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The unprecedented growth of the U.S. and global economies during the decade of the 1990s was largely driven by investment in Information Technologies and the impact of those technologies on the overall economy. In the United States during this period, investment as a percentage of GDP rose by over three percentage points; and two-thirds of this increase was in Information Technology. As this investment drove the annual rate of economic growth to over five percent, it also resulted in a near doubling of the all important rate of U.S. productivity growth. Indeed, the impact of Information Technology activity was so great that people began to speak of the Information Technology Industries, and particularly of the Internet, as a New Economy that would fundamentally transform business, society, and politics. In the global arena, the U.S. performance was so powerful that it lifted Asia out of its financial crisis in record time and sustained strong world economic growth despite sluggishness in Europe, contraction in Japan, and uncertainty in Latin America. In fact, former Treasury Secretary Larry Summers was on the mark when he described the world economy as being like an airplane flying on one engine - the United States.
In the wake of the collapse of the Nasdaq bubble, Information Technology investment has dropped precipitously and the U.S. economy has fallen into recession and taken most of the rest of the world's economies with it. At the same time, productivity growth has also slowed, calling into question the validity of the very concept of a New Economy. Yet most scientists and many business leaders believe we have barely scratched the surface of Information Technology's potential to create new products, services, and industries that will generate tremendous new demand and growth and dramatically raise living standards around the globe.
In an attempt to determine more concretely the potential for and the means of using Information Technology to regenerate U.S. and world growth, the ESI Global Forum gathered 140 (list attached) of the world's key business, government, and academic leaders in the technology sector for a day and a half of round table discussions. The group addressed questions regarding: the future potential of Information Technology; the validity of the New Economy concept; the real impact of Information Technology on productivity; the products and services that are most likely to drive future growth; the steps that need to be taken to realize this potential; and the steps necessary to assure continued development of technology in the future. This report is a summary of the discussion and of the group's key conclusions.