The Role of Enabling Technologies

Computers and related technological developments have become the hallmarks of a fast-growing, global economy in the midst of large-scale privatization, free trade, and cooperation among nations. In discussions about the world economy in the next 20 years, optimism is most apparent when talk focuses on the global information infrastructure and electronic commerce. Electronic commerce illustrates how technology will affect all aspects of economic life by combining computer technology, telecommunications, and market transactions into a seamless socioeconomic system. Not surprisingly, the future is often defined by various applications of computer-related high technologies. These technologies and related industries are part of an integrated system just as automobiles and highways represented an economic system of the 20thcentury. To use the popular analogy, the Information Superhighway is the interstate highway; its contents are automobiles and their cargoes; the Internet service providers are the access roads; and transmission protocols are the traffic laws. Traffic congestion can occur on both interstate highways and Information Superhighways and can be alleviated by expanding highway lanes or using cables with larger capacity. Faulty planning and investments may fail to reduce congestion in access ramps to highways and in the last-mile access to the Information Superhighway. Tolls may be imposed on cars and more easily on messages moving on information highways. This highway analogy is relevant and helpful in understanding what the Information Superhighway signifies and how it operates. Just as the automobile sector dominates today's economic activities with its associated industries of automobile manufacturers, new and used car dealers, parts suppliers and repair shops, motel and travel services, oil companies and gas stations, insurance services, and roads and highway maintenance and administration, the new economy will revolve around the many industries operating on the Information Superhighway—computer hardware, software, the communications industry (including telephone, cable, satellite, and wireless), and various content providers such as publishing, database, entertainment, and news organizations. In many ways, this new industrial sector—the interactive multimedia industry—can be considered to be the automobile-related industry of the 21st century. However, the highway analogy often fails to convey the importance of the infrastructure in the broader economic context. Just as today's economy adds up to more than an economy characterized by automobiles and the interstate highway system, the virtual economy supported by computers and the telecommunications industry is more than the sum of these industries. For example, automobiles and highways triggered substantial changes in the urban landscape and social organization. We need only think of malls and suburban sleeper-towns, mobile single families, commuter traffic, and empty or declining inner cities. Similarly, the Information Superhighway will enable people to telecommute. This may reduce commuter traffic but may also encourage urban sprawl or the migration toward sun-belt and pollution-free rural states. In terms of business and market organization, structural changes will transform marketing methods into a close cooperation between producers and buyers, who can dictate what they want in a product and rapidly respond to changes in prices and product quality. Competitive strategies will see wholesale changes as market participants interact with each other in a technologically sophisticated and equitable environment. Accordingly, taxation must be revised to reflect ubiquitous online transactions, and government regulation must change to keep pace. Granted, automobiles and highways play an important role in today's economy in terms of gross national product (GNP) and resource allocation. Still, the economy created and supported by these industries is more than an "automobile economy" or a "highway economy." Similarly, components of the interactive multimedia industry, however important, are simply tools by which products are produced and consumed and through which virtual players interact. Still, it is of great interest to identify what technologies will become dominant in the future. Products will look different, depending on what software and encryption technologies are adopted; response time and prices will be affected by whether cable or satellite is used for delivery infrastructure; and market processes will change if push or pull technology is favored or if PCs or network computers with applets dominate the future computing platform. How will the market choose any one product over all the others?