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6 - technology

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The rapid computerization and networking of American businesses, industries, and homes has been called a "microprocessor revolution." That revolution is fundamentally transforming the way—and the speed with which—people think, connect, collaborate, design and build, locate resources, manipulate tools, conduct research, analyze and forecast, reach markets, present themselves and their wares, move and track products, make transactions—in short, do business.

TECHNOLOGY IS TRANSFORMING THE U.S. ECONOMY

Advances in the computer industry, coupled with those in telecommunications, have created the new information technology, or IT, industry and inaugurated an information age. By 2006, nearly half of all U.S. workers will be employed in industries that produce or intensively use information technology, products, and services, according to U.S. Department of Commerce projections. 1

The workplace and workforce impacts of these technological changes have been so pervasive, so dramatic in size and speed, as to be hard to describe. A brief look backward, however, is illustrative.

Starting in the 1950s, an entirely new industry was established, led by the large "mainframe" computer companies such as IBM, RCA, Honeywell, and Univac. These companies opened a host of new jobs producing, maintaining, and servicing computer systems. Computer programmers, keypunch operators, computer service technicians, and computer sales personnel were soon in demand by the tens of thousands—good jobs to support a growing industry.

Yet in less than fifty years, only a relative handful of the jobs created in that initial wave of computerization still exist, held by workers servicing older systems still in operation. In their wake have come millions of still-newer jobs in an ever-widening variety of computer applications created to capitalize on the capacities of hardware and software systems. The life span of a personal computer provides one illustration of the diminishing time between introduction and "obsolescence" of new technologies. The average life of a personal computer, or PC, has decreased from 4 1/2 years in 1992 to just over 3 years in 1999, and is predicted to be only 2 years by 2007.2

THE INFORMATION TECHNOLOGY INDUSTRY IS EVOLVING RAPIDLY

To understand the dynamics of the transformation underway, it is important to grasp both the scope and the speed of this revolution. Its roots are indeed very recent, beginning with the widespread introduction of large mainframe computers in the 1950s and ’60s, followed by steady advances in computing power that permitted a decrease in their physical size. The introduction and dramatic growth of personal computers in the 1980s took even the computer industry by surprise, threatening the mainframe operations of the larger companies. Computers moved into millions of American homes.

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Computer Power

Connecting personal computers so that people throughout an organization could communicate expanded the possibilities for these tools. Once such local area networks, or LANs, were established, it was a relatively short step to linking an individual computer or a whole network with remote users over telephone lines, using a modem to transmit the signal. Access by personal computer to information in remote mainframes, bulletin boards, and other networks significantly enhanced the utility and power of these networks.

When computers needed to "talk" to one another, incompatibilities among computer systems became a problem, which in turn was addressed by efforts to standardize file formats, creating a common language. This language—HTML, for hypertext markup language—became the core of the Internet. Widespread acceptance of the Internet brought together the power of computing with a standardized protocol, enabling millions of computers to communicate with one another. An estimated 64 million Americans go on line every month.3The Internet generated an estimated $300 billion in revenues in 1998, approaching the size of the automobile industry. 4

The power of the Internet and the increasing power of computers (see box 6.1), which allow for digitizing various forms of communication from voice to video, is driving the information technology and communications industries toward convergence. Television, voice communication, the Internet, and other forms of communication are all moving towards common frameworks based on digital systems. With these common frameworks, all such forms of information can be transmitted on common distribution systems, processed by common microprocessor technologies, and stored in common digital filing structures.

THE TECHNOLOGICAL REVOLUTION SPREADS

The growth and reach of the Internet enables virtually free communication among a large number of people. In 1995, there were only 22 million Internet users in the United States. By 1998, the figure had quadrupled to 88 million. Estimates are for 110 million users in 1999 and 133 million by the year 2000.8

It has taken only seven years for the Internet to be adopted by 30 percent of Americans, com-pared to seventeen years for television and thirty-eight years for the telephone.9 This dramatic growth is continuing as the information available on the Internet is growing rapidly and its utility to users is increasing. A novelty in the mid-1990s, the Web has become a household word and an indispensable tool of industry.

Internet access has not grown evenly, however. High-income households are twenty times as likely to be connected to the Internet as those at the lowest income level. Black and Hispanic house-holds are about two-fifths as likely to have home Internet access as are white households, and those in rural areas lag behind those in urban areas. But at least some of these differences are diminishing. The difference in access between blacks and whites, for example, is narrowing for those with incomes at or above $75,000. 10 In 1999, 40 percent of blacks age 18 or older used the Internet at home or at work, compared to 55 percent of the general population (including blacks).11

The computer and IT revolutions have changed virtually every industry in the economy. Numerous examples illustrate the point:

  • A manufacturing plant can be operated by a handful of technicians controlling robotic systems.
  • State-of-the-art inventory systems can supply needed parts "just in time" for assembly.
  • New jobs have been created in airfreight and delivery systems to service such just-in-time inventory operations.
  • Handheld mobile phones have become commonplace, and digital phone systems will soon be able to reach anyone in the world via satellite.

Businesses have found ways to reduce the costs of carrying large inventories of intermediate parts and finished goods through computer-managed inventories and just-in-time manufacturing and servicing. Barcode scanners like those at store checkout counters are among the innovations that have helped businesses meet consumer demand more effectively by more closely monitoring inventories, reducing lead time for delivery of goods, and reducing inventories.

Leading manufacturers have developed computer links to their suppliers and customers. Their suppliers follow progress on the production line via computer hookup and can plan on shipping parts and materials to the right place at the right time, minimizing inventories and downtime. Their customers have computer access to the latest production status and thus know precisely when to expect delivery. A major airplane manufacturer, for example, maintains a parts-distribution Web page that greatly speeds the pace at which planes are serviced. Locating a part used to take five to ten hours, often forcing cancellation of a flight; parts can now be located within minutes. Diesel-engine manufacturers link via computer to the service records of the truck engines they have sold, permitting them to predict more precisely the demand for replacement engines. Global manufacturing companies link their design centers in different countries to create inter-national design teams.

The technological revolution has also launched entirely new industries, such as biotechnology. Literally hundreds of new companies have emerged in areas unheard of a decade ago. Advances in virology, cancer research, and neurology are being made as a direct result of advances in computational and information systems. Researchers can now use genetic mapping systems to locate the genes responsible for a variety of hereditary diseases. Emerging industries such as environmental technology benefit from applications ranging from remote sensing systems to biological agents that eat harmful chemicals or waste—applications made possible through advances in computer and information technologies.

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Webster's Dictionary for the Twenty First Century

The growth of information technology has also had its darker side. Fighting computer viruses like the Melissa virus and the Explore.zip worm cost businesses worldwide $7.6 billion in the first half of 1999.12 The increasing accessibility of data has also raised privacy concerns. The new technology has made it very easy to collect personal information, such as medical records, and make it available to a large number of users.

TECHNOLOGY AND JOB CREATION

Employment patterns in the computer-manufacturing sector illustrate the complex impact of technological change on the workforce. Computer-manufacturing jobs skyrocketed until 1984 as American producers dominated world production of all kinds of computers. Between the appearance of the first PCs in the mid-1970s and 1983, computer industry jobs in the United States grew by nearly 80 percent, while total U.S. manufacturing employment grew by only 4 percent.13 This dramatic growth was interrupted, however, by the entry of foreign computer producers into U.S. markets, which contributed to a 26 percent drop in U.S. computer employment between 1983 and 1994.14

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Box 6.3 Jobs of Yesterday and Tomorrow

That drop in computer-production jobs, however, was more than offset by growth in computer-related jobs for sales clerks, software designers, and LAN operators. This dynamic characterizes the rapidly evolving industry: significant growth in new jobs and activities masks the destruction of older jobs. This "churning" in employment often goes unnoticed. Downsizing, rightsizing, efficiency mergers, and buyouts are facts of life in this industry and throughout the new economy.

With the continued rapid evolution of technology, the cycle of job growth, destruction, and creation will also continue into the foreseeable future. The dynamics of the change may be less obvious in the future but much more widespread. Pick up any newspaper and read a story about the demand for "high tech" jobs, a demand reflected in the classified ads and their numerous listings for computer specialists, programmers, database administrators, Web designers, and so on. The Washington Post classifieds for one day in May 1999, for example, showed job openings for Visual Basic, Java, and CGI programmers, help-desk administrators, e-cable systems designers, GIS analysts, and call-routing specialists—all highly technical jobs, often requiring years of training and experience to qualify.

Yet these jobs often require much more than the latest high-tech skills. What may not show up in the text of a classified ad is that the content of these high-tech jobs is changing. More employers want computer specialists to be knowledgeable about the industry their business is in, in addition to being technically skilled.

Jobs for database administrators, for example, are among a cluster of related occupations that are projected to increase by 118 percent by 2006. Many employers require their database administrators to have a bachelor’s degree in computer science, but for some employers that will not be enough. The database administrator for a publisher of electronic newsletters on health care or engineering may also need to have strong writing and editing skills and special knowledge of those industries.

Even workers in "nontech" jobs are discovering that the technology revolution has not passed them by. In fact, it is rare to find a job that does not require some knowledge of computers or computer-based systems. On any given day, newspaper classifieds in cities are loaded with help-wanted ads that seem to be designed for workers with little or no experience with technology:

  • Administrative help is needed to reorganize an office;
  • Experienced auto mechanics are wanted by car dealerships and service stations;
  • Receptionists are needed to handle busy phone lines; and
  • A travel agency needs an experienced "leisure agent."

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Box 6.4 Veterans Lead the Way

What all of these jobs have in common is the high level of technological skills needed to perform them. Large or small, employers are no longer satisfied with an office worker who is "good with figures" or "detail oriented." Administrative staff must now be familiar with word-processing suites, accounting and billing software, human resources packages that are computer-based, and 12-to-24-line phone systems that provide call forwarding, voice mail, and conference bridges.

"Old school" auto mechanics can forget about getting a job if they lack the skills to use computer-based diagnostic tools now standard in repair shops. And travel agents who cannot adroitly make travel arrangements using an automated system may soon find themselves relegated to hand-delivering airline tickets. Even doctors and lawyers use technology every day for research, record keeping, or simply to communicate with colleagues and clients.

As the tools of each trade become more sophisticated, many more occupations will have "tech" elements. Most workers will need basic computer skills to enter their chosen occupations and additional specialized training in field-specific applications to advance. It will indeed be a world that rewards lifelong learning.

The overall employment picture in high-tech industries is extremely bright. High technology has added over one million jobs to the U.S. economy since 1993.15 Real average wages in these industries have increased 19 percent from 1990 to 1997, com-pared with a 5 percent average increase across the private sector. The average high-tech job today pays 78 percent more than the private-sector average.16

TECHNOLOGY IS REVOLUTIONIZING THE WAY WE WORK

Over the century, mass-production occupations have been steadily replaced by office-worker and service-provider occupations. Indeed, virtually all of the jobs that were lost in goods production and distribution since 1969 have been offset by office jobs.17 Rather than industrial machinery, these workers’ tools are telephones, fax machines, and personal computers. With the rapid introduction of mobile phones, laptops, e-mail, and the Internet, the traditional time and space requirements of office workers are no longer the rigid constraints of the past. In particular, the growth in computer applications and the Internet has enormous potential to help lower barriers to job opportunity for workers with disabilities.

A beginning trend in the increased use of flextime and flexiplace followed the lifting of traditional constraints. Only a fraction of employers currently avail themselves of such arrangements, but new technologies that permit this flexibility have been introduced relatively recently: access to the Internet, widespread use of e-mail, and the prevalence of cellular and digital phones all occurred in the latter half of the 1990s. As the popularity of these tools grew, their costs decreased. Prevalence has demystified their use, making them ordinary implements for conducting business.

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Box 6-5 Going to the Office is not what it used to be

Because the new technology is flexible, the workplace of the future will see a substantial increase in the number of workers who work from their homes or some location other than the office, though the overall proportion of workers who do so will remain small in the near future.

Assistive technologies are opening up the workplace to individuals with disabilities. Character readers and voice recognition devices, for example, help workers with visual impairments. (See box 6.6.) "Smart" prostheses employing microprocessors help their wearers to perform workplace tasks. Communications and computers make possible accommodations such as home-based work, flexible schedules, and job sharing. Home-based customer–call-in centers are examples of businesses that, because of advances in technology, have been able to tap the abilities of workers with disabilities.

New flexibility in the workplace presents a number of opportunities and challenges. Telecommuting and flexiplace programs will reduce commuting time—creating more family time—allowing workers to live in areas far from their employers’ offices. These new work options particularly benefit workers facing child-rearing and eldercare responsibilities and workers with disabilities. But the flexibility also opens up the possibility of exploitation and abuse if employers require homework above and beyond normal working hours or establish modern home sweatshops. Workers physically isolated from their coworkers and supervisor may also encounter a kind of discrimination—in promotions or other workplace opportunities—based on lack of "face time" with senior officials.


1 Susan Page, "E-world Fuels U.S. Economy," Report Says, USA Today, June 22, 1999, p. 1A.

2 Standard Resources, Inc., "A PC’s Life Span is Getting Shorter," USA Today, June 22, 1999, p. 3A.

3 Internet Economy Indications, "Internet Economy Grows," Washington Times, June 12, 1999, p. C7.

4Cisco Releases Study Measuring Jobs and Revenues Tied to Internet Economy, http://www.cisco.com/warp/public/146/june99/23.html, June 10, 1999.

5 Robert D. Atkinson and Randolph H. Court, The New Economic Index: Understanding America’s Economic Transformation, Washington, D.C.: The Progressive Policy Institute, November 1998, p. 19.

6Maryann Jones Thompson, "A Half of U.S. Homes Now Have PCs," The Industry Standard, June 7, 1999.

7 Ray Kurzweil, The Age of Spiritual Machines: When Computers Exceed Human Intelligence, New York: Viking Publishers, 1999.

8 CommerceNet/Nielsen Internet Demographic Survey, April 1999, http://www.comerce.net/research/stats/wwwpop.html.

9 Atkinson and Court, p. 31.

10 U.S. Department of Commerce, National Telecommunications and Information Administration, Falling Through the Net: Defining the Digital Divide, July 1999.

11 Joint Center for Political and Economic Studies, National Opinion Polls, 1999.

12 Michael Erbschole, Computer Economics Press Release, "Computer Virus Attacks Have Cost Businesses $7.6 Billion in 1999," June 18, 1999.

13 Richard W. Judy and Carol D’Amico, Workforce 2020, Indianapolis, Indiana: Hudson Institute Inc., 1997, p. 17.

14 Judy and D’Amico, p. 18.

15 Michaela D. Platzer, Cyberstates 3.0: A State-By-State Overview of High Technology Industry, American Electronic Association, June 1999.

16 Office of the Vice President release on the U.S. Department of Commerce report, The Emerging Digital Economy II, June 21, 1999. In 1997, workers earned an average of $52,920 in IT industries, versus the average earned by all workers, $29,787.

17 Atkinson and Court, p. 9.

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