National information infrastructure

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Forces of Technology

The NII is in part a consequence of changing technology. The key domains of information technology—computing, communications, consumer electronics, and content—are converging to enable the NII. First, computing increasingly takes place at multiple sites in large, interconnected networks of computers in which communications technologies are vital conduits. Second, high-capacity communications services increasingly are dependent on sophisticated computing to manage and keep track of traffic, bill for services used, and monitor for problems and network failures. Both worlds are becoming highly interdependent at all levels, from the small organization with a local area network of PC's, to global telephone and data communication networks. And consumer electronics is providing new information appliances from TV set-top boxes, to laptops, to household controllers and personal digital assistants (PDAs) that increase access to and use the networks in the home, the office and on the road. This convergence of computing, communications and consumer electronics is facilitating the creation of new kinds of content-oriented information services serving individuals and organizations through computer networks, CATV and broadcast TV. Some provide vertical services targeted to industries and workers like law, health, education, finance or trade (e.g., Lexis/Nexis legal data, TRW credit data, or Reuters brokerage data). Others provide horizontal services targeted to individuals and households like electronic shopping on CATV networks (e.g., The Home Shopping Network) or electronic mail, news groups and bulletin boards on computer networks (e.g., Prodigy, CompuServe, America Online and Microsoft Network). Of course, these markets overlap too in an increasing number of instances.

Competition in High Technology

The NII movement in the United States clearly is stimulated by a desire to promote the competitiveness of U.S. business and industry (Council on Competitiveness, 1993; USITC, 1993).87 The importance of the U.S. effort in NII for global competition lies in recognition and focus upon the crucial role that computing and communication already play in national economic welfare. Business investment in high-tech equipment and software is now running around $500 billion a year, or 8% of the economy’s total output. By the year 2000, business high-tech outlays are expected to be 25% of the economy (Flanigan, LA Times, Sunday, August 27, 1995: D9) It was once the case that the industries of nations gained success in international competition based mainly on the quality of transportation infrastructure available. Nations with deep water ports and well developed terrestrial distribution to and from those ports could exploit the technology of ocean transportation. After World War II, nations with a good mix of road, rail, and air transport infrastructure could bring goods and services to market cheaper and faster than those without them. Reliable, safe international air transport enabled the growth of tourism and global sourcing during the eighties and nineties, and countries with well-developed air transport benefited. Transport will remain important, but increasingly commerce in all forms, including transportation, will depend on information highways. Nations that have low cost, reliable communications infrastructure will attract business and compete successfully against those that do not. Moreover, it is believed that nations that adopt early will achieve first mover advantages, both from NII use and from the development of new technologies that can be marketed globally (Harris, 1995).88

The Information Economy

The NII movement is also the result of the shift to an information economy as the United States has entered the postindustrial era (President’s Commission on Industrial Competitiveness, 1985). In the past century, agricultural employment has declined from 45% to less than five percent and employment in manufacturing has returned to its 1890 level of 20% after peaking at 30% in 1960, while employment in services has exploded from 30% to over 75% (Harris, 1995:125-126). Even in manufacturing, knowledge-based service activities comprise 65-75% of manufacturing costs and even more of the value-added in the manufacturing sector (Quinn, 1992). Thus, computer and communications networks are to the information economy what waterways, railways and roadways were to the goods economy. Moreover, information-based activities have become a principal avenue not only to create new businesses, but to revitalize mature businesses and transform them into new ones (Davis and Davidson, 1991). The change to a service-based economy, with its information-based activities and computer and communication networks, has led to a perception that information infrastructure can play a major role in the betterment of economic and social life.

The fundamental goal behind the NII vision is to stimulate the domestic economy. It is believed that the NII initiative will speed-up development of new products and services and also speed their diffusion throughout the U.S. economy so that the benefits for the national economy can be achieved more quickly than would be the case without government intervention. For example, this is a basic argument for major telecommunications reform. Analysts point out that the new telecommunications products and services will develop in time without deregulation, but that they will develop sooner with government intervention and bring a $100 billion boost and 500,000 new jobs to the economy (Baer, 1995). Related economic goals are to ensure that U.S. businesses generally are well-positioned to compete globally, and that the information industry in particular is well-positioned to market its products and services with first mover advantages.

These foregoing three forces have made the concept of the NII salient, but in themselves none of them could mobilize the vision of the NII as it has appeared in the popular press and public consciousness. Much of the recent national interest in the NII is due to the efforts of important national political leaders. In particular, the NII movement has been promoted by Vice President Albert Gore, Jr., backed by President Clinton, and more recently, the support of Representative Newt Gingrich. These signifiers show that there are direct and pressing expectations that the NII movement will exploit the power of new technologies, aid US high technology industries in world wide competition, and help the transition of the US to an information economy. The overwhelming focus in these discussions is the promotion of economic growth. Although discussions of the NII frequently mention other forms of social benefit such as improvements in education, consumer choice, and so forth, these typically are subordinated to the economic goals, and are mentioned as added benefits rather than the primary objectives. With this focus on economic growth as a background, we can examine the efforts made to “design” the emerging NII through policy initiatives, particularly by restructuring the constellation of institutional forces that surround the NII movement in ways that enable and strengthen the special institution of the market.

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