AND GLOBAL COMPETITIVENESS

kingkreanii22195INFORMATIONINFRASTRUCTURE,NATIONALPOLICY,ANDGLOBALCOMPETITIVENESSJohnL.KingandKennethL.KraemerCenterforResearchonInformationTechnologyandOrganizationsUniversityofCalifornia,IrvineIrvine,[e-mail]@uci.eduWorkingPaper:DoNotQuoteorCiteToAppear:InformationInfrastructureandPolicyMarch1995January1995©CRITOINFORMATIONINFRASTRUCTURE,NATIONALPOLICY,ANDGLOBALCOMPETITIVENESSAbstractBecauseofitseconomicandsocialsignificance,informationtechnology(IT)isincreasinglythefocusofnationalpolicyaimedatcarvingoutanicheforlocalindustryintheglobalproductionsystem.Debateragesovergovernmentinterventionversusprivatesectorleadership,andoverpoliciesforproductionversususe,sometimesmissingthefactthatthesedualaspectsareinterrelatedandmutuallyreinforcing.Thisarticlediscussesthedilemmaofnationalpolicyformationforinformationtechnology(IT)inthecontextoftheinformationsuperhighwayinitiative,ornationalinformationinfrastructure(NII),intheUnitedStates.Itreviewsthetechnologicalforcesshapingtheconvergenceofcomputersandcommunications,describescurrentandfutureservicesontheinformationsuperhighway,outlinesthemajorserviceprovidersandthemarketsatstake,andconcludeswithsomeimplicationsfortheinformationsuperhighwayfornationalcompetitiveness.ItnotesthatmultinationalcorporationsaremovingaheadonNIIwhethergovernmentsdosoornot.Inordernottobeleftbehind,governmentsneedtoensurelocalindustryispartofmainstreamdevelopments,stimulateinstitutionallearninginordertousethenewtechnologies,andassessthefitofcountrybusinesspracticeswithinternationalnormsandstandards.INTRODUCTIONTheproductionanduseofinformationtechnology(IT)isincreasinglyrecognizedbynationalleadersasavitalcomponentofglobalcompetition.Thistechnology,bothinprocessingandcommunications,isnowwovenintothefabricoftheeconomicandsociallifeofdevelopedcountriesandisamajorfocusofnationalinvestmentinnewlyindustrializedcountries.Developingcountriesareplayingcatch-upbymakingsignificantincreasesinspendingforITinthehopesofnotbeingleftbehindintheglobalstruggleforcompetitiveadvantage.NationalITpolicyhasbecomeacenterofdebate.Thedebateragesbetweenthosewhoclaimthatnationalpolicyshouldserveonlytohelptherobustprivatesectortakethelead(Nelson,1993;WorldBank,1993)tothosewhoarguethatconcertednationalgovernmentinterventioncanachieverapidprogress(DedrickandKraemer,1995;Flamm,1990;Kraemer,GurbaxaniandKing,1992;KraemerandDedrick,1994a;Schware,1992).Whereactivegovernmentinterventionisrecommended,policychoicesarefrequentlyportrayedasbimodal,favoringeitherproductionoruse,ratherthaninterrelatedandmutuallyreinforcing.Theargumentsonallsidesseemcompelling,makingtheproblemofpolicymakingextraordinarilydifficult.Inmostcountries,nationalleadersarebeingaskedbyvariousconstituentstotakeastrongstandontheITpolicyissue,butthereisverylittlereliableguidanceaboutwhatstandtotake.ThisarticlediscussesthedilemmaofnationalpolicyformationinthecontextoftheUnitedStatesNationalInformationInfrastructureinitiative,whichwewillcallbyitsacronymNII.TheU.S.NIIinitiativeispowerfulfordirectandsymbolicreasons.TheU.S.pioneeredmanyoftheimportantadvancementsininformationtechnologyduringthiscentury,andremainsoneoftheworld'sleadingsuppliersofknowledgeandproductsinthisdomain.TheBushadministrationreinforcedU.S.resolveinthisareabysupportingtheHighPerformanceComputingandCommunicationsprogramin1991,aimedatmaintainingtheclearU.S.researchleadinIT.Onamoresymboliclevel,theClintonadministrationhasgonebeyondthedefense-orientedtraditionofsupportforITresearchtomakeITakeypartofanewindustrialpolicyaimedatglobalcompetitiveness(ClintonandGore,1993;Gore,1993;IITF,1993;CouncilonCompetitiveness,1993).Thestakesaresubstantial.Overthenext20-50years,theU.S.NIIinitiativeisexpectedtomobilize$40-100billionofnationalgovernmentinvestmentand$1-2trillionprivateindustryofprivateinvestment(IITF,1993).Whiletherearenoclearpolicyroad-mapstofollow,itislikelythatgovernmentinvestmentswilloccurmainlyintheareasofR&D,demonstrationprojects,regulatoryreform,NIIpromotion,theconstructionofintergovernmentalnetworks,andintheexpansionofIT-supportedgovernmentalservicesdelivery.Industryinvestmentswillrewirethecountrywithfiberopticcable,increasethecapacityofexistingcoaxialandcoppercable,upgradeswitchingequipment,installnewequipmenttoprovidenewservices,andbuildalargevarietyofprivately-suppliedinformationproductsandservicesincludingentertainment.TheNIIhasgeneratedtremendousdiscussionamongU.S.government,industry,andeducationcommunities,aswellasamongthegeneralpublic.Ithasalsogeneratedgreatconcern,andsometimesfear,abroad(TCOJ,1994;TheEconomist,1994).Muchoftheinternationalreaction2totheU.S.NIIinitiativeappearstobebasedonmisconceptionsabouttheoriginsanddirectionsoftheinitiative.ThisarticleaddressesthetechnologicalandpolicybasesoftheNII,andassessesthelikelyroleNIIdevelopmentswillplayinglobalcompetition.ItconcludeswithasetofcalibratingobservationsthatshouldassistnationalleadersinfiguringoutappropriateresponsestotheU.S.NIIinitiative.FORCESOFTECHNOLOGYTheNIIisfirstandforemostareactiontothechangingforcesoftechnology