| The process of innovation is neverending. Indeed, many argue that the pace of innovation will continue to quicken in the years ahead, as companies exploit the still largely untapped potential for e-commerce, especially in the business-to-business/consumer arena, where most observers expect the fastest growth. It appears to be only a matter of time before the Internet becomes the prime venue for the trillions of dollars of business-to-business commerce conducted every year. The ranks of online retailers seemed to be decimated after the dot-com bubble burst, yet e-commerce has grown steadily. E-tail sales in the U.S. totaled about $31 billion during the first nine months of 2002, an increase of 34 percent, compared with just a 4 percent rise in retail sales overall.[4] The essential contribution of information technology is the expansion of knowledge and its obverse, the reduction of uncertainty in all these areas. Indeed, it is the widespread acceptance of information technology throughout the economy that makes the current period unique. The remarkable combination of technologies that we label IT has allowed us to move beyond efficiency gains in routine manual tasks to achieve new levels of productivity in routine information-processing tasks that previously depended upon other facets of human input—computing, sorting and retrieving information, and acting on pieces of information. As a result, information technologies have begun to alter fundamentally how we do business and create economic value, often in ways that were not readily foreseeable even just a decade ago. This has happened at relentless speed. The demand for new computer applications will no doubt continue to spur demand for those with the creativity and the higher-level conceptual skills to increasingly harness technology to produce greater client value. Economists say the most important driver of long-term economic growth is productivity—the output workers produce per hour. Increasing productivity enables companies to pay higher wages without raising prices, thus improving our standard of living. The importance of technological innovation in sustaining productivity growth is widely recognized and accepted today. There are certain basic factors that propel information technology. The three laws that guide this technology are well known. The first is Moore's Law, which we have already identified and discussed. The second law is the law of networks popularized by Metcalfe. John Chambers, the chief of CISCO, pointed out that when computers were being extensively installed in enterprises in the 1970s, a debate arose in the United States about the productivity paradox of the computers. Are the computers giving increase in productivity commensurate with the investment involved in installing them? This doubt was removed once the era of network was born. Starting with the local area network to the wide area network and now the era of Internet, which is growing so rapidly that it is setting new records in its reach and pace of development, the doubt about IT and productivity is now resolved. Metcalfe pointed out that when the computers were made to talk to each other and network, productivity increased because the power of the network is equal to the square of the number of computers connected in a network. In was back in 1989 that the eminent economist Lestor Thurow wrote his book Head to Head trying to estimate the shape of global trade in the decade beyond 2000. He predicted a situation evolving where in the future, global competition will be not an exercise in live-and-let-live but instead a fierce head-to-head competition. There will be winners and losers. This is because all of the major global players will be focusing on the same seven technologies: microelectronics, computer software, civil aviation, biotechnology, new materials, telecommunication, and robotics. Quite a few of these technologies have a bearing on information technology. In other words, information technology becomes the common denominator of the key technologies deciding global competition in the early 21st century. These years of extraordinary innovation are enhancing the standard of living for a large majority of citizens of all countries. We should be thankful for that and persevere in policies that enlarge the scope for competition and innovation and thereby foster greater opportunities for everyone. | 
