the u.s. information industry creating the 21st century · · 2012-04-06technology edge has...

The U.S. Information IndustryCreating the 21st Century

Frank G. SplittVice President, EmeritusNorthern Telecom Inc.

March, 1993

Sponsored by theNational Engineering Consortium

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Table of Contents

In tro d u c tio n ................................................................................... 1

The Problem s Before U s ............................................................. 1

The Inform ation Industry ............................................................... 2

A Window Of Opportunity ........................................................... 3

The Opportunities To Be Seized ................................................... 4

Derivative Benefits, Costs and Funding ...................................... 4

W h a t T o D o ? ................................................................................... 5

W hat Is B eing D one? ..................................................................... 6

T he P ath F orw ard ....................................................................... 10

S u m m a ry ....................................................................................... 1 0

R e fe re n c e s ................................................................................. 11

A p p e n d ix ........................................................................................ 1 3

This paper was commissioned by the National Engineering Consortium on October 5. 1992 as a service to theInformation Industry. Additional copies may be obtainedfrom the National Engineering Consortium, 303 East WackerDrive, Suite 740, Chicago, Illinois 60601

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The U.S. Information Industry - Creating the 21st Century

Introduction and Purpose

Most of us are now aware of the fact that mounting problemswith the loss of market-share by U.S. technology-intensiveindustries have raised serious questions about the strength ofthese industries and the implications for America's economicwell-being and national security. The challenge to solvethese market and transition problems appears to be mademore difficult given the concurrent challenge to adopt to therapidly evolving globalization of the U.S. economy.

Many of us are also aware of the fact that we are becomingincreasingly dependent on information in all its forms as wegrapple with the challenges of sustainable development andrelated inter-generational problems. We are dependent onboth information and telecommunications for economicgrowth, for our individual welfare and for the survival ofindustry, business, political systems and likely...for the verysurvival of the human species.

Taken together, these circumstances present a formidablechallenge to the nation in general. and to the InformationIndustry in particular...they present tremendousopportunities as well. The business and academic sectors ofthe Information Industry arc positioned uniquely to respondto both the challenge and the opportunities. as well as tomake significant contributions to the economic vitality andoverall well-being of the nation and the quality of life of itscitizens. The purpose of this paper is to outline such aresponse with a call to action.

The Problems Before Us

Competitiveness - "America faces the difficult task oflearning how to compete in a new world economy just at apoint when America's economic strength is weaker than ithas been at any time since WorldWar II." So wrote Lester Thurow,Dean of MIT's Sloan School ofManagement in The Zero SumSolution, a mid-eighties wake-upcall.' Without question, this is anage of rapid and ubiquitous changewhere the world and ourcompetitors appear to be redefinedon a daily basis. Nonetheless, it issad to say we still seem to belearning how to compete. Thurow

"America's toughproblem is realizing

that there are problemsthat must be solved."

Lester TnurowDea,

MIT Sloar Schoo: of Manage'ner

resounded the alarm inHead to Head...where he says: "America's tough problem isrealizing that there are problems that must be solved.":

There exists widespread evidence that our nation'stechnology edge has eroded in one industry after another.For example, the consumer electronics and factoryautomation industries, birthed in the U.S., have beenpractically eliminated by foreign competition. Prior to 1992,the U.S. merchant semiconductor industry had shifted fromdominance to a distant second in world markets with foreigncompetitors aiming to replicate this scenario in computersand telecommunications.

Figure 1Critical Generic Technologies Driving U.S. Competitiveness

In The Information IndustryInformation Technologies

SoftwareStrong in Applications Software Artificial Intelligence.

Computer Modeling and Simulation Expert Systems,High Level Software Language Software Engineering

ComputersStrong in Neural Networks, Operating Systems, Processor

ArchitectureCompetitive in Hardware Integration

Human Interface and Visualization TechnologiesStrong in Animation and Full Motion Video, Graphics

Hardware and Software, Handwriting and SpeechRecognition. Natural Language. Optical CharacterRecognition

Database SystemsStrong in Data Representation. Retrieval and Update,

Semantic Modeling and InterpretationNetworks and Communications

Competitive in Broadband Switching, Digital Infrastructure,Fiber Optic Systems, Multiplexing

Portable Telecommunications Equipment and SystemsStrong in Transmitters and ReceiversCompetitive in Digital Signa! Processing Spectrum

Technologies

Electronic Components

MicroelectronicsStrong in MicroprocessorsCompetitive in Logic Chips Submicron TechnologyLosing badly or lost in Memory Chips

Electronic ControlsCompetitive in SensorsWeak in Actuators

Optoelectronic ComponentsWeak in Laser Devices, Photonics

Electronic Packaging and InterconnectionsLosing badly or lost in Multichip Packaging Systems,

Printed Circuit Board TechnologyDisplays

Losing badly or lost in Electroluminescent, Liquid CrystalPlasma and Vacuum Fluorescent

Hardcopy TechnologyWeak in Electro Photography. Electrostatic

Information StorageStrong in Magnetic Information StorageLosing badly or lost in Optical Information Storages

Source CouJc, o- ComDee-,-v esE

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The U.S. position in critical technologies has been studied bythe private sector Competitiveness Council chaired byMotorola Chairman George Fisher. InformationTechnologies and supporting Electronic ComponentTechnologies were clearly identified as drivers of economicgrowth and competitiveness in their 1991 report GainingNew Ground.' According to the report, U.S. InformationTechnologies range from strong to competitive in allmeasured areas. However, this position of strength iscompromised by considerable weakness in criticalsupporting technologies in Electronic Components (as shownin Figure 1). Our comparative advantage is thus vulnerableto attack by foreign competitors.

Another compelling argument to this effect has been madeby Ian Ross, President, Emeritus, AT&T Bell Laboratories.'Based on our current dilemma, Ross called for a reorderingof our national priorities with leadership in high-techindustry as a national goal. He also called for adequateinvestment in high-tech industry and for industries tocooperate in the pre-competitive phases of their activitieswhile competing vigorously in the world marketplace. Asummary of our search for a national technology strategywas provided by National Academy of Engineering PresidentRobert W. White in his September 22, 1992 President'sAddress.'

Vision - A root problem is the lack of a shared nationalvision and a high-technology agenda for the Information Ageand Beyond. An ancient biblical proverb says: "Without avision, the people will perish." Put another way, vision iscritical to our very existence...even as business andacademic organizations. We in the Information Industryhave achieved a great deal over the last few years.However, many of us have come to know that achieving ourvision implies more than just winning on financial resultsalone. It means being a leader and striving for excellence inall our undertakings. In particular. it means doing leadershiptypes of things in our relationships with our majorstakeholders: our employees, our customers, our suppliersand the communities in which we live and work. Within thecontext of Ross' appeal, it would also mean striving forexcellence in our pre-competitive relationships.

This moment in time presents an opportunity to reflect onthese hallmarks of leadership... to be both critical andcreative and so begin to frame an Information IndustryVision, a shared vision with an ennobling purpose for ourbusiness and academic enterprises to play a leading role inreshaping our nation and the world as well... a purpose thatcan not only help define the industry for the decade of the90s and beyond, but perhaps more importantly, inspire eachand everyone of us, our families, customers, and even thosein other industries.

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Public Awareness - A corollary problem is the general lackof public awareness of the potential benefits of InformationAge Technologies. Public enlightenment is the key togaining support and influencing public policy for a high-technology agenda. We need to tell the public a coherent andbelievable story... a story that goes beyond deregulation,liberalization, privatization, competition and technologyrevolution... as important as each of these may be. Not onlydoes the public need to know the tremendous value ofinformation management and telecommunications to thewhole of today's society, but also to their applications forsolutions to national as well as global problems and theleadership role that we, the Information Industry, can play inthe creation of our common future."-

The Information IndustryThe information world of 2000 and beyond will be fardifferent from the world of 1993. In less than ten years, newtechnologies, services and applications will enable majorchanges, transforming how our entire society operates.'"These changes will catalyze a structural redefinition of theentire Information Industry and the services provided by thevarious industry sectors.''' They will also providechallenges and opportunities for every individual andorganization in the Information Industry.

Presently, the U.S. Information Industry is in a period oftransition and transformation...attempting to respond to bothits challenges and its opportunities. Unfortunately, thisresponse has been impeded by the business sector'spredominant focus on short-term, bottom line performance.

"U.S. lead intelecommunications

is eroding rapidlyand lagging behind

other industrialnations..."

USC Center forTelecommunications Management

A recent stud) by the Universityof Southern California's Centerfor TelecommunicationsManagement (USC/CTM) findsthe U.S. long-held lead intelecommunications is "erodingrapidly" and lagging behindother industrial nations in anumber of key areas." Worseyet, considerable divisivenessand mistrust amongst the variousplayers has led to a state of

gridlock with almost all players unwilling to advance beyondthe status quo until their future prosperity is assured. A greatdeal of energy and precious resources are expended in effortsthat are at cross-purposes...we need only look to the numberof conflicting pieces of legislation before the U.S. Congress.A continuation of this scenario by entrenched specialinterests could result in a languishing, possibly stillborn,market or a situation where the combatants fight over whogets what part of the market left by foreign competitors.

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Additionally, U.S. Telecom companies are now in theprocess of reducing their research infrastructures, therebycontributing to the threat to the future of the entire industry.This is regrettable since the ability of the U.S. researchcommunity to sustain continuous innovation, create as wellas improve products, systems and processes is critical to ournational well-being, and to effective U.S. contributions to theworld's value added supply chain... ranging from naturalresources to end use items. This is particularly true withrespect to commercial, mass market end items andinfrastructure for the Information Age as opposed to defenserelated items.

From the university perspective this is a time of great stress.Budgets are tight and demands are increasing with someuniversities concerned about their very survival. Graduateprograms are finding it more difficult to find resources,especially research support. Unfortunately. most universityresearch is government funded asbut vanished in many areas.

A key finding reported by theCouncil on Competitivenessis that America's ResearchUniversities constitute a greatnational asset, but their focus ontechnology and competitivenessis limited.' The report goes onto recommend that universitiesdevelop closer ties with industr\so that education and research

industrial support has all

"America's ResearchUniversities constitutea great national asset,

but theirfocus ontechnology and

competitieness islimited"

Cc -c. o CoTpe:!'veness

programs contribute moreeffectively to the real technology needs of the manufacturingand service sectors...all while keeping their basic researchprograms strong.

Industry relationships arc growing, but robust relationshipsbeteen academia and industry have yet to be developed. Apartial explanation involves research universitydisillusionment with industry...occasioned by industry'spersistent focus on the short-term. According to Universityof Illinois at Urbana-Champaign Professor Timothy Trick,the short-term views of industry cannot and should not beimposed upon universities." We believe that a salientcomponent of the solution to the Information Industry'sproblems will lie in the answer to the key question: How canuniversity research resources be strengthened and utilized tofocus effectively on Information Industry futures? Thereseems to be a need and fit. but awareness, leadership andvehicles are required.

A Window Of Opportunity

The change in our Washington Administration providescircumstances and a situation amenable to vigorous pro-activc leadership on the part of the Information Industry...a

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window of opportunity. Specifically, in The Work ofNations," Secretary of Labor, Robert Reich, the director ofeconomic policy for the Clinton transition team, argues thatthe only policy that will benefit all Americans is for-government investment in two basic assets:

* Human Capital such as education and job training* Physical Infrastructure ranging from roads and bridges to

high-speed railroads and fiber-optic communications.

The rationale is that these assets won't leave the country andthat investment in these assets will encourage both U.S. andforeign firms to create jobs in America. The February 22,1993 Clinton-Gore Technology Policy statement" builds onthis conceptual framework with the following goals:

* Long term economic growth that creates jobs and protectsthe environment.

* A government that is more productive and moreresponsive to the needs of its citizens.

*World leadership in basic science, mathematics andengineering.

According to the statement: "The challenges we face - fromour competitors abroad and from our people at home -demand dramatic innovation and bold action that will notjust revive our economy now but also ensure our economicgrowth well into the future. Building America's economicstrength through technology demands new initiatives thatconfront these challenges effectively, efficiently andcreatively." These new initiatives would include:

* Permanent extension of the research and experimentationtax credit.

* Investment in a National Information Infrastructure.* Accelerated investment in advanced manufacturing

technologies.* Improved technology for education and training.* Investments in energy-efficient federal buildings.

Furthermore, "This new policy will result in significantlymore federal R&D resources going to (prc-competitive)projects of commercial relevance. It will also result in federalprograms that go beyond R&D, where appropriate, topromote the broad application of new technology and know-how." Specific new National Information Infrastructureprograms would include:

* Implementation of the High-performance Computing andCommunications Program.

* Creation of a Task Force on Information Infrastructure.* Creation of an Information Infrastructure Technology

Program.* Provision of funding for networking pilot projects.* Promotion of widespread dissemination of Federal

Information.

*M kf fo Volrm aWp3S i 3

0 es M PI/a ^^ dC

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The overall thrust of this policy has been captured inMandate for Change. 2G a book produced by the ProgressivePolicy Institute. The infrastructure component of the policys rooted in legislation developed by Vice President Al Gore.More specifically, this policy is consistent with theInformation Infrastructure and Technology Act of 1992 thatwould ensure the technology developed under the High-Performance Computing Act is applied widely in K-12education, in libraries, in healthcare and in industry,particularly manufacturing.

The Opportunities To Be Seized

The U.S. has a unique opportunity to accelerate progress onmany social, economic, environmental and competitivechallenges through the application of informationtechnology. Opportunity abounds for Information Industryrelated R&D in applications and supporting technologies thatare in alignment with the direction outlined above. Byfocusing on the following interrelated domestic problems wecan also take a large step toward strengthening U.S.competitiveness:

Environment - To utilize information technology tofacilitate environmental clean-up and sustainabledevelopment (meeting the needs of the present withoutcompromising the ability of future generations to meet theirneeds). For example, according to the World EngineeringPartnership for Sustainable Development and Henry Hatch,recent Chief of Engineers. U.S. Army Corp of Engineers,sustainable development will likely be the dominanteconomic, environmental and social issue of the 21stcentury. 2 Thus, a salient opponuniiy lies in the developmentof Information Network and Management Technologies tofacilitate the sharing of information to aid in the making ofsustainable choices to protect the earth's environment andimprove quality of life for generations yet to come. This isthe time for creative and constructive coexistence betweenbusiness and our environment.:

"Telecommuting asan alternative

approach to workcould help save closeto $5 billion a year in

fuel costs andproductivity loss"

California EngineerngFoundat'or Repo.

a )ear in fuel COSts and

Energy - To help reduce thesignificant environmental andenergy costs associated with thetransportation sector, for example,10 of the 17 million barrels per dayof U.S. oil based energyconsumption. A recent CaliforniaEngineering Foundation report,Transportation Redefined, claimsthat telecommuting as an alternateapproach to work could helpCalifornia save close to S5 billion

productivity loss." On a nationwidebasis, Arhur D. Little, Inc. estimates that a reasonable levclof telecommuting. ranging from 10 to (20( substitution for-'

transportation, will provide more than S23 billion in annualbenefits."' In addition to energy savings attendant totelecommuting and video conferencing, substantial savingscan be realized in both residential and business complexes b)virtue of tele-energy management."'

Education - To help revitalize U.S. education and trainingas well as to further enhance the free movement of ideas andthe dissemination of appropriate learning materials. Thisinvolves the development of new and more appropriatelearning tools as well as expanded distant learning vehiclesto address widespread educational inequities...all based onmodem computer and telecommunications technology suchas portrayed at the Ameritech SuperSchool CenterpieceExhibit at SUPERCOMM/ICC '92.2" '

Healthcare -To contain and reduce exploding costs that havereached 13C of our Gross Domestic Product as well asimprove services through tele-healthcare, tele-medicine andother information technologies. Systematic focus on theapplication of Information Management Technologies thatwill enable the decentralization of healthcare delivery coulddecrease costs as well as increase service quality andaccessibility. Information Management Technologies canalso be used to reduce labor costs by increasing productivityin hospitals and other healthcare delivery settings. They canalso improve healthcare services in Rural America.' Forexample, Arthur D. Little, Inc. estimates that thesetechnologies can support home healthcare to the extent thatsome S30 billion a year can be saved."

Derivative Benefits, Costs and Funding

There would also be a number of derivative bcncfiLs associatedwith the application of Information Technology to the abovefocus areas. These benefits would stem from the informationhighways and service platforms intrinsic to a private sectordeveloped, fiber optic based telecommunications andinformation infrastructure.. .linking every home, lab, classroom,and business enterprise throughout the land via wired-(copper/fiber/cable) as well as untethered wuireless(radio/infrared) access. These environmentally sound highwayswould serve as modern arteries of commerce.education/training and entertainment that would not onlyprovide U.S. businesses with a strong competitive home base, 3'but would also encourage investment by both domestic andforeign firms. It would also allow us to leverage ourcompetitive advantage in computers, software, microprocessorsand wireless systems. Some spin-off benefits would be:

Job Creation - An increase in domestic and foreigninvestment would stimulate the creation of more U.S. jobs.Additionally, the widespread use of tele-businessapplications would stimulate small business growth withattendant job creation.

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Quality of Life Improvement - Quality of life would improveespecially in major metropolitan areas. This includes publicsafety, crime reduction and environmental protection as wellas helping to bring our disabled citizens into the mainstreamof life in our nation.

Expanded Entrepreneurship - An expanded number ofindividuals can be supported by information technology tocreate personal wealth through entrepreneurship and work-at-home.

Rural Growth - Information technology can help re-enfranchise Rural America by "connecting" Rural and UrbanAmerica so Rural America fully participates in the economicgrowth of the nation.

According to the Economic Strategy Institute's RobertCohen, U.S. productivity could be boosted and our nationaloutput increased by over S300 billion by 2010 if we replacedcopper wires with new fiber optic cables capable of vastlyincreasing the amount of information transmitted initbusinesses and homes.3 Clearly, an advanced, state-of-the-art infrastructure with affordable, widespread accessibilityand ease of use would make a significant contribution to theeconomic vitality and overall well-being of the nation and itscitizens. This type of infrastructure would also provide thefoundation for an Information Industry vision and agenda.

Further insights into the benefits and issues surrounding thedevelopment of an advanced telecommunications andinformation infrastructure were provided by BellcorePresident and CEO George Heilmeier at SUPERCOMM/ICC '92." (See also Dorros"). Chapter 3 of The NTIAInfrastructure Report' provides more detailed discussionsand a wealth of references on the benefits of such aninfrastructure. These and other opportunities, as well asassociated costs, are discussed in Business Week's 1992Special Issue on Reinventing America." and in a paper byColumbia University Professor Bruce Egan andNorthwestern University Professor Steven Wildman. 3'

It is of significance to note that the Egan-Wildman paper alsoprovides a thoughtful treatment of policy considerationsrelated to building a national telecommunications andinformation infrastructure. It is one of numerous AnnualReview papers commissioned by the Institute forInformation Studies to explore the larger all-encompassingissues that face people, in all aspects of their lives, as theyare confronted with an ever increasing array of InformationAge technologies and applications.

The real challenge in developing an advanced tele-communications and information infrastructure is nottechnology and how to make it work, but rather how to applytechnology to solve the complex interrelated problems facingthe nation as well as the global community...these

solutions/applications will fuel the modernization andgrowth of the infrastructure. Funding and widespreadaffordable access are the salient issues. Carol Wilsoncaptured the essence of these issues in an October 1991Telephony editorial:" "In the U.S., for example, there is theurgent need to determine how to fund the modernization ofthe public network infrastructure in a competitive market.Otherwise, we run the very real risk of building massivenetwork overlays that bring the information age only to largecorporations, universities and branches of government."

Some argue that the funding should come from thegovernment while others argue for funding by the privatesector. The USC/CTM report" shows the present U.S.approach to network modernization to be in sharp contrast toprograms in Europe and Japan where the role of the publicsector is emphasized in thedevelopment of plans, strategiesand standards for implementingpublic network infrastructure.According to the report, the U.S.approach: "has resulted in delays inimplementing new infrastructure incontrast to other nations...whilethe U.S. is fostering a wave ofentrepreneurial ventures that arepioneering new technologies andpractices, other countriesemphasize the role of existing

"Competition andcooperation may seem

antithetical; but, atsome very deep level,they are two sides of

the same coin."John H. Holland

University of Micnga"Complexity. 1992

carriers in implementing infrastructure developmentsprograms." The report goes on to state that: "Regulatoryconditions strongly contribute to the low investment levelsand long capital recovery periods in the U.S."

According to the Progressive Policy Institute, the dauntingprice, 5100 to S400 billion, can be paid without resorting topublic spending.2 "' This would be accomplished by"regulatory changes that encourage electric utilities tobecome investors in this new system, along with the localphone companies and perhaps cable television companies.New federal legislation could provide guidelines for stateutility commissions (which already regulate both phone andelectric utilities) to allow and encourage such joint ventures."In their recent book, Computer Wars, Charles Ferguson andCharles Morris state their belief that the federal governmentshould play the leading role in getting such a networkinstalled and that it can be done without doing violence totraditional American government-industry responsibility.'"

What To Do?

This is a unique and potentially transforming moment in theevolution of the Information Industry...the challenges.opportunities, requisite technologies and timing have neverbeen in closer alignment. Based on the present industry

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environment, it would seem that we need to focus initially onsatisfying the obvious and immediate need for dialogue... tolift the level of current debate so as to better focus ourenergies by seeking common ground and working togetheron a cooperative basis. The ultimate aim would be to harnessand then utilize the full capacity of the business andacademic sectors of the Information Industry to address thenation's significant challenges and opportunities. This aimwould also appear to be in the enlightened and collectiveself-interest of all Industry stakeholders, as well as thegeneral public.

The recommended approach would be based on the creationof forums by the National Engineering Consortium amongothers. These forums would serve as clarion calls to theInformation Industry's business and academic elite to beginthe process of creating a shared industry vision with acorresponding high technology agenda and strategic actionplans. The agenda would address the most compellingtransition imperatives in our industry while the action planswould be aimed at shaping and leveraging these transitionsfor the future. First and foremost among these transitionimperatives would be the building of an advanced nationaltelecommunications and information infrastructure...theobvious focal point for the vision and agenda.

These forums would also serve to: Catalyze an InformationIndustry R&D policy agenda that is in harmony with thenation's socio-techno-ecologic-economic policy direction(c.f. Clinton-Gore'), assure closer ties between universitiesand industry, promote an increase in public awareness, aswell as serve as a role model for action in other criticaltechnology areas. The overall objective of this cooperativeeffort would be the development of a national consensusamong the nation's largest non-government R&D policymakers to focus their efforts within a common frameworkand provide leadership to ensure that the U.S. does notregress. but rather, drives forward to achieve the fullpotential of a new era.

This call to action initiative was proposed by NorthernTelecom President Gerry Butters, at a meeting of academic

and business leaders at NCF92. The intent was to expandupon his appeal to the Information Industry atSUPERCOMM '91 for industry-wide efforts to assure realizationof the promise and potential "No people have everbenefits of Information Age had the power totechnologies."? The spirit of the shape thefuture asproposal is best stated in his we do now"closing remarks: "We're in the Geraic Bu.e'sclosing innings of the Information Preside'Age. We should be marshaling all Northemn Telecr. Incof our collective energies andstrengths toward the common goalof realizing the potential of our era, and not let it slip away.We will be the first people in history to experience thebeginning and the end of an economic era. No people haveever had the power to shape the future as we do now. Weneed move in a concerted fashion to assure that the power ofinformation management technologies are applied with vigorto the travails of the Industrial Age, and not lost in the fray ofpolitical rhetoric."

What is Being Done?It is worth noting that the initiative echoes MotorolaExecutive Committee Chairman Bob Galvin's call over twoyears ago, for the private sector to chart a course to navigatethe challenges ahead." Galvin called for a technologyroadmap to stimulate a clearer vision of future needs thatwould, in turn, stimulate private sector outreach andinvestment in long-term growth...all leading to greaterwealth creation in America (see Figure 2).

The current U.S. business environment is encouragingconsortia and combined effors to solve problems and pursueopportunities. The U.S. has a unique resource andcomparative advantage over foreign competitors in itsresearch universities. Universities offer cost effectiveresources for their programs. Many would welcome realindustry commitment and partnering arrangements. Thelonger term view and corresponding investment associated

Figure 2Galvin's Proposed American Agenda

Motorola's Bob Galvin says his proposed American Agenda of Private Sector Industrial Intents & Initiatives can helpAmerica accomplish the extraordinary in the future. From that concept would come the creation of a Private Sector Boarcof Intents & Initiatives, a catalyst for ushering in the development of grand new ideas. Galvin offered these examples of

* A national policy to encourage all businesses to apply forthe Malcolm Baldrige National Quality Award.

* A national policy to link the U.S. through fiber-opticcable.

* The allocation of space on terrestrial cable facilities to allTV stations.

* A major laboratory, on the scale of the Bell TelephoneLaboratories, for "the next eras of technology."A "technology road map" for America.Control of the drug problem.

* A fundamental reexamination of the American enterprisesystem.

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with all opportunities must be seen as inter-related nationaland business imperatives that will benefit each of thestakeholders.

This need is not unrecognized. To ensure the United States'ability to effectively draw upon its leadership in research anddevelopment and to maintain our competitive edge in theglobal marketplace, CORETECH, the Council on Researchand Technology, has issued several recommendations for1993." Briefly, CORETECH recommends that theAdministration and Congress work together and with theresearch community to accomplish the following in 1993:

* Make the R&D tax credit permanent and strengthen it toenhance its effectiveness as a business growth incentive.

* Remove disincentives to investment in U.S. research anddevelopment by providing a permanent solution toTreasury Regulation 861-8.

* Renew the federal commitment to increased support forbasic research and advanced education.

* Increase federal support of research and developmentdirectly relevant to industrial competitiveness.

* Create strong linkages between government-fundedapplied and basic civilian research activities.

Over the past two and a half years, The United StatesTelephone Association (USTA) has issued its Vision 2000,its report on Public Policy Requirements to Achieve Vision2000 and its Technology Vision.' These three documentsoutline the benefits Local Exchange Carriers (LECs) canoffer our nation by deploying advanced networktechnologies, identify changes required in public policy toenable that deployment and outline the specific newtechnologies that hold the greatest promise for networkadvancement as we enter the 21st century. The USTATechnology Vision outlines the technological foundation fora new marketplace, in terms of what technology can enablefor the LEC public network and. for that matter. for thenetworks of others.

With respect to the Computer Sector, CSPP, the ComputerSystems Policy Project, chaired by Apple ComputerChairman John Sculley, recently published their vision andrecommendations for action on the National InformationInfrastructure (NII). 4 A companion video illustratesdemonstrations on how the Nil will provide benefits ineducation, healthcare, scientific research as well as inbusiness and industry. In the video, Sculley calls upon thenew Administration and the new Congress: "to work with usand other industries to make the Nil a national priority andbuilding it a national challenge, to dedicate the governmentresources needed to coordinate this effort, to work withindustry on key public policy issues and to pursue anambitious research agenda including demonstration projectsto provide the foundation for the NII."

Figure 3 provides a summary' of the CSPP recommendations.Additionally, CSPP believes that public policy principlescovering the following areas must be addressed jointly b) theprivate sector and government before the informationinfrastructure of the future can become a reality: Access.First Amendment Rights, Privacy, Security, Confidentiality,Affordability, Intellectual Propriety, New Technologies,Interoperability, Competition and Carrier Liability. Each ofthese Nil public policy issues is outlined in the referencedCSPP report.

A number of models exist for cooperative efforts. Sematech.Semiconductor Research Center (SRC), Microelectronicsand Computer Technology Corporation (MCC). ElectricPower Research Institute (EPRI), and Bellcore are examplesof varying applicability. It is of significance to note that theU.S. moved slightly ahead of Japan in 1992 in totalsemiconductor sales. '4 This can be seen as a good example ofhow semiconductor industry cooperation along with SRCand Sematech turned the situation around.

The July 1992 cross-industry business development foruminitiated by the Information Industry Association was a

Figure 3Summary of CSPP Recommendations

Administration Agenda1. Make the Nil a National

Technology Challenge

2. Establish a National InformationInfrastructure Council

3. Establish an Nil Implementa.ionEntity

4. Invest in Research for an Nil

Legislative Agenda1. Authorize a National Information

Infrastructure Council andAppropriate Funds for its Operation

2. Authorize and Appropriate Fundsfor Research and TechnologyDemonstrations

Industry Agenda1. Continue Investments to Develop

and Deploy an Nil

2. Continue to Invest in Research andDevlopment of Applications

3. Reach Out to Other Industries

4. Promote Nil Efforts

5. Develop and Participate in Pilo!Projects

6. Develop Nil Goals and MilestonesSo. c' CS

= :

l1q 7


notable step forward in bringing together the telephone,cable, TV, information services and newspaper publishingsectors to explore business development opportunities."Additional examples of relevant industry cooperation can befound in the Transcontinental ISDN Project 1992 (TRIP'92)demonstration this past Fall and the ongoing work onstandards, as for example by the Corporation for OpenSystems (COS), the ATM and Frame Relay Forums as wellas the April 1992 Americas Telecommunications StandardsSymposium driven by the TI Committee of the ExchangeCarriers Association. Still, other examples of cooperativeefforts involve the work of the Federal CommunicationsCommission's Network Reliability Council and the GeneralMagic partnering arrangement with AT&T, Sony, Motorola,Philips and Matsushita. The latter group is promoting an"intelligent" messaging system that aims to provide easy touse, palm top network access by untethered personalcommunicators. All of these efforts demonstrate both thenecessity and power of industry-wide cooperation...cooperation that need be expanded to bring about a world-class national telecommunications and informationinfrastructure.

There are about five U.S. National Network initiatives, eachdemanding a degree of cooperative effort. Worthy of specialnote, is the emerging cross-industry group organized byRobert Kahn under the auspices of the Corporation forNational Research Initiatives (CNTRI) to work the technologyaspects related to the building of a NIl. Lessons on whatworks and what does not work can be learned from all ofthese arrangements, the experience of the National ScienceFoundation and others as well.4"

The National Engineering Consortium published themonograph Creating Our Common Future,' that is beingused to help provide the context for a high level path forwardfor the business and academic sectors of the Information andTelecommunications Industry, as for example, the focus on

education and the future at SUPERCOMM/ICC '92. Withthe support of major corporations and research laboratories,it produced the TechNeeds 2000 Video Forum... a video thatprovides visualization as to how advanced technology willmeet the information needs of tomorrow's users.

The Consortium has focused efforts on bringing peopleand organizations together to work on a collaborativebasis to realize the full potential of the Information Age.A brief, twenty month, history of this activity is portrayed inFigure 4. These activities will be expanded with particularemphasis on university-industry interaction. Socialization ofthis initiative with potential industry and universityparticipants will continue...both participants need acompelling reason to commit to the program. Further to thisend, the Consortium developed the following set of triggerquestions to stimulate dialogue:

* How can we motivate the business sector to engage inserious long term thinking and investments?

* How can relationships between Information Industrysegments be catalyzed and developed?

* What should be the scope and key components of a hightechnology agenda for the Information Industry?

* How can university research resources be strengthenedand utilized more effectively on Information Industryfutures...how can the integrity and the future of theuniversity be strengthened by closer coupling withindustry?

* What can we learn from Sematech, SRC, MCC, EPRI.Bellcore, CNRI, NSF/ERCs and the like...how can wecapture and share worldwide experiences?

* What core technologies will most likely be required tosupport high leverage future applications...do we needadditional consortia similar to SRC and Sematech in thesecore technologies and what should be the focus for these?

* What is the best path forward?...next steps.

8 1-0

Figure 4From the 2021 AD ComForum to InfoVision and Beyond

Joint NCF, ECF, WCF Executive Advisory Council Meeting(Path Forward, Futures Committee), 11/92

' InfoVision ComForum: Visions of the Information Age, 11/92-O?/ NCF92: Executive Workshop - Improving Technology Transfer from Universities to Corporations,

Launch: Nationa! High Technology Agenda Initiative for the Information Industry, Commission<OGY0 White Paper, 10/92

0^3 SUPERCOMM/ICC '92: Keynote Addresses linked to Creating our Common Future. Educational Thrust,_0 - Ameritech SuperSchool, 6/92

~,'a TechNeeds 2000 ComForum: Technologies & Customer Needs of the 21st Century. 6'92'A@,>l ECF92: Executive Forum - National Telecommunications Visions, 5/92

C/ SUPERCOMM '92: Launch Creating the Future Initiative, 3/912021 AD CornForum: Visions of Society. Technology, Information and Communications, 3/91

4


These questions were addressed at the National EngineeringConsortium joint Executive Advisory Council meeting onNovember 21, 1992 (see Appendix). Input from these andother discussions were factored into an agenda settingprocess. Specifically, upon the recommendation of theConsorium's Executive Advisory Councils and Future'sCommittee, a needs based position statement entitled: AnAgenda for National Socioeconomic Progress, was prepared(see Figure 5). Reference to the Agenda will show that itembodies the basic concepts outlined in the foregoing. TheAgenda and earlier versions of this call to action have beenpresented to industry CEOs by the Consortium's ExecutiveAdvisory Council Members with the ultimate aim of helpingthe new Administration and Congress maintain focus ontechnology policy related to the Information Industry.

The background, aims and benefits of this call to actioninitiative were presented and discussed at the AccreditationBoard for Engineering and Technology Annual Meeting andInfoVision ComForum" this past fall, and most recently atthe Alliance for Public Technology's Third AnnualConference this February. At the latter conference, APTreleased a policy paper calling for an upgrade of the publictelephone network to a Broadband TelecommunicationsPlatform that supports universal, two-way, multi-mediaapplications...and the adoption of such a platform as anational goal.4'

USTA is now working on a Market Vision for publicationnext year to further outline the market and public policyimplications of new developments in the Information

Figure 5An Agenda For National Socioeconomic Progress

The United States has an exceptional opportunity to accelerateprogress on many social, economic. environmental andcompetitive challenges through information technology benefits.To seize the opportunity. it is imperative that national resources beredirected and focused as soon as possible

The enormous technology talent of the nation's defense effort canbe repositioned to solve major domestic problems. By channelingR&D activity from the military to address the following interrelateddomestic problems. a win-win situation will result. Furthermore.only a proactive government policy can guide this transformationprocess

The national agenda to redirect military R&D talent and resourcesto domestic issues will be best served by focusing on the following:

Education - How can we revitalize U S education and trainingthrough the use of computers. distance learning and otherinformation technologies?

Heethcare - How can healthcare costs be substantially reducedand services improved by tele-healthcare, tele-medicine andother information technologies'

Environment - How can information technology be utilized tofacilitate sustainable development and environmental clean-up?

Energy- How can we reduce the use of fossil fuel based energythrough the use of tele-commuting video conferencing andother information technologies?

There would also be a number of derivative benefits associatedwith the application of Information Technology to the above focusareas. These benefits would stem from the information highwaysand service platforms intrinsic to a private sector developed, fiberoptic based telecommunications infrastructure.. linking everyhome, lab, classroom and business enterprise throughout the land.These .highways would also serve as modern arteries ofcommerce, education/training and entertainment that wouldencourage investment by both domestic and foreign firms and socreate additional jobs in the United States

Some spin-off benefits would be:

Job Creation - An increase in domestic and foreign investmentwould stimulate the creation of more U.S. jobs Additionally,the widespread use of tele-business applications wouldstimulate small business growth with attendant job creation.

Quality of Life Improvement - Ouality of life would improveespecially in major metropolitan areas. This includes publicsafety, crime reduction and environmental protection.

Expanded Entrpreneurshp - An expanded number of individualscan be supported by information technology to create personalwealth through entrepreneurship and work-at-home

Rural Growth - Information technology can reduce the gapbetween Rural and Urban America so Rural America fullyparticipates in the economic growth of the nation

These opportunities to address our country's most pressingproblems with the full force of the Information Industry can only berealized if information providers, service companies.manufacturers and research universities are assisted by forwardlooking government policies that reduce restrictions andconcentrate research efforts.

We must accelerate research in university, industry andgovernment laboratories on human interfaces, software, opticalcomponents, energy storage technologies and other areasidentified by the Private Sector's Council on Competitiveness

Increased research coupled with closer university-industry links toapplications will have substantial impacts on our nation seconomic and social needs

The National Engineering Consortium offers to help promulgate aclarion call to action on this agenda and to facilitate progressthrough its unique relationships with major U.S. Researchuniversities, and information industry corporations.

I2-1 9


Industry. The CNRI coordinated Nil cross-industry workingteam is in the process of developing its charter andprioritizing proposed activities while, CSPP and APT arepromulgating their visions and recommendations. TheCouncil on Competitiveness is launching a concurrent 21stCentury Information Infrastructure Program co-chaired bythe former Hewlett-Packard president and CEO John Youngand MIT President Charles Vest. By the very nature of itsmembership, the Council is well positioned to launch thisprogram.

The Path Forward

Notwithstanding the substantial agreement in direction andconsiderable efforts described above, as well as the criticalityof a strong Information Industry and an advancedtelecommunications and information infrastructure to theeconomic health of the nation, the perceived benefits tostakeholders must be applicable to their enterprise.Therefore, our focus has been to complement corporate anduniversity agendas such as their own customer focus, totalquality management. outsourcing, right sizing and overallcost reduction programs as appropriate. Again, the longerterm view and corresponding investments must be seen as abusiness as well as a national imperative that will benefit allof the participants. These aims and benefits are beingreflected throughout the course of this effort to help mobilizethe Information Industry.

A rolling action register is under continuing development bythe National Engineering Consortium working inconjunction with already committed business and academicleaders. Our aim is to produce an action oriented agendabased on a thorough discussion of the problems andopportunities associated with the overall initiative from theperspective of industry and university participants. Our intentis to take maximum advantage of prior efforts atcollaboration, as well as the work of USTA, APT theCouncil on Competitiveness, CNRI IIS. CSPP, CORETECHand others.

In working this call to action, we have found numerousparties with interests in the establishment of an advancedtelecommunications and information infrastructure. It shouldbe no surprise that each part) comes with its own agenda.The problems are complex and the task formidable. Withoutdoubt, an all out effort will be required by the entireInformation Industry with hard choices to be made along theway. All parties will need to work together if we are to buildconsensus on a coherent and credible story spanningbencfits, costs, roles, missions. strategics, tactics, timing andthe like. This story need be capable of influencing keydecision makers in both private and public sectors re theinherent wisdom in a high-technology agenda keyed to thedevelopment of an advanced national tele-communications

and information infrastructure. Hopefully, the process ofconsensus building will be well established prior to anational summit on telecommunications suggested byPresident Clinton at his economic summit this pastDecember. Establishment of the White House Task Force onInformation Infrastructure should provide strongencouragement for developing a consensus building process.

The challenge before us is to enable pre-competitivecollaborative work for the long-term common good. To dothis, we need to foster cooperativeefforts by establishing commonground and a basis for mutual trustas well as a willingness totranscend vested self-interests. TheNational Engineering Consortiumwill continue to respond to thischallenge by seeking better ways tocatalyze joint activities, and bysupporting related efforts so as tominimize overlap and maximizesynergy.

"We need to fostercooperative efforts,

by establishingcommon ground and

a basis for mutualtrust as well as a

willingness totranscend vested

self-interests"

SummaryThe opportunity to address our country's most pressingproblems with the full force of the Information Industry canonly be realized if information providers, service companies,manufacturers and research universities work cooperativelyand are assisted by forward looking government policies thatreduce restrictions and encourage private sector investmentas well as concentrate research efforts on the mostcompelling industry transition imperatives. First andforemost among these transition imperatives would be thebuilding of an advanced national telecommunications andinformation infrastructure.

An advanced state-of-the art infrastructure with affordable,widespread accessibility and ease of use would make asignificant contribution to the economic vitality and overallwell-being of the nation and its citizens. This type ofinfrastructure would also provide the foundation for a shared

'Information Industry vision and agenda... accelerating itsdeployment would indeed be a Grand Challenge to theindustry's business and academic sectors.

We must also accelerate research in university, industry andgovernment laboratories on human interfaces, software,optical components, energy storage technologies and otherareas identified by the Private Sector's Council onCompetitiveness among others. Increased research coupledwith closer university-industry links to applications will havea substantial beneficial impact on our nation's social,economic, environmental and competitive problems.

17310


We in the National Engineering Consortium are encouragedby the positive feedback and commitment we have receivedthus far. We see this initiative to help mobilize theInformation Industry as a great opportunity and look forwardto working with other committed parties. Let us seize themoment and really begin to work together to help create the21st century.

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Schuster, New York, NY, 1985.2. Thurow, Lester, Head to Head - The Coming Economic

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13. Chaffee, C. David, The Rewiring of America - The FiberOptics Revolution, Academic Press, Inc., Orlando, FL,1988.

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32. Heilmeier, George H., Anatorm of the InformationRevolution, 1992 International Conference onCommunications, SUPERCOMM/ICC '92, Chicago, IL,June 16, 1992.

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Frank G. Splitt is Vice PresidentEmeritus, Educational and Environ-mental Initiatives, Northern TelecomInc., and a Senior Fellow ofNorthwestern University's Center forInformation and TelecommunicationsTechnology. He has served as a ViceDrc-;rtn, rnf ,rthrn Tnl.- -, 7n.,r .1...lUk lIL U. iu'jilII'.i111 I -,tUI 111im..

with management responsibilities through a variety ofpositions in technology planning, technical marketing, andengineering.

Dr. Splitt's engineering experience includes outside plantproducts, information systems, spread spectrumcommunications, radar, sonar, direction finding systems, andtelevision. He received his B.S.E.E. from the FournierInstitute of Technology, and M.S. and Ph.D. degrees inElectrical Engineering from Northwestern University.

Splitt, an IEEE fellow and a Director of the NationalEngineering Consortium is a member of the ABETIndustrial Advisory Council. He serves NorthwesternUniversity as a member of the Robert R. McCormickSchool of Engineering and Applied Science AdvisoryCouncil. He also serves on the University of Illinois Collegeof Engineering Advisory Board.

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SECOND INTERNATIONAL SYMPOSIUM: NATIONAL SECURITY & NATIONAL

COMPETITIVENESS: OPEN SOURCE SOLUTIONS Proceedings, 1993 Volume I -

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