Deconstructing the Computer Report of a Symposium (2005) / Chapter Skim
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Panel V: What Have We Learned and What Does It Mean?
Panel V: What Have We Learned and What Does It Mean?
Pages 87-93
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From page 87... ...
He raised a question about the future of the information technology industry that he had often discussed with colleagues at IBM: "Are we going at some point to slow down the rate of innovation, or are we not going to slow it down but cross some `good-enough' thresholds, so that some parts of the industry will become mature whereas other parts perhaps will not? " If it were the latter vision that turned out to be the more prescient, he stated, "it means we've picked the low-hanging fruit and filled up the valleys with rainwater, and perhaps the way you create value changes." The industry had in the past been able to create value by applying microscopic, core-level technology at the bottom of the food chain and having the value trickle up to the top, the only place where it matters to customers; it was this, he noted, that might be in for a change.
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From page 88... ...
He noted that IBM's single highest-volume processor-chip business was in game systems, where the company was partnering with Sony and Toshiba. Since the microprocessor that gets the most design resources is the one that is most efficient and most advanced, he said, even though IBM could charge more for a mainframe microprocessor -- and it might be able to make the best system, because the system is very complex -- there was "no way that that market could afford the engineering bill to make the best microprocessor." Mainframe microprocessors 10 years hence would probably resemble processors developed for the "consumer-gaming/handheld part of the industry," whose customer base was so much larger than the amount of development investment that could be made in it as a fraction of revenue was much higher.
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From page 89... ...
BLS calculates productivity using data from a variety of sources on, among other factors, revenues, prices, and labor hours. In the four-digit industrial classifications that comprise the computer and semiconductor area, the strongest measured labor-productivity growth was 42 percent per year for semiconductors and related devices, a rate she called "pretty phenomenal compared to the 1.8 percent for the economy as a whole." The data also showed labor productivity growth of 37 percent per year on average for electronic computers, 17 percent per year for computer peripheral equipment not elsewhere classified, and 15 percent per year for computer storage devices.
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From page 90... ...
While the way prices and real output are measured is very important to BLS in general, also important is using price measures that are consistent over a long period, because looking at productivity means looking at trends over time. Turning to the question of workers, about which she noted little had been said in the course of the day, Dr.
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From page 91... ...
He pronounced himself "not too sanguine" on significant results' being obtained from analyses of the impact of software changes on customers, saying that in the complex world of the business environment it would be hard to hold constant all that would need to be held constant in order to perform the experiment of putting in a software innovation and seeing what its effect was. "I'd like to see somebody try it," he said, "but if I had government research money to hand out, I'm not sure that would be one I'd think would be really profitable." The idea had, in fact, put him in mind of a presentation he had seen on measuring the contribution of consulting firms to their clients' profits -- a "great idea," but one that ignored the complexity of the world in general and, in particular, the manifold reasons for which firms hire consultants.
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From page 92... ...
He said he had seen a significant shift on the horizon that would make more applicable to the real world a basic tenet of economic theory: that in a competitive market correct information is available immediately to all the players. Making price comparisons during the previous week using the Internet, he had found the identical computer peripheral having a price span of over 100 percent; on airline fares he found a spread of a factor of five.
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From page 93... ...
Alluding to personal frustration with the quality of data he has collected and worked with, he indicated that he had been intrigued when speakers talked about "the possible use of ROI calculations either by the seller or the buyer" of information technology, as well as about "payback data -- `we paid for it in six days or six months,' or whatever." He said, however, that the data referred to had sounded "very proprietary" and characterized one speaker's attitude thus: "We wouldn't tell you even if we had it, and I'm not sure I'm going to tell you whether we have it." Noting it was the job of many in the room to make sense of productivity gains and to determine what caused them, he asserted that success would depend on "some government agency collecting some data it's not collecting now using a classification system that probably doesn't yet exist." He asked whether there had been any progress in that direction and what sort of progress might be expected over the next five to 10 years.
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