*OT* Commerce Report Describes Economic Benefits From Internet
By BLOOMBERG NEWS
WASHINGTON -- The financial benefits of the Internet and high technology extend beyond the quick riches they have brought high-profile entrepreneurs and investors in recent years to the nation's economy as a whole, a new Government study shows.
The information technology industry -- which includes everything from the Dell Computer Corporation's PC's, to the Microsoft Corporation's software, to Cisco Systems Inc.'s routers -- generated at least a third of the nation's economic growth between 1995 and 1998, the Commerce Department said in a report released Tuesday. During that period, the gross domestic product rose 22 percent, to $8.7 trillion.
Those goods and services also got cheaper and allowed businesses to become more productive, cutting inflation by seven-tenths of a percentage point in 1996 and 1997, the report says.
"The improvement in technology, in productivity, is what has made the economy so incredibly attractive in the last couple of years," William J. McDonough, president of the Federal Reserve Bank of New York, said in a speech in New Jersey Tuesday.
Tuesday's Commerce Department report, the second in a series of three on technology, does not provide figures measuring total spending on high technology. Instead, it focuses on growth of on-line businesses and companies like Dell that cater to the technology industry.
For example, it says almost half of all American workers will be employed in high-technology industries or at companies that rely heavily on technology by 2006.
Workers in information technology have been at least twice as productive as other workers from 1990 to 1997 and earn 78 percent more than other workers, the report said.
The report "provides fresh evidence that our nation's massive investments in these sectors are producing gains in productivity and that these sectors are creating new and higher-paying jobs faster than any other," Commerce Secretary William M. Daley said in the report.
Meanwhile, those who invested in high technology have reaped rewards that outpaced the market as a whole. The Standard & Poor's High Technology index rose more than five times since June 1994, while the broader S.& P. 500 stock index tripled.
Also, spending on information technology has quadrupled over the last decade, rising as a share of all business spending on equipment to 53 percent from 29 percent, according to the Commerce Department in a separate report. |
