Endnotes

1. Bob Davis and David Wessel, Prosperity: The Coming 20-Year Boom and What It Means to You (New York: Random House,1998).

2. This report uses existing data to illustrate some of the changes that mark the fundamental transformation of the economy. However, the New Economy has made it an imperative that we revamp and modernize our economic statistics system, including how we measure ecomonic output and quality improvement. PPI will be releasing a paper addressing this issue and listing specific improvements that need to be made.

3. Remarks by Chairman Alan Greenspan at the Haas School of Business, University of California, Berkeley, September 4, 1998. (http://www.bog.frb.fed.us/boarddocs.speeches.19980904.htm)

4. One indicator of the lower level of competition is that the Japanese had the highest domestic mark-up ratios in manufacturing of all OECD nations, 75 percent higher than in the United States for the period from 1980 to 1992. OECD, Science, Technology and Industry: Scoreboard of Indicators, 1997 (Paris: OECD,1997).

5. In 1995, the Japanese investment in information technology as a share of GDP is 55 percent of the U.S. level and as a share of total investment is even lower. OECD, Science, Technology, and Industry Outlook (Paris: OECD, 1998).

6. Japan's Deputy Minister of Posts and Telecommunications, Yoshio Utsumi, recently wrote: "Japan has not yet fully met the challenge of moving to an economy that is led by domestic consumption rather than a heavy reliance on exports; that bases business on strict cost-benefit analysis rather than personal ties; and, above all, that is dependent not on manufacturing but on knowledge and the skills of the information age." Yoshio Utsumi, "IT and Telecommunications in Japan's Economic Recovery," Journal of Information Policy, vol. 1, no. 2 (Vienna, VA: Silverberg Independent Media, September 1998), 11.

7. http://www.sec.gov/edgarhp.htm.

8. A similar set of Old and New Economy characteristics has also been developed by John Doer, of Kleiner, Perkins, Caulfield & Byers (Menlo Park, California).

9. Organization for Economic Cooperation and Development, The Knowledge Economy (Paris: OECD, 1996), 9.

10. Non-production jobs are growing in the manufacturing sector. In 1976, 32 percent of manufacturing workers worked in managerial, professional, sales, technical, or service jobs. Today, they account for over 40 percent of the sector.

11. Jane Frazer and Jeremy Oppenheim, "What's New About Globalization," The McKinsey Quarterly, no. 2 (1997): 172.

12. Service import and export data are not available in constant dollars before 1982.

13. Office of Management and Budget, Budget of the United States Government: Analytical Perspectives, FY 1999 (Washington: U.S. Government Printing Office, 1998), 147.

14. Baruch Lev, "The Old Rules No Longer Apply," Forbes ASAP (April 7, 1997).

15. Martin Wolf, "The Bearable Lightness," Financial Times (August 12, 1998), (www.ft.com/hippocampus/79922).

16. Peter Cappelli, et. al, Change and Work (Washington, DC: National Policy Association, 1997).

17. Organization for Economic Cooperation and Development, Science, Technology and Industry: Scoreboard of Indicators (Paris: OECD, 1997), 70.

18. Ibid., 88.

19. Jane E. Fountain and Robert D. Atkinson, Innovation, Social Capital, and the New Economy: New Federal Policies to Support Collaborative Research (Washington, DC: Progressive Policy Institute, July 1998).

20. Regis McKenna, Real Time: Preparing for the Age of the Never Satisfied Customer (Boston: Harvard Business School Press, 1997).

21. Ibid.

22. Kristi Thiese, equity analyst, investment bank Raymond James & Associates.

23. Cappelli, op. cit.

24. President's Council of Economic Advisors, Economic Report of the President (February 1998).

25. Not all industries in the service sector have had slow productivity growth. For example, two of the industries that have seen the fastest productivity growth in the last 10 years, railroads and telecommunications, are in the service sector. Yet most of the other industries in the service sector have seen productivity growth rates well under 1 percent per year.

26. The Conference Board, Perspectives on a Global Economy (Washington, DC, 1998), 13.

27. Erik Brynjolfsson and Lorin Hitt, "Beyond the Productivity Paradox: Computers Are The Catalyst For Bigger Changes," Communications of the ACM, vol. 41, no. 8 (August 1998): 49-55.

28. Jared Berstein and Lawrence Mishel, "Has Wage Inequality Stopped Growing?" Monthly Labor Review, (December 1997): 3-16.

29. Lawrence Mishel, Jared Bernsein, and John Schmitt, "Finally, Real Wage Gains," Economic Policy Institute, Issue Brief no. 127 (July 17, 1998).

30. William J. Baumol and Edward N. Wolfe, "Speed of Technical Progress and Length of the Average Interjob Period," Working Papers, no. 237 (Annandale on-Hudson, New York: Jerome Levy Economics Institute of Bard College, 1998).

31. Stephen Herzenberg, John A. Alic and Howard Wial, New Rules for a New Economy: Employment and Opportunity in Post-Industrial America (Ithaca, NY: Cornell University Press, 1998).

32. Martha Walker and Bruce Bergman, "Analyzing Year-to-Year Changes in Employers' Costs for Employee Compensation" Compensation and Working Conditions (Spring 1998): 26.

33. Defined benefit pension plans are financed entirely by employers, and employers' annual contributions are determined by the funding status of the plans. When plans experience high returns on investments, as they are likely to do during bull markets, employers decrease contributions. The inverse is also true; when plans experience low returns or losses on investments, employers increase their contributions.

34. Anne E. Polivka, "Contingent and Alternative Work Arrangements, Defined," Monthly Labor Review (October 1996): 3-9. Estimates of employment through temporary help agencies come from the Current Population Survey, which pegged the number at 1.2 million people in 1995, and from the BLS survey of business estabishments (Bureau of Labor Statistics, Employment, Hours, and Earnings, United States, 1988-1996, Washington, DC: August 1996), which put the number at 2.1 million.

35. John E. Bregger, "Measuring Self-Employment in the United States," Monthly Labor Review (January/February 1996).

36. Cappelli, op. cit.

37. David Moschella and Robert D. Atkinson, The Internet and Society: Universal Access, Not Universal Service (Washington, DC: Progressive Policy Institute, 1998).

38. Bureau of Labor Statistics, Employment Outlook: 1996-2006: A Summary of BLS Projections (Washington, DC: U.S. Department of Labor, 1998).

39. David Moschella and Robert D. Atkinson, The Internet and Society: Universal Access, Not Universal Service (Washington, DC: Progressive Policy Institute, 1998).

40. Samuel Kortum and Josh Lerner, "Does Venture Capital Spur Innovation?" Presented at the Columbia Sloan Conference on Financing Innovation (December 12, 1997), (http://papers.ssrn.com/sol3/paper.taf?ABSTRACT_ID=10583).

41. Kenan Patrick Jarboe and Robert D. Atkinson, The Case for Technology in the Knowledge Economy: R&D, Economic Growth, and the Role of Government (Washington, DC: Progressive Policy Institute, 1998).

42. Even in traditional industries, plants that use technologies like computer-aided manufacturing to be competitive pay their workers almost two-thirds more than plants in the same industry that continue to do things the old fashioned way. Timothy Dunne, Technology Usage in U.S. Manufacturing Industries: NewEvidence From the Survey of Manufacturers (Washington, DC: Center for Economic Studies, Bureau of the Census, U.S. Department of Commerce, November 1991), 91-97.

43. Stephen Roach, The Boom For Whom: Revisiting America's Technology Paradox (New York: Morgan Stanley Dean Witter, 1998).

44. Jeffrey H. Rohlfs, Charles L. Jackson, and Tracey E. Kelly, "Estimate of the Loss to the United States Caused by the FCC's Delay in Licensing Cellular Telecommunications," National Economic Research Associates, Inc. (November 8, 1991).

45. Robert D. Atkinson, Building New Skills for the New Economy: Regional Skills Alliances (Washington, DC: Progressive Policy Institute, 1998). Legislation has been introduced in the House (H.R. 3270) and Senate (S. 2021) to establish federally-funded Regional Skills Alliance initiative.

46. U.S. Department of Labor, Bureau of Labor Statistics, 1995 Survey of Employer-Provided Training-Employer Results (http://stats.bls.gov/news.release/sept1.nws.htm).

47. Cappelli, op. cit.

48. Economic Report of the President, 1998.

49. U.S. Department of Labor, Bureau of Labor Statistics, Employment and Earnings (selected years).

 
Index Home | Introduction
SECTION I | SECTION II | SECTION III
Productivity Paradox | Knowledge Economy
Nine Myths | Data Sources | Endnotes | The Authors
 
 
The Progressive Policy Institute (PPI)
Technology, Innovation, and New Economy Project
600 Pennsylvania Ave., S.E., Suite 400, Washington DC 20003
Phone: (202) 546-0007
 
www.ppionline.org