dir@sera. ie Website: www. sera. ie Submission on the Draft Consultation Paper for the Rural Development Programme 2014-2020 February 2014 Page 2 1. Introduction As part of the ongoing process
-A core objective of Government policy thinking is balanced regional development'.'The NSS represents the Government's roadmap for achieving this objective.
Sectoral programming, by its nature, will not allow for a meaningful evaluation of the achievement of balanced regional development.
unambiguous designation of the NUTS III Regions as the practical level for spatial programming in the new RDP.
This information, data and reports are needed more promptly and must be produced more speedily. This should include progress updates on projects from implementing bodies as well as quantitative data;
-The levels of bureaucracy and administrative burden on beneficiaries within the RDP need to be reduced further
Big data is a goldmine for companies...p. 6 Boosting e-skills in European higher education requires political will at national level...
including private ICT companies such as Google, Hewlett packard, Microsoft, Accenture and Samsung. The pledges also come from universities, academies and local governments as well as national coalitions
For example, it shows that the Department of computer science at the University of Sheffield is to establish a Computer science Ambassador Scheme for 45 secondary school pupils
which will deliver short‘hands on'courses in core computer science for pupils aged 14-15,
Another pledge comes from Microsoft Europe which aims to increase the number of their high quality apprenticeships and internships by half over three years, from the current 9, 000 to 13,500.
Afke Schaart, senior director for EU Institutional Affairs at Microsoft told Euractiv that in January the company committed to a further two pledges focused on fostering entrepreneurship
and students to engage with computer science in a fun way. Schaart said that the Commission has promoted rightly digitalisation and its adoption by society as one of the most important sources for growth and employment.
while helping Europe to reap the benefits of the booming digital economy, Microsoft's senior director for EU institutional Affairs said.
John Higgins, director general of Digital Europe, the association for the digital technology industry in Europe, said that the initiative had created already competition between actors involved on pledges.
At the same time, digitisation created six million jobs globally in 2011, despite the economic downturn, as ICT is adopted widely in all corners of society.
Experts believe a new wave of big data and smartphone applications has the highest potential in terms of job creation.
Filling the gaps Moreover, the ICT sector will be in a desperate need for skilled workers, according to experts.
Afke Schaart, senior director for EU Institutional Affairs at Microsoft, said that the growing integration of ICT across various sectors,
We need more highly specialised computer engineers. The ICT sector currently lacks people with the right skills to accomplish a number of functions, from developing software applications and security systems,
to providing lowerend support services such as systems and network administration and user support, Schaart told Euractiv.
No image problem Higgins said that employers face a big challenge in communicating what sort of exciting job opportunities the industry is providing, especially since fewer people study computer science.
Higgins added that many young people are unaware that a computer programme degree can lead to jobs making music videos, computer games or developing medical technology.
Less than 10%of app developers are female and only 20%of computing graduates each year are women.
Varying national rules on taxation and data protection ran the risk of stifling the growth these tech businesses can create,
Take data protection, he said, there is one EU data commissioner but the legislation in countries is still different.
When we go to Germany, the legislation is completely different. So why do you have the European one?
Startup Europe introduced a commission one-stop website for entrepreneurs. Other forums include the Web Investors Forum,
a crowdfunding network and Tech Allstars group run by DG Connect. The conference was chosen to Continued on Page 5 Euractiv ESKILLS FOR GROWTH SPECIAL REPORT 5-9 may 2014 5 launch Watify
Big data is a goldmine for companies Computer algorithms are better at diagnosing severe cancer than humans,
and big data can predict crimes before they are committed and earn businesses money. Kenneth Cukier is data editor at The Economist
and co-author with Viktor Mayer-Schönberger of Big data: A Revolution That Will Transform How We Live Work
and Think. Translated into 20 languages, the book was a New york times Bestseller. He spoke to Euractiv's James Crisp about what big data can teach us.
What is big data? Well there's no single definition, which is probably a good thing, because to define it is to constrain it.
Broadly speaking, though mankind has more information now than ever, and these huge amounts of data can teach us things that are extremely interesting,
in fact things we would never have been able to find out with smaller amounts. That's done by placing different algorithms onto these large amounts of data.
Let me give you an example. Google handles more than a billion searches in the United states every day and stores them all.
It took the 50 million most commonly searched terms between 2003 and 2008 and compared them against historical influenza data from the Centers for Disease Control and Prevention.
The idea was to see whether certain searches made in a certain area coincided with flu outbreaks.
Google's system could work in near-real time. Google ran all the terms through an algorithm a way of making a calculation-that ranked the terms by how well they correlated with flu outbreaks.
Then, the system tried combining the terms. With a billion searches a day it would have been impossible for a person to guess which ones might work best.
After running half a billion calculations against their data Google identified 45 terms that strongly coincided with CDC's data on flu outbreaks.
The Google trends method has been criticised, because its been wrong in some instances. However that is not the whole story.
It's only been wrong like a weather forecast is wrong, when it is sunny when it is meant to be 90%certain of rain.
The autopilot system on their airplanes collects data. Some of the data it collects has improved actually the accuracy of German weather forecasting by 7%
which is a considerable improvement. Lufthansa now sells that data to a meteorological company, which is a great example of how big data can be commodified.
So big data can be sold? Absolutely. In fact big data is a potential gold mine. There are a few forward-thinking companies who have realised they can sell the data they collect as they go about their everyday work.
It will be a revenue generator. In the future I expect to see companies employing data or chief information officers,
who will be responsible for this. It's not just companies. In the future, each of us will be able to sell our data.
People will upload data to online data exchanges, neutral platforms which can bring the data to the marketplace for a fair price.
And there will be a market for this data as people realise the enormous potential of big data.
Will there be an impact on how people work? There will be a significant impact. This will be a revolution in the workplace.
Both white colour and blue collar jobs will be replaced by big data, but that destruction will also create jobs.
It's a demonstrable fact that a computer algorithm is better at diagnosing severe cancer than a human.
But in in a world where data shape decisions more and more, what purpose will remain for people,
or for intuition, or for going against the facts? Personally, I believe there will always remain a need for the human touch.
But it is hard to predict the impact of the big data revolution. What can policymakers do to ensure that the power of big data can be exploited?
The issue of data privacy and protection has been deservedly getting a lot of attention recently. What needs to happen is a change in law to reflect the reality of this type of statistical collection
and ensure it is aligned with our values. Current laws are broadly based on the idea of notice and consent.
Essentially, this means that if you want to use someone's data, you have to tell them what you are collecting and why.
That isn't really feasible with big data. Continued on Page 7 Euractiv ESKILLS FOR GROWTH SPECIAL REPORT 5-9 may 2014 7 Boosting e-skills in European higher education requires political will at national level With 25%of adults in the European union
lacking the necessary digital skills to effectively use information and communication technologies, according to a report by the Organisation for Economic Cooperation and Development (OECD) published in autumn 2013,
the European commission is facing various challenges in order to bridge the competitive gap with the rest of the world.
On top of the differences with third countries, broad disparities are found between EU member states themselves,
the study showed with countries like Spain, Italy or Poland where almost one adult in five has no computer experience.
Age disparities were detected also with high school pupils having sometimes better skills than higher education graduates. From the lack of access to digital equipment in schools and higher education institutions to the lack of access to open education resources and effective e-skills, the European commission has identified a number of priorities for the coming years through its‘Opening up Education'strategy.
Digital divide A study by the Commission on ICT in education also showed dramatic results in EU countries:
or exercise softwares while 70%of teachers are asking for training to improve their digital skills.
In an attempt to reduce the digital divide looming over Europe, commissioners Neelie Kroes in charge of the digital agenda and Androulla Vassiliou,
it is impossible to know what purpose the data will be used for. Small data is like a waltz.
There's a clear tempo with known steps. Big data is like a mosh pit or jazz-improv.
No one knows what's coming next. So regulators need to support this new reality, not least because of the huge potential of big data.
We need to move from a notice and consent to a system of consent which allows a person to give consent,
for that data to be used and reused and reused without knowing what the specific purpose is.
What are the dangers of big data? Of course there are risks, and there will be challenging questions for us to answer as we enter this new reality,
Big data could be used to predict which people are most likely to commit murder. That throws up interesting questions.
There is an argument to suggest that the 2008 Financial crisis was in a way a crisis of big data.
But despite that I am convinced big data will change the world for the better. Continued from Page 6 Continued on Page 8 8 5-9 may 2014 SPECIAL REPORT ESKILLS FOR GROWTH Euractiv between member states
in order to adjust it to the digital economy. Every year, approximately 100,000 new vacancies are created in an attempt to fill the gap between the‘e-skilled south'and‘e-demanding north'of Europe.
Athens signs National Coalition for Digital economy Greece is also signing the National Coalition for the Digital economy,
The National Coalition for Digital economy is our commitment. We mean it when we say that the digital literacy is on the top of our agenda,
Greek minister for Education Konstantinos Arvanitopoulos, told Euractiv Greece that the EU is prepared not efficiently for the challenges of the digital economy,
and ensuring high-speed internet in all schools, he said. Regarding higher education, he stressed, students will benefit from the creation of e-courses
Need is the mother of innovation Chatzidakis noted that the revenues from big data are expected to amount to €16 billion on a global level,
The data mentioned is catalytic and shows us that this is the direction we need to move in,
and provides data, and other evidence that demonstrates how a business creates and delivers value to customers.
values and networks and alliances. 2. 2 Why Digital Business models The role of information technology and its relationship to the business has shifted over the last 20 years.
We have progressively transitioned from a focus on the design of information systems, to the design of IT-enabled business processes,
. While this attention to business models for digital platforms initially started in the networked digital industry (telecom, media, entertainment,
gaming. software, etc. it is increasingly being propagated to all industries whether healthcare, energy, retail, or financial services.
The information systems discipline has explored and explicated many of these differences. One of its most important conclusions is that technology
, organizational characteristics and technology 5 No Some Viscio and Pasternak (1996) Global core, governance, business units, services and linkages 5 No No Timmers (1998) Product/service/information
and financial aspects 4 No No Donath (1999) Customer understanding, marketing tactics, corporate governance and intranet/extranet capabilities 4 No No Mahadevan (2000) Value stream,
value network and competitive strategy 6 No No Gartner (2003) Market offerings, competencies, core technology investments,
and bottom line 4 No Some Hamel (2001) Core strategy, strategic resources, value network and customer interface 4 No No Petrovic et al.
objectives, value proposition, resource sources, success factors, channels, core competencies, customer segments, and IT infrastructure8 No No Applegate (2001) Concept,
Review and Synthesis into one fabric it no longer makes sense to talk about information technology as a tool
but today, riding on rails of application programming interfaces (APIS) and broadband fiber optics, we can‘‘mash up''digital services like Google's maps and Facebook's social newsfeed in no time and on a shoestring budget.
Digital business ecosystems enable the possibility of combining capabilities across boundaries into innovative new offerings
originally prepared for the White house Conference on Understanding the Digital economy: Data, Tools and Research, held at the U s. Department of commerce, Washington, D c.,25-26 may 1999.
It draws upon joint work with Edward Steinmueller, and with Gavin Wright, and has had the benefit of detailed editorial comments from Erik Brynolfsson.
Forthcoming in Understanding the Digital economy, eds. E. Brynolfsson and B. Kahin (eds. MIT Press. Please do not reproduce without author's expressed permission.
Fax: 44+(0) 1865+279299; E-mail:<<paul. david@economics. ox. ac. uk>Understanding the Digital economy's Evolution and the Path of Measured Productivity Growth:
Present and Future in the Mirror of the Past 1 1. The Computer Revolution, the"Productivity Paradox"and the Economists Over the past forty years, computers have evolved from a specialized and limited role in the information processing
and communication processes of modern organizations to become a general purpose tool that can be found in use virtually everywhere,
today computing equipment is to be found on the desktops and work areas of secretaries,
In the process, computers and networks of computers have become an integral part of the research and design operations of most enterprises and, increasingly, an essential tool supporting control and decision-making at both middle and top management levels.
In the latter half of this forty year revolution, microprocessors allowed computers to escape from their boxes,
since the late 1980's. It was at that point, in the midst of the personal computer revolution,
that mounting concerns about the absence of an evident link between progress in digital information technologies
"The precipitating event in the formation of this"problematic"view of the digital information technology was an offhand (yet nonetheless pithy) remark made in the summer of 1987 by Robert Solow, Institute Professor at MIT and Economics Nobel laureate:"
"You can see the computer age everywhere but in the productivity statistics.""1 Almost overnight this contrasting juxtaposition achieved the status of being treated as the leading economic puzzle of the late twentieth century,
July 12, 1987, p. 36.2 observers, the Chairman of the Fed viewed the rising volume of expenditures by corporations for electronic office and telecommunications equipment since the late 1980's as part of a far-reaching technological and economic transformation in
as a consequence, the emergence of modern computer, telecommunication and satellite technologies have changed fundamentally the structure of the American economy.
even if the information technology revolution has the potential to significantly raise the rate of growth of total factor productivity (TFP) in the long run,
It could be maintained that there is little that is really novel or surprising in the way in which the rise of computer capital,
arguing that the imputed gross earnings on hardware and software stocks amount to such a small fraction of GDP that the rapid growth of real computer assets per se can hardly be expected to be making a very significant contribution to the real GDP growth rate. 6 But,
however valid an observation that might be, it fails to satisfactorily dispel the surprise and mystery surrounding the collapse of the TFP growth rate. 7 5see Abramovitz and David 1973, David 1977, Abramovitz 1989.
Ch. 4, Table 4-2. The 1987-1993 growth rates of inputs of computer hardware and software (allowing for quality improvements) are put at approximately 17 and 15 percent per annum
moreover, assume that investments embodying information technology earn only a normal private rate of return and do not yield significantly higher social rates of return due to externalities and other spillover effects.
and the private rates of return on this the new information technology and all of its networked applications. 4 Economists'reactions to questions concerning the anomalous slowdown of TFP growth
or (2) there has been a vast overselling of the productivity-enhancing potential of investments in computers
and related information equipment and software--due in part to misplaced technological enthusiasm, and also to exaggeration of the relative scale of those capital expenditures,
and so better understand their bearing upon the likely future productivity performance of the digital economy. Having persisted since 1989 in advancing the latter, regime transition interpretation of the so-called productivity paradox,
and therefore holding to the cautious optimist position in regard to the computer revolution's potential economic impact,
My approach to understanding the implications of the emerging digital economy continues to rest upon the idea that we are in the midst of a complex, contingent and temporally extended process of transition to a new, information intensive techno-economic regime;
therefore, that the supplanting of the Fordist regime by one developed around digital information processing and its distribution via electronic and electro-optical networks has turned out to be an affair in
the future may well bring a strong resurgence of the measured total factor productivity residual that could be attributed reasonably to the exploitation of digital information technologies.
The development and exploitation of digital information like previous profound historical transformations based upon new general purpose engines, turns out to entail a complicated techno-economic regime transition
In section 4 the discussion takes up some of the technological realities that justly can be said to underlie disappointments with the impact of computers upon the more readily measurable forms of task-productivity.
The argument here is that the historical course of the development of the personal computer as a general-purpose machine has not been conducive to enhancing productivity of the sort that can be gauged by conventional measurement approaches.
particularly that of the diffusion of the electric dynamo, may justifiably be used as a source of insights into the dynamics of the digital economy and its productivity performance.
and computer productivity paradox are first and foremost consequences of a mismeasurement problem must produce a consistent account of the timing
but, before tackling less tractable conceptual questions we should briefly review their bearing on the puzzle of the slowdown and the computer productivity paradox. 2. 1 Over-deflation of output:
and thereby help us to resolve the information technology paradox, would be some quantitative evidence that the suspected upward bias in the aggregate output deflators has been getting proportionally larger over time.
Gordon (1998a) presents more finely disaggregated data on labor productivity, which reveals the pervasiveness of the slowdown. 9 pronounced between the period 1948-66 and 1966-89.
and there is some basis for believing that during the past two decades these may well have become more pronounced in their effect on the accuracy of the official price deflators.
New information technologies, and improved access to marketing data are indeed enabling faster, less costly product innovation,
manufacturing process redesign, and shorter product life cycles. This has been a central theme in the business and economics literature on modern manufacturing at least since the 1980's. 15 The increasing proliferation of new goods and its connection with the application of computers,
electronic networks and other new technologies has been identified as forging a whole new paradigm that makes possible the delivery of custom-designed products to the masses--at ever lower prices--a phenomenon for which the accepted descriptive phase is mass
, personal computer models, which currently number over 400, or computer software titles, the count of which is in the neighborhood of a quarter of a million),
the multiplication of the number of models available for consumers to chose among within preexisting product classes is a striking manifestation of this phenomenon.
By combining this with data from Bailey and Gordon (1988) on the rising number of products stocked by the average U s. grocery supermarket,
It should not be surprising that the accuracy of a statistical system designed to record productivity in mass production
Of course, some progress has been made in resolving the computer productivity paradox by virtue of the introduction of so-called hedonic price indexes for the output of the computer and electronic business equipment industries themselves.
Thus the hedonic correction of computer and related equipment prices has done wonders as a boost to the growth rate of output
the hedonic deflation of investment expenditures on computer equipment contributes to raising the measured growth of the computer capital services,
The implied rise in computer-capital intensity, and therefore in overall tangible capital-intensity, supports the growth rate of labor productivity in those sectors.
The first involves the surprising appearance of excess rates of return on computer capital. These appeared when economists sought to illuminate the macro-level puzzle through statistic studies of the impact of 20 The difference between the measured TFP performance of the computer-producing
and the computer-using sectors of the economy, which emerges starkly from the growth accounting studies by Stiroh (1998),
may be in some part an artifact of the distorting influence of the Bureau of Economic Analysis use of hedonic price deflators just for the output of the industry producing computer equipment.
See, e g. Wykoff (1995) for an evaluation of other dimensions of the distortions this has created in comparisons of productivity performance. 12 IT at the microeconomic level,
The contrast between the strong (cross-section) revenue productivity impacts of observed computer investments and the weaker (time series) effects gauged in terms of task productivity,
In view of the rapid rate of anticipated depreciation of capital value due to the high rate (circa 20 percent per annum) at which the price-performance ratio of new computer equipment has been falling,
It also is the case that subsequent investigations along the same lines have found that there were additional intangible investments that were correlatives of high information technology-intensity.
and the market valuation of computer-intensive firms for concluding that the diffusion of information technologies among large business firms has entailed substantial levels of intangible asset formation. 23 The latter,
which is becoming increasingly widespread as digital information technologies diffuse throughout the economy, deserves further consideration. 3. 2 Leaving out investments in organizational change:
revised 1999) report that computer usage is associated with very high calculated values of Tobin's q,
and the advent of digital information processing technologies in particular, having stimulated the creation of new software assets within the learning organizations,
The problem of non-market production of intangibles in the form of computer software was relatively more serious in the mainframe era than it has subsequently become
if firms are to effectively exploit the enhanced capabilities of new information technologies. Thus, the narrow scope of conventional output measures may persist for some time in failing to register the relative rise of this form of asset production,
and so contribute to a downward drag on the measured productivity growth rate. 4. Troubles with Computers: Effects of General Purpose Machines on Task-Productivity Laying the whole burden of explanation on the notion that existing concepts and methods are inadequate in accounting for the effects of the computer revolution is,
however, not satisfactory. Even if a large share of these effects vanish into territory inadequately mapped using existing statistical measurement approaches,
it is puzzling why more conventional indices of productivity in branches of industry that previously were regarded not to be"unmeasurable"have not been affected more positively by the advent of new information technologies.
that there are real problems in delivering on the productivity promises of the computer revolution. 4. 1 Component performance
and system performance A common focus of attention in the computer revolution is the rapidity with
For software designers, Moore's law promises that new computational resources will continue to grow
even if the user adopts the new technology, the learning time in mastering new software, the greater number of choices that may need to be made to navigate a growing array of options
and the longer times required for the more complex software to be executed will offset part or all of the gains from increasing component performance.
It is recognized now widely that the costs of personal computer ownership to the business organization may be tenfold the size of the acquisition costs of the computer itself. 24 Many of these costs are unrelated to the 24 Some of these costs are recorded directly
while others are part of the learning investments being made by firms in formal and informal on the job knowledge acquisition about information technology. 14 performance of microprocessor components and for many applications,
the use of personal computers is unaffected therefore relatively by microprocessor performance improvements. From a productivity measurement standpoint, the relatively constant unit costs imposed by personal computer ownership have been compounded further by the costs of the continuing spread of the technology throughout the organization.
To be sure, employees are being given general purpose tools that may be and often are useful for devising new ways to perform their Work at the same time, however,
it is apparent to most sophisticated users of computers that the extension of these capabilities also creates a vast new array of problems that must be solved to achieve desired aims.
In any case, it is expected now that a modern organization will provide reasonably sophisticated information technology as part of the office equipment to which every employee is entitled.
file server support and standards for archiving and backup of electronic copies of documents all now enter into the task of producing a business letter.
The existence of new capabilities suggests the potential for creating greater order and precision, whereas the reality of deploying these capabilities may substantially raise the unit costs of executing the letter-writing task.
the ancillary complications of preparing to perform a computer-assisted task may fill the time previously allotted for its completion.
inescapable burden imposed by the very nature of the new information technology, and so destined to perpetuate itself as that technology become more and more elaborate?
and recorded are they likely to find their way into the adjunct studies that are performed to test the accuracy of more abstract productivity measurement systems. 26 The following draws upon a more detailed treatment of the productivity implications of the general purpose formulation computer technology
that has characterized the personal computer revolution, provided by David and Steinmueller (1999: Section 7). 15 4. 2 The general purpose computing trajectory,
from mainframes to the PC revolution The widespread diffusion of the stored program digital computer is intimately related to the popularization of the personal computer as a"general purpose"technology for information processing,
and the incremental transformation of this"information appliance"into the dominant technology of information processing.
The historical process by which this was achieved in the case of the personal computer has had major implications,
not only for the success of personal computer technology and the hardware and software industries based upon it,
For the personal computer as for its parent the mainframe, and its cousin the minicomputer, much adaptation and specialization has been required to apply a general purpose information processing machine to particular purposes or tasks.
Such adaptations have proved costly, especially so in the case of the personal computer. It is something of an historical irony that the core elements of the adaptation problems attending this GPT's diffusion into widespread business application may be seen to derive from the historical selection of a trajectory of innovation that emphasized the"general purpose"character of the paradigmatic
hardware and software components. The origins of the personal computer required the invention of the microprocessor
which was a technical solution to the problem of creating a more"general purpose"integrated circuit to serve a specific purpose, a more flexible portable calculator--a foundational application that ultimately proved uneconomic due to the lower relative costs of more specialized
integrated circuits. During the 1970's it was recognized that the microprocessor provided a general solution to the problem of the electronic system designer confronted by an ever-growing array of application demands.
During the same period, efforts to down-scale mainframe computers to allow their use for specialized control
and computation applications supported the birth of the minicomputer industry. These two developments provided the key trajectories for the birth of the personal computer.
As microprocessors became cheaper and more sophisticated and applications for dedicated information processing continued to expand,
a variety of task-specific computers came into existence. One of the largest markets for such task specific computers created during the 1970's was dedicated that for word-processing systems,
which appeared as an incremental step in office automation, aimed at the task of producing documents repetitive in content
or format such as contracts, purchase orders, legal briefs, and insurance forms, that could be modified quickly and customized based upon stored formats and texts.
But, dedicated word processors were displaced rapidly by personal computers during the mid-1980's, as the latter were perceived to be more"flexible
"and more likely to be"upgrade-able"as new generations of software were offered by sources other than the computer vendors. 27 The dedicated word processor's demise was mirrored by development in numerous markets where dedicated"task-specific
"data processing systems had begun to develop. Digital Equipment Corporation, the leading minicomputer manufacturer retreated from its vertical marketing strategy of offering computer systems specifically designed for newspapers, manufacturing enterprises, and service companies;
it specialized instead in hardware production, leaving the software market to independent software vendors. 28 This process,
which had begun in the late 1970's as an effort to focus corporate strategy, greatly accelerated during the 1980's with the advent of the large-scale personal computer platforms 27 Outside sourcing of applications software represented a significant departure from the proprietary software strategy that the suppliers of dedicated word-processing systems had sought to implement during the 1970's,
and which left them unable to meet the rapidly rising demands for new, specialized applications software.
Moreover personal computers could use many of the same peripherals, such as printers: because the widespread adoption of the new technology raised the demand for compatible printers,
the dedicated word processors found themselves unprotected by any persisting special advantages in printing technology. 28similar decisions were made by all of the U s. computer manufacturers.
See the discussion in Steinmueller (1996). 16 united under the IBM PC standard or utilizing that of Apple's Macintosh.
The"general purpose"software produced for these two platforms not only discouraged task-specific software, it also created a new collection of tasks
and outputs specifically driven by the new capabilities such as"desk top publishing"(typeset quality documents),"
"presentation graphics"(graphic artist quality illustrations for speeches and reports), and"advanced word processing"(the incorporation of graphics and tables into reports).
The disappearance of task-based computing in favor of general purpose personal computers and general purpose
(or multipurpose) packaged software was completed thus largely during the 1980's. 29 The early evolution of the personal computer can
therefore be seen as cutting across the path of development of an entire family of technically-feasible information processing systems focused on the improvement of"task-productivity"in applications ranging from word processing to manufacturing operations control.
using a small fraction of their capabilities to emulate the operations of their less expensive (and less intelligent) cousins, the"intelligent"display terminals.
By 1990, then, the personal computer revolution while seizing control of the future of information processing had left carnage in its wake,
The revolutionaries had kept their promise that the PC would match the computing performance of the mainframes of yesteryear.
the spread of partially networked personal computers supported the development of new database and data entry tasks, new analytical and reporting tasks,
The local activities within the organization that were identified as candidates for personal computer applications often could
through the intermediation of personnel with appropriate information system access, receive an array of service quality improvements.
The availability of 24-hour telephone reservation desks for airlines, or the construction of worldwide networks for securing hotel, rental automobile,
what remained was a deep chasm between the"mission critical"application embedded in mainframe computers and the growing proliferation of personal computers.
The primary bridge between these application environments was the widespread use of the IBM 3270, the DEC VT-100 and other standards for"intelligent"data display terminals, the basis for interactive data
display and entry to mainframe and minicomputer systems. From their introduction, personal computers had software enabling the emulation of these terminals, providing further justification for their adoption. 30 For an historical account of a potential alternative path of user-driven technological development
one that entailed the reorganization of businesses as an integral aspect of the computerization of their activities,
which general purpose personal computers came to be furnished with"general purpose"personal computer software. It may be accepted that general purpose hardware
and software in combination did"empower"users to think of"insanely great"new applications--to use the rhetoric of Steve jobs,
one of Apple computer's cofounders. On the other hand, however, the disruptive effects of relentless innovation are inimical to the stabilization of routine and the improvement of efficiency of routine performance
which that brings. Moreover, at best only a very small number among the innovative software programs turn out to address the sort of mundane tasks that are sufficiently common to permit them to make a difference to the performance of a large number of users.
But the ubiquity and complementary of these dual"general purpose engines--personal computer hardware and packaged software--has the side-effect of foreclosing the apparent need for more specialized task-oriented software development. 31 Worse still
by the mid-1990's, the competition among packaged software vendors for extending the generality of their offerings became a syndrome with its own name:"
"creeping featurism"or"featuritis.""Making light of these developments in 1995, Nathan Myrvhold of Microsoft suggested that software is a gas that"expands to fill its container...
After all, if we hadn't brought your processor to its knees, why else would you get a new one?
32 Although offered in jest, this comment reflects the serious belief of many in the technological community that continuous technological progress
and upgrading of computers, with which they are engaged centrally, is ultimately for the benefit of the user.
From their perspective, the key to future success lies in establishing increasingly powerful platforms for new generations of software,
and hence elaborate a technological and organizational regime built around a new general purpose technology, the microelectronic digital computing engine--or, for simplicity, the computer.
Chs. 2-4, 12.32 As quoted in W. Wayt Gibbs, Taking Computers to Task, Scientific American, July,
By drawing an explicit analogy between the dynamo and the computer David (1991) sought to use the U s. historical experience to give a measure of concreteness to the general observation that an extended phase of transition may be required to fully accommodate
dynamos and computers Although central generating stations for electric lighting systems were introduced first by Edison in 1881,
Recent estimates of the growth of computer stocks and the flow of services therefrom are consistent with the view that
when computers had evolved not yet so far beyond their limited role in information processing machinery, computer equipment and the larger category of office, accounting
and computing machinery (OCAM) were providing only 0. 56 percent and 1. 5 percent, respectively, of the total flow of real services from the (nonresidential) stock of producers'durable equipment. 34 But,
the growth rate for 1899-1914 is almost precisely the same as that for the ratio of computer equipment services to all producers'durable equipment services in the U s. Does the parallel carry over also,
which has been experienced during the 1979-1997 phase of"the computer revolution";"it took 25 years for the electrified percent of mechanical drive in manufacturing to rise from roughly 0. 5 percent to 38 percent,
the same quantitative change has been accomplished for the computer within with a span of only 18 years.
because the underlying estimates take into account the changing quality of the computer stock; whereas the electrification diffusion index simply compares horsepower rating of the stock of electric motors with total mechanical power sources in manufacturing.
the estimated average rate of growth of the ratio of computer equipment services to all producers'durable equipment services in the U s. turns out to be precisely the same,
Some economists who have voiced skepticism about the ability of computer capital formation to make a substantial contribution to raising output growth in the economy point to the rapid technological obsolescence in this kind of producer durables equipment
pp. 101-103) for a useful comparison of alternative estimates of net and gross basis computer service"contributions to growth".
20 electrification of industry as to render illegitimate any attempt to gain insights into the dynamics of the computer revolution by examining the economic history of the dynamo revolution that took place in the half century before 1929.
which the price-performance ratio of computer equipment has been plummeting so far exceeds the rate of fall in the real unit costs of electric energy that there is little
Table 5-2) estimates the rate of change in real prices of computer services for 1987-1993 to have been-7. 9 percent per annum,
and quality adjusted computer services hardly warrants dismissing the relevance of seeking some insights into the dynamics of the transition to new general purpose technology by looking back at the dynamo revolution.
In arguing for the opposite view Triplett (1998) suggests that Sichel's (1997) estimates of the price of computer services--and, by implication,
He contends that the hedonic price indexes for computers that come bundled with software actually would have fallen faster than the (unbundled) price-performance ratios that have been used as deflators for investment in computer hardware.
Sichel's (1997) price indexes of quality adjusted computer services (from hardware and software) would seriously underestimate the relevant rate of decline.
But, Triplett's argument seems to suppose that operationally relevant computer speed is indexed appropriately by CPU-speed,
whereas many industry observers have pointed out that the bundled PC operating system has grown so large that more processing power does not translate into more effective operating power.
Furthermore, in the same vein it may be noticed that the slower rate of fall in computer services prices as estimated by Sichel (1997) are more in accord with the observation that applications software packages also have ballooned in size,
that CPU speed may be weighted too heavily by the hedonic indexes for hardware, inasmuch as the utility of (net) computer power 37 Fortuitously,
these dates bound the period in which the possibility of a universal electrical supply system emerged in the U s as a practical reality,
and that over much of the period since the 1960's the stock of legacy software running on mainframes continued to grow,
without being rewritten to optimally exploit the capacity available on the new and faster hardware. Finally, a deeper,
and equally deserved comment may be offered regarding the casual dismissals of the regime transition hypothesis on the grounds that the analogy between computer
which prices associated with electricity and computer services. Such attempts are themselves instances of the misuse of historical analogies.
computer and dynamo, once again While there still seems to be considerable heuristic value in the historical analogy that has been drawn between"the computer and the dynamo,"a cautious,
when suggesting (in 1989-1990) that it perhaps was still too soon to be disappointed that the computer revolution had failed to unleash a sustained surge of readily discernable productivity growth throughout the economy.
nor does it claim anything whatsoever about the future temporal pace of the computer's diffusion.
One cannot simply infer the detailed future shape of the diffusion path in the case of the digital information revolution from the experience of previous analogous episodes;
which still lie before us in time. 6. Historical Perspectives on the Growth of Measured Productivity in the Digital economy 38 See David (1991a), Technical Appendix for this demonstration. 22 The historical trajectory of computer technology development, long overdue for change,
None of these developments are likely to displace the use of personal computers in the production
which the general purpose computer was invented originally. What they do promise are greater and more systematic efforts to integrate information collection, distribution and processing.
and develop new methods for information system design. Firstly, a growing range of information technologies has become available that are purpose-built
and task-specific. Devices such as supermarket scanners were applied to a wide range of inventory and item tracking tasks
and related data logging devices were to be found in the hands of maintenance, restaurant, and factory workers.
The environmental niches in which these devices were able to achieve a foothold were ones where the mass-produced personal computer was neither appropriate nor robust.
These more"task specialized"devices have become sufficiently ubiquitous to provide the infrastructure for task-oriented data acquisition and display systems,
Secondly, the capabilities of advanced personal computers as network servers have become sufficiently well developed that it is possible for companies to eliminate the chasm between the personal computer
and mainframe environment by developing the intermediate solution of client-server data processing systems. This development is still very much in progress
and reflects the more complete utilization of the local area networks devised for information and resource sharing during the personal computer era.
In this new networked environment, the re-configuration of work organization becomes a central issue; strategic and practical issues surrounding the ownership
and maintenance of critical company data resources must be resolved, and these often are compelling enough to force redesign of the organizational structure, Thirdly,
and related to the foregoing, the development of Internet technology has opened the door to an entirely new class of organization-wide data processing applications as well as enormously enhanced the potential for collective and cooperative forms of work organization.
Applications and their maintenance can be controlled by the technical support team who would previously have been responsible for the company's centralized data resources.
The common standards defining Internet technology have the fortuitous feature that virtually all personal computers can be configured similarly
The"general purpose"trajectory followed by the spectacular development of personal computer technology has reduced greatly the price-performance ratio of the hardware,
as personal computers were added to existing mainframe capacity, rather than substituted for it, and, indeed, were utilized under by being allocated the role of intelligent terminals.
An analogous structural change has been envisaged, based on the development of digital information appliances--hand-held devices or other robust specialized tools that are carried on belts,
and telecommunications components that allow them to be linked through sophisticated networks to other such appliances, mainframe computers and distributed databases,
may be seen in the expansion of inter-organizational computing for the mass of transactions involving purchase ordering,
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