Privacy 53   2.4.4 Information Use and Value 56   2.4.5 Pricing Models and Content 60   2.4.6 Pricing Information 61   2.4.7 Network Externalities 65   2.4.8 Auctions 66   2.4.9 Electronic Commerce 67   2.5 Illustrative Broad Topics for Ongoing Research 72 3 DATA—THE BASIS FOR NEW KNOWLEDGE 78   3.1 Types and Uses of Data 78   3.1.1 Data from Experiments 79   3.1.2 Panel Data 81   3.1.3 Data from Time-Use Studies 82   3.1.4 Metadata 83   3.2 Availability of and Access to Data 84   3.2.1 Data Collected by the Private Sector 85   3.2.2 The Need for Firm-level Data 86   3.2.3 Data Collected by Government 88   3.3 New Types of Data 89   3.3.1 Documenting the Effects of Technology Deployment 89   3.3.2 Data on Social Interactions from the Internet 92   3.3.3 The Internet as a Window into How Commercial Transactions Are Conducted 93   3.4 Time and Tools for Gathering and Interpreting Data 93   3.4.1 The Time Required to Do Good Social Science 93   3.4.2 Appropriate Subject Pools and Instrumentation 95   3.5 Approaches to Meeting Requirements for Data 95 4 OPTIONS FOR FOSTERING INTERDISCIPLINARY RESEARCH AND IMPROVING ACCESS TO RESULTS 101   4.1 Encouraging Interdisciplinary Studies and Collaboration 102   4.2 Funding to Strengthen Interdisciplinary Research 103   4.3 Making the Results of Interdisciplinary Research More Accessible 105

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Page xv BIBLIOGRAPHY 106 APPENDIXES   A WORKSHOP AGENDA AND PARTICIPANTS 127 B POSITION PAPERS SUBMITTED BY WORKSHOP PARTICIPANTS 131   Research on Information Technology Impacts Paul Attewell (Graduate School and University Center, City University of New York), 133   What If All Information Were Readily Available to All? Joseph Farrell (Department of Economics, University of California, Berkeley ), 138   Critical Issues Relating to Impacts of Information Technology: Areas for Future Research and Discussion Alexander J. Field (Santa Clara University), 139   Computer-mediated Communications Claude S. Fischer (Department of Sociology, University of California, Berkeley ), 142   Impacts of Information Technology: Behaviors and Metrics Amy Friedlander (Corporation for National Research Initiatives), 144   Five Critical Issues Relating to Impacts of Information Technology Michael Froomkin (School of Law, University of Miami), 147   Cultural Influences on the Process and Impacts of Computerization Rob Kling (Center for Social In formatics, Indiana University ), 150   Questions for Research Jeffrey K. MacKie-Mason (Department of Economics, and School of Information, University of Michigan), 152   Electronic Interactions Paul Resnick (AT&T Laboratories), 156   Social Impact of Information Technology Frank Stafford (University of Michigan), 158   The Uncalming Effects of Digital Technology Mark Weiser ( Xerox Palo Alto Research Center ), 160

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Page xvi C COMMISSIONED PAPERS     Infrastructure: The Utility of Past As Prologue? Amy Friedlander (Corporation for National Research Initiatives, Reston, Virginia), 165   Computer And Communication Technologies: Impacts on the Organization of Enterprise and the Establishment and Maintenance of Civil Society John Leslie King and Kenneth L. Kraemer (University of California, Irvine), 188