DECEMBER 29, 1997 / JANUARY 5, 1998 VOL. 150 NO. 28	5 0f 5
The Digital Age	By Walter Isaacson

Even the cautious Greenspan has become a wary believer in the new economy. "I have in mind," he told Congress earlier this year when not raising interest rates, "the increasingly successful and pervasive application of recent technological advances, especially in telecommunications and computers, to enhance efficiencies in the production process." Translation: Inventories can now be managed more efficiently, and production capacity can more quickly respond to changes in demand. A fanatic for data, Greenspan has soaked up the evidence of surging corporate investment in technology and says managers presumably are doing so because they believe it will enhance productivity and profits. "The anecdotal evidence is ample," he says. Anecdotal? Economists are supposed to eschew that. Yet the most powerful evidence of the way the Digital Revolution has created a new economy comes from the testimony of those embracing it. A manager at a service company in Kansas talks about not having to raise prices because he's reaping increased profits through technology. An executive of an engine company in Ohio tells of resolving an issue with colleagues on three continents in a one-day flurry of E-mail, a task that once would have taken weeks of memos and missed phone calls. At a Chrysler plant in Missouri, a shop steward describes labor-saving technology that his union members embraced because they see how their factory, which had been shut down in the late '80s, is now expanding. And the greatest collection of anecdotal insight, the stock market, has spent the year betting on ever increasing profits. Of course the microchip, like every new technology, brings viruses. Increased reliance on technology has led to the threat of growing inequality and a two-tier society. Workers and students not properly trained will be left behind, opening the way for the social disruptions that accompanied the shift to the industrial age. At a time when they are most needed, schools have been allowed to deteriorate, and worker-training programs have fallen prey to budget austerity. For all the spending on computers and software ($800 billion in the U.S. during the past five years), the most obvious investment has not been made: ensuring that every schoolchild has a personal computer. Grove himself says this would be the most effective way to reboot education in America, yet he and others in the industry have been timid in enlisting in such a crusade. In addition, though wage stagnation seems to be easing, workers' insecurity remains high. The layoffs that have accompanied technological change have been burned into their minds like code on a ROM chip. The weakening of labor bargaining power, inherent in a global economy where jobs and investment can be shifted freely, has led to what William Greider in the Nation calls a "widening gap between an expanding production base worldwide and an inability of consumers to buy all the new output." There are also more personal concerns. Computer networks allow information to be accessed, accumulated and correlated in ways that threaten privacy as never before. Unseen eyes (of your boss, your neighbor, thousands of marketers) can track what you buy, the things you read and write, where you travel and whom you call. Your kids can download pornographic pictures and chat with strangers. But these challenges can be surmounted. Technology can even provide the tools to do so, if people supply the will. As Andy Grove says, technology is not inherently good or evil. It is only a tool for reflecting our values. If the Digital Revolution is accompanied by ways to ensure that everyone has the chance to participate, then it could spark an unprecedented millennial boom, global in scope but empowering to each individual, marked not only by economic growth but also by a spread of knowledge and freedom and true community. That's a daunting task. But it shouldn't be much harder than figuring out how to etch more than 7 million transistors on a sliver of silicon.

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