National Academies Press: OpenBook

Information Technology Innovation: Resurgence, Confluence, and Continuing Impact (2020)

Chapter: 1 The Impact of Information Technology

« Previous: Executive Summary
Suggested Citation:"1 The Impact of Information Technology." National Academies of Sciences, Engineering, and Medicine. 2020. Information Technology Innovation: Resurgence, Confluence, and Continuing Impact. Washington, DC: The National Academies Press. doi: 10.17226/25961.
×

1
The Impact of Information Technology

Information technology (IT) is widely understood to be the enabling technology of the 21st century. IT has transformed, and continues to transform, all aspects of our lives: commerce and finance, education, energy, health care, manufacturing, government, national security, transportation, communications, entertainment, science, and engineering. IT and its impact on the U.S. economy—both directly (the IT sector itself) and indirectly (other sectors that are powered by advances in IT)—continue to grow in size and importance.

Although they do not capture the full impact of the IT sector, government statistics give a sense of its contributions to the U.S. economy. According to estimates by the U.S. Bureau of Economic Analysis (BEA), the IT-intensive “information-communications-technology-producing (ICT)” industries grew 52 percent from 2012 to 2018 and contributed nearly 6.2 percent (over $2.2 trillion) to the overall U.S. gross domestic product (GDP) in 2018.1 Another measure of the contribution of IT to the economy is provided by the BEA’s estimate of the digital economy’s contribution to GDP, which was 6.9 percent in 2017.2 The BEA also estimates that the

___________________

1 U.S. Bureau of Economic Analysis (BEA), “Interactive Access to Industry Economic Accounts Data: GDP by Industry,” https://apps.bea.gov/iTable/iTable.cfm?reqid=150&step=3&isuri=1&table_list=15&categories=gdpxind, accessed July 1, 2020.

2 BEA includes in its definition of the digital economy three major types of goods and services: (1) the digital-enabling infrastructure needed for an interconnected computer network to exist and operate, (2) the e-commerce transactions that take place using that system, and (3) digital media, which is the content that digital economy users create and access. Because of the limitations of available data, BEA’s initial estimates include only goods and services that are “primarily digital.” This means that some components of the digital economy, like peer-to-peer (P2P) e-commerce, also known as the sharing economy, are excluded from the initial estimates. P2P transactions such as ride-sharing services rely on Internet-enabled devices to match supply and demand, but also have a nondigital component of in-person provision of services. (See BEA, “Digital Economy,” https://www.bea.gov/data/special-topics/digital-economy, accessed July 1, 2020.)

Suggested Citation:"1 The Impact of Information Technology." National Academies of Sciences, Engineering, and Medicine. 2020. Information Technology Innovation: Resurgence, Confluence, and Continuing Impact. Washington, DC: The National Academies Press. doi: 10.17226/25961.
×

digital economy grew at an average annual rate of 9.9 percent for the period 1998 to 2017 while the overall economy grew at a 2.3 percent average annual rate. By contrast, the total federal funding in fiscal year 2018 for the networking and IT research and development (R&D) program, which includes most federal support for IT R&D, was approximately $5.1 billion,3 or about 0.03 percent of GDP.

These substantial contributions reflect only the direct economic benefits of the IT sector and do not capture the full benefits realized from the adoption of IT throughout the economy.4 This report also considers IT’s transformative impact across the economy, using as examples the health care, automotive, agriculture, and sports sectors, and charts how multiple streams of IT innovation come together to transform industries, sometimes tapping into decades of research. Although this report does not present an in-depth economic study, the examples provided point to the myriad of paths tracking IT research to economic payoffs. Starting with a robust network of federally funded academic research, these activities repeatedly create advances in IT capabilities and uncover new applications and uses. These IT advances raise economic welfare by reducing costs and enhancing productivity, and often by enabling new services and markets for those services.

The examples in this report also point to an even wider economic lens of improving quality of life through saved lives (more effective health care, safer automobiles), enhanced spending power (improved food production, efficient e-commerce), and compelling entertainment (engaging sports). Importantly, this report calls attention to the complex interactions and cycles connecting research to economic impact, firmly pushing back against simplified linear “ladder” or “waterfall” models. In contrast, this report points to the importance of the robust ecosystem that pulls together fundamental academic research, industry insight and innovation, and multidisciplinary collaboration as the backdrop for these economic advances.

To appreciate its pervasiveness, imagine spending a day without IT. This day would be a day without diagnostic medical imaging or robotic-assisted surgery; a day during which automobiles lacked antilock brakes, electronic stability control, or other driver assistance; a day without digital maps, traffic information, or navigation directions; a day without digital media—without streaming music or video, computer animation, or video games; a day without online education or telehealth; a day during which aircraft could not fly, travelers had to navigate without benefit

___________________

3 J.F. Sargent, Jr., 2018, “Federal Research and Development (R&D) Funding: FY2019,” Congressional Research Service, https://fas.org/sgp/crs/misc/R45150.pdf; Committee on Networking and Information Technology Research and Development, 2018, “Supplement to the President’s FY2019 Budget,” National Science and Technology Council, https://www.nitrd.gov/pubs/fy2019-nitrd-supplement.pdf.

4 See, for example, S. Greenstein and F. Nagle, 2014, Digital dark matter and the economic contribution of Apache, Research Policy 43(4): 623-631.

Suggested Citation:"1 The Impact of Information Technology." National Academies of Sciences, Engineering, and Medicine. 2020. Information Technology Innovation: Resurgence, Confluence, and Continuing Impact. Washington, DC: The National Academies Press. doi: 10.17226/25961.
×

of the Global Positioning System (GPS), weather forecasters had no predictive models, banks and merchants could not transfer funds electronically, and factory production halted. It would be, for most people in the United States and the rest of the developed world, a “day the Earth stood still.”

With the COVID-19 pandemic, the ubiquity and importance of IT across industry sectors has manifested in new and powerful ways—such as aggressively tapping computational horsepower for predictive modeling, managing the logistics of a worldwide response, and inventing new tools for contact tracing. IT tools could be adopted quickly in part because they were built on existing enabling infrastructure such as smart phones, cellular and broadband data networks, and software frameworks for quickly creating mobile apps. IT has enabled enterprises to rapidly shift to remote work; helped restaurants and other services pivot to new ordering and delivery models; fueled a shift to telemedicine, remote health monitoring, and other forms of virtual health care; and exposed both potential and pitfalls in the largest experiment in online education ever conceived. Medical discovery—already propelled by advances in data analytics, modeling, and raw computational horsepower and storage—has been accelerated during this pandemic response through the study of proteins and antibodies and speeding up vaccine design. Brief discussions throughout this report describe current IT research activities and outstanding needs catalyzed by the pandemic.

This nationwide transformation has unfortunately also exposed new and old forms of the “digital divide” that have left the most vulnerable without access to core computing capabilities and Internet connectivity and has revealed fragile and inflexible supply chains. These divides, especially viewed in the light of mounting concerns about societal inequality, underscore the need for multidisciplinary research approaches that target disparities in access to IT and an inequitable distribution of social and economic gains from IT advances. Another side effect of the digital transformation has been new avenues for spreading misinformation and disinformation, concerns that also merit attention by researchers.

Overall, the interdependence of the U.S. economy with the historical and current innovations driven by IT is clear. This report describes key features of the IT research ecosystem that fueled IT innovation and fostered widespread and longstanding impact across the U.S. economy.

Chapter 2 captures key lessons about the nature of research in IT, focusing on how it fuels a virtuous cycle of innovation with growing economic impact, and reflecting on the varying timescales for payoffs from IT research, the roles of different actors in the ecosystem, and mechanisms for translation and transfer of innovative ideas. It features a graphic (Figure 2.1) that illustrates (1) the complex research

Suggested Citation:"1 The Impact of Information Technology." National Academies of Sciences, Engineering, and Medicine. 2020. Information Technology Innovation: Resurgence, Confluence, and Continuing Impact. Washington, DC: The National Academies Press. doi: 10.17226/25961.
×

partnership of universities, industry, and government that has led to U.S. leadership in IT and creation of new IT product and service categories and multi-billion-dollar industries and (2) the broader economic impact of IT research and its transformative impact throughout the economy. In this chapter, the committee also introduces the concepts of resurgence and confluence that frame Chapters 3 to 5.

Chapter 3 provides case studies of resurgence—when progress in a research area slows and the activity of researchers or funders falls off, followed by a blossoming of interest and fruitful application later when new ideas or enablers emerge. It looks at virtualization, virtual environments, and formal methods as examples of resurgent research topics over the past decades of computing research.

Chapter 4 provides a deeper exploration of the resurgence of research in artificial intelligence across a number of intersecting threads: machine learning, reasoning, natural language, computer vision, and robotics. This landscape of accomplishments in artificial intelligence also provides key building blocks for the subsequent discussion of confluence.

Chapter 5 provides case studies of confluence—when multiple streams of innovation in IT, innovation within sectors, and innovation in how IT is used to solve problems and create new capabilities in those sectors are combined and lead to transformative impact. It provides illustrative narratives for the following industry sectors: e-commerce, automotive, health care, sports, and agriculture.

Chapter 6 discusses IT research and impacts of that research on the horizon and the importance of sustained federal investment to secure, continued IT leadership and economic returns for U.S. industries.

Suggested Citation:"1 The Impact of Information Technology." National Academies of Sciences, Engineering, and Medicine. 2020. Information Technology Innovation: Resurgence, Confluence, and Continuing Impact. Washington, DC: The National Academies Press. doi: 10.17226/25961.
×
Page 5
Suggested Citation:"1 The Impact of Information Technology." National Academies of Sciences, Engineering, and Medicine. 2020. Information Technology Innovation: Resurgence, Confluence, and Continuing Impact. Washington, DC: The National Academies Press. doi: 10.17226/25961.
×
Page 6
Suggested Citation:"1 The Impact of Information Technology." National Academies of Sciences, Engineering, and Medicine. 2020. Information Technology Innovation: Resurgence, Confluence, and Continuing Impact. Washington, DC: The National Academies Press. doi: 10.17226/25961.
×
Page 7
Suggested Citation:"1 The Impact of Information Technology." National Academies of Sciences, Engineering, and Medicine. 2020. Information Technology Innovation: Resurgence, Confluence, and Continuing Impact. Washington, DC: The National Academies Press. doi: 10.17226/25961.
×
Page 8
Next: 2 Universities, Industry, and Government: A Complex Ecosystem Yielding Innovation and Leadership »
Information Technology Innovation: Resurgence, Confluence, and Continuing Impact Get This Book
×
Buy Paperback | $85.00 Buy Ebook | $69.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

Information technology (IT) is widely understood to be the enabling technology of the 21st century. IT has transformed, and continues to transform, all aspects of our lives: commerce and finance, education, energy, health care, manufacturing, government, national security, transportation, communications, entertainment, science, and engineering. IT and its impact on the U.S. economy—both directly (the IT sector itself) and indirectly (other sectors that are powered by advances in IT)—continue to grow in size and importance.

IT’s impacts on the U.S. economy—both directly (the IT sector itself) and indirectly (other sectors that are powered by advances in IT)—continue to grow. IT enabled innovation and advances in IT products and services draw on a deep tradition of research and rely on sustained investment and a uniquely strong partnership in the United States among government, industry, and universities. Past returns on federal investments in IT research have been extraordinary for both U.S. society and the U.S. economy. This IT innovation ecosystem fuels a virtuous cycle of innovation with growing economic impact.

Building on previous National Academies work, this report describes key features of the IT research ecosystem that fuel IT innovation and foster widespread and longstanding impact across the U.S. economy. In addition to presenting established computing research areas and industry sectors, it also considers emerging candidates in both categories.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!