1. These figures represent combined federal obligations for research (basic and applied) in computer science and electrical engineering, the two academic disciplines most closely associated with information technology (IT). Some work in electrical engineering, such as research on power systems, is not applicable to IT, and some work in other disciplines is applicable but is not captured in these statistics.

2. These sectors, as defined by the Standard Industrial Classification (SIC) system, are SIC 357, office, computing, and accounting machines; SIC 366, communications equipment; SIC 367, electronic components (including semiconductor devices); SIC 48, communications (services); SIC 504, professional and commercial equipment and supplies; and SIC 737, computer and data processing services (including prepackaged software, custom programming, systems integration, and other services).

3. As described in greater detail in Chapter 2, federal statistics on IT industries' R&D investment are not compiled in a consistent manner from year to year because of the frequent reclassification of firms from one IT sector to another as well as into and out of the IT industries. The aggregate figures used in this report account for reclassifications among IT sectors but not into or out of the IT industry.

4. It is estimated that between 70 and 80 percent of all major system development efforts are never completed, are late, or overrun cost projections by a wide margin. Estimates of failure rates in large-scale system development efforts are contained in several studies. See Johnson (1999), Standish Group (1995), Gibbs (1994), Jones (1996), and Barr and Tessler (1998).

5. This definition of a component is much broader than the definition typically used in the research community.

6. The most notable exception to this general rule is IBM, which derives a significant portion of its revenues from IT-related services and systems work and which maintains a substantial research program. About one-quarter of the work conducted by IBM Research supports its systems and services businesses.

7. A discussion of the long-standing challenges inherent in interdisciplinary work in the social sciences can be found in Campbell (1969).

8. Most notably, Xerox failed to capture much of the benefit of its pioneering work in personal computing. IBM's work in relational databases and reduced-instruction-set computing seeded not only its own product development efforts but also those of numerous competitors. Economics provides a theoretical verification of this phenomenon. See CSTB (1999), Nelson (1959), and Arrow (1962).

9. See Chapter 3 for a more in-depth discussion of each of these topics.

10. In recent years, a number of universities have created interdisciplinary schools that examine issues at the intersection of IT, business, and the social sciences. Examples include the School of Information Management and Systems at the University of California at Berkeley and the School of Information at the University of Michigan. Carnegie Mellon University and the Massachusetts Institute of Technology also have a number of interdisciplinary departments and divisions in this general area. Chapter 4 contains a more complete list of such programs.

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