5
Economic Impact of AMO Science

The panel could determine no accepted protocol for addressing the issue of the economic impact of AMO science. Economists appear not to agree among themselves on how to assess such impact or the "return on investment of research dollars." Therefore, within the human and financial resources available for this assessment, the panel has adopted a simple approach for viewing the impact, recognizing that more sophisticated perspectives might differ. Nonetheless, the approach taken demonstrates that AMO science has an impact on a sizable portion of the economy, and language used herein reflects this fact. For each of the areas considered, however, a number of different science and engineering disciplines also may have contributed substantially, and it is impossible in this limited assessment to define the role of each. There is thus no implication that AMO science exclusively enables all the commercial products or services listed, only that it is an important enabling factor.

Few if any fields of basic research directly produce marketable products or services. AMO science, however, plays a key role in many commercial areas; in some the role is obvious, in others it is not. In assessing the economic impact of AMO science, the panel can identify industries wherein AMO science plays an important enabling role, that is, those in which the commercial activity would not exist without the contributions of AMO science (e.g., fiber-optic communications and integrated circuit manufacturing). In a second class of commercial activities, the techniques and contributions of AMO science considerably enhance and add value to the product but are not essential to its existence (e.g., production of industrial chemicals, pharmaceuticals, and photographic equipment). A third class of commercial activities (primarily in the service sector) profits through



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Atomic, Molecular, and Optical Science: An Investment in the Future 5 Economic Impact of AMO Science The panel could determine no accepted protocol for addressing the issue of the economic impact of AMO science. Economists appear not to agree among themselves on how to assess such impact or the "return on investment of research dollars." Therefore, within the human and financial resources available for this assessment, the panel has adopted a simple approach for viewing the impact, recognizing that more sophisticated perspectives might differ. Nonetheless, the approach taken demonstrates that AMO science has an impact on a sizable portion of the economy, and language used herein reflects this fact. For each of the areas considered, however, a number of different science and engineering disciplines also may have contributed substantially, and it is impossible in this limited assessment to define the role of each. There is thus no implication that AMO science exclusively enables all the commercial products or services listed, only that it is an important enabling factor. Few if any fields of basic research directly produce marketable products or services. AMO science, however, plays a key role in many commercial areas; in some the role is obvious, in others it is not. In assessing the economic impact of AMO science, the panel can identify industries wherein AMO science plays an important enabling role, that is, those in which the commercial activity would not exist without the contributions of AMO science (e.g., fiber-optic communications and integrated circuit manufacturing). In a second class of commercial activities, the techniques and contributions of AMO science considerably enhance and add value to the product but are not essential to its existence (e.g., production of industrial chemicals, pharmaceuticals, and photographic equipment). A third class of commercial activities (primarily in the service sector) profits through

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Atomic, Molecular, and Optical Science: An Investment in the Future TABLE 5.1 Industries in Which AMO Science Is an Important Enabling Factor Industry Total 1991 Sales ($B) Gas-discharge lighting 2.6 Semiconductor devices 27.8 Industrial and analytical equipment   Laboratory instruments 13.4 Measuring and controlling instruments 10.5 Electronic information recording and storage (image data) 2.2 Information services on networks and electronic data storage media 10.2 Data processing and network services 35.6 Computer equipment and peripherals   Supercomputers 1.5 (worldwide) Mainframe 27.0 (worldwide) Mid-range 26.0 Workstations 12.0 Personal computers 32.0 Portables 7.0 (worldwide) Local area networks 8.0 (worldwide) Magnetic storage equipment 3.0 Optical storage equipment 0.9 Laser printer equipment 6.3 Other printers 5.6 Telecommunications services 161.0 Radio communications and detection equipment   Radar, sonar, LIDAR, navigation, infrared/ultraviolet, electronic warfare 31.6 Communications systems and equipment (fiber, microwave, satellite, land, marine, mobile) 17.5 Satellite communications equipment (ground-based) 1.3 Satellite communications equipment (satellites) 1.3 Commercial broadcasting equipment 1.8 Electronic kits, lasers, ultrasonic equipment particle accelerators, etc. 3.8 Fiber optics 1.7 Prerecorded music   Compact disks 3.9 All other media 4.3 Consumer electronics (radio, TV, audio, etc.) 7.7

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Atomic, Molecular, and Optical Science: An Investment in the Future Industry Total 1991 Sales ($B) Medical equipment   X-ray equipment 2.1 Other electromedical 5.5 Health care directly derived from AMO 25.0 (estimated) Nuclear magnetic resonance imaging—machine use   Nuclear magnetic resonance imaging—radiology services   X-ray tomography—machine use   X-ray tomography—radiology services   Microwave-based thermotherapy   Laser-based diagnostic, surgical, and therapeutic procedures   All procedures that involve internal inspection with fiber-optic devices including endoscopes, laparoscopes, etc.   Laboratory analyses   TOTAL 500.1 savings and productivity enhancements resulting from AMO science in a peripheral, but economically significant, way (e.g., savings in retail trade via reduction in labor cost and enhanced inventory control through bar code scanning at point-of-sale terminals). While the divisions among these three classes are not unambiguously drawn, Tables 5.1, 5.2, and 5.3 (data from U.S. Industrial Outlook 1992: Business Forecasts for 350 Industries, International Trade Administration, U.S. Department of Commerce, U.S. Government Printing Office, Washington, D.C., 1992) specify the economic activity in these three classes of U.S. industry in 1991. The economic impact of AMO science is significant. The GNP in 1991 was about $5,760B. Table 5.1 shows economic activity in which AMO science is an important enabling factor to be $500B. Table 5.2 totals the output of industries that are significantly enhanced by AMO science at about $634B, and Table 5.3 indicates an additional $114B of impact in other industries. Taken together, the tables indicate that AMO science significantly affects about 22% of the GNP. The areas of the GNP affected by AMO science are typically those having sizable annual growth rates, and one can therefore expect its importance to increase in future years. AMO science is critical, for example, in the manufacture of integrated circuits and the products that such devices enable. Integrated circuit manufacturing relies heavily on advanced optics, surface analysis, and materials processing by lasers, ion beams, and plasmas. The interaction with AMO science will increase

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Atomic, Molecular, and Optical Science: An Investment in the Future TABLE 5.2 Industries in Which AMO Science Is a Secondary Enabling Factor That Provides Enhanced Product Value Industry Total 1991 Sales ($B) Chemicals   Organic chemicals 66.1 Inorganic chemicals 21.7 Paints and allied products 13.2 Adhesives and sealants 5.7 Fertilizers and pesticides 16.3 Plastic materials 32.2 Plastic and rubber products 70.0 Drugs 59.0 Refined petroleum products 136.3 Electronic components other than semiconductors 34.5 Industrial controls 6.9 Printing machinery 3.1 Private biotechnology R&D (77% in health care) 2.3 Government-sponsored health care research 4.0 Advanced materials   Biotechnological materials 6.0 (estimated) Ceramics 10.0 (estimated) Powder metallurgical materials 2.0 Robotic equipment 0.5 Aerospace   Civilian aircraft 27.9 Military aircraft 16.0 Aircraft engines 23.7 Aircraft parts and equipment 22.2 Guided missiles and space vehicles 21.7 Other space-related equipment 4.9 Photographic equipment and supplies 23.2 Microfilm image recording and storage 1.4 Printing capital equipment 3.0 TOTAL 633.8

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Atomic, Molecular, and Optical Science: An Investment in the Future TABLE 5.3 Large Industries in Which AMO-Related Devices Have a Peripheral Impact with a Significant Dollar Value Industry Total 1991 Sales ($B) Estimated Impact of AMO Science ($B) Printing and publishing 161.0   Cost savings through laser platemaking, optical scanning, computer composition, laser printing for lithographic masters   16.0 Automobiles 133.0   Electronics   13.0 Emission monitoring and control   1.0 Contributions to manufacturing process   1.0 Retail sales 1,900.0   Savings in inventory control and management through bar code scanning   5.0 Savings in labor through bar code scanning   20.0 Health care 738.0   Savings due to computer and electronic information management   5.0 Trucking 257.0   Computer scheduling and satellite tracking of vehicles   3.0 Insurance, accounting, leasing, management and legal services 910.0   Savings due to computer and electronic information management   50.0 TOTAL   114.0 in the future as devices become small enough that quantum effects become important. Some economic consequences are not readily measurable, including the contribution that individuals educated in AMO science make when they switch fields, the ramifications of enhanced quality of communication and record-keeping permitted by microelectronics, the productivity gained because of the short recovery times from laser surgical procedures, and the savings in insurance and public assistance cost (not to mention the savings in human suffering) from, say, laser eye surgery to prevent blindness. In this assessment of economic impact, no attention has been paid to the impact on the economy of measurement and measurement technology, an area

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Atomic, Molecular, and Optical Science: An Investment in the Future that, as described in Chapter 2, is strongly dependent on AMO science. A 1967 study (R.D. Huntoon, ''Concept of a National Measurement System," Science 158 (October 6), 67-71, 1967) found that approximately 6% of the GNP was generated by measurement-related activity. Value added to the output stream of manufactured products was estimated to be another 6%. Though this study was conducted 25 years ago, there is no reason to believe that industry is less dependent on measurement technology today. As the global economy evolves, it is becoming increasingly apparent that the United States must rely on sophisticated products for its economic prosperity. The United States holds a competitive position in many high-technology areas, and those areas enabled by AMO science are generally those in which this country has excelled. The global economy is, however, intensely competitive, and being a world leader today does not ensure being an effective competitor tomorrow. The United States can retain a strong position in the global economy only if it maintains the infusion of new ideas and methods that research provides and can readily embody these ideas and methods in economically viable products. Clearly, future challenges will not be met by AMO (or any other) science alone, but progress in AMO science will be a central element in the configuration of our economic future.