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FCW : November 30, 2012
Bookshelf communications. As such, economic success depends upon accelerating digital transfor- mation and the widespread use of IT in all sectors of the economy. The United States performs well when it comes to enterprise- level adoption of IT. However, the United States lags behind in the adoption of IT in other areas, particularly those confronted with chicken-and-egg conundrums. One prominent example is the smart elec- tric power grid. The smart grid is intended to be a new kind of network that will deliver power more ef ciently and reliably than our existing power grid. The smart grid will facilitate the seamless integration of new technologies, including "smart" appliances that respond to dynamic price signals, plug- in hybrid electric vehicles, distributed gener- ation (for example, residential solar panels) and energy storage solutions. However, U.S. electric utilities have been slow to embrace it, in part because as regulated monopolies they have little incentive to do so and in part because the public utility commissions that regulate them have been risk-averse. (It s made worse by neo-Luddite citizen groups that oppose smart grids on completely falla- cious grounds.) And, at least until the recent stimulus legislation, there was little help from government. This suggests a key role for government: supporting "digital platforms." Neoclassical economics ignores technology platforms. But throughout U.S. economic history, technol- ogy platforms have served as powerful launching pads for new industries and jobs. In the 1920s, there was no point in GE or RCA inventing a new electric appliance if people did not have electricity. In the 1950s, there was no point in Sears or Macy s opening stores in suburban shopping malls if customers could not drive on highways to get to them. In the 1990s, there was no point in Amazon.com trying to sell books online if the World Wide Web didn t exist. And in the early 2000s, there was no point for YouTube to host videos if people didn t have broadband in their homes. Today is no different. There is no point in creating an online application to let people manage their health information if that infor- mation consists of paper records. There is no point in creating a smart washing machine that turns itself on when electricity costs are low at night if the supportive electric grid isn t smart as well. There is no point in creating mobile applications that require high transmission speeds if the 4G network is not deployed with adequate spectrum allocated to it. In fact, there are thousands of job-producing new products, services and business models ready to be launched once the needed digital platforms are in place. There are at least six key digital platform technologies today. The rst is broadband, which is a critical enabler of a host of new applications like telehealth and cloud computing. Yet, only about two-thirds of Americans subscribe to broadband, it is not universally deployed (about 6 percent of homes have no access other than satellite), and broadband speeds, while improving, can get much faster still. One reason so few Americans subscribe to broadband is that they don t have a personal computer or don t know how to use one. Taking steps to get more than 90 percent of households online would be a signi cant step forward in build- ing a universal broadband economy. Second, next-generation wireless com- munications promise to provide services with speeds that are 20 to 50 times faster than today s 3G networks, enabling a mobil- ity revolution to emerge. Yet, many places today cannot even get cell phone coverage, much less advanced data services, and it is not clear that the government will free up enough spectrum, especially spectrum now used by TV networks, for these data-hungry wireless applications. Third, health IT gives patients and their caregivers an easily accessed, comprehen- sive view of the patient s health informa- tion. But compared to some other nations, America lags far behind. Fourth, intelligent transportation systems can bring real-time intelligence to travel- ers. Imagine that you could get real-time, in-vehicle traf c information that dynami- cally reroutes your navigation route based on information such as current road conditions (e.g., avoid icy spots or that traf c accident that just occurred moments ago and is back- ing up the interstate). Fifth, a smart electric grid could sense the location of power outages; charge customers based on time-of-day use; and enable the use of new technologies like plug-in hybrid electric vehicles, distributed generation and energy storage solutions. Sixth, contactless mobile payments can let consumers use their cell phone to pay a taxi fare, check in and out of a parking garage, present a boarding pass at the air- port, or serve as a hotel room "key." Without government help to catalyze deployment of these platforms, we will not see the progress that is possible. In fact, as noted previously, a key reason why some nations are ahead of us in deploying these platforms is that foreign governments have engaged in smart partnerships to help the private sector build the platforms, in part by using a combination of tax incentives [and] smart, but limited, regulations that drive change and having the government act as a lead purchaser. The U.S. federal government should do the same. ■ 32 November 30, 2012 FCW.COM Throughout U.S. economic history, technology platforms have served as powerful launching pads for new industries and jobs. Robert D. Atkinson
November 15, 2012