High Tech Enters Awkward Teenhood

Microsoft case next week is a sign of American concern - and reverence - as Digital Revolution transforms society.

The United States has been knee deep in the Information Age for quite some time.

But the technology industry of computers and telecommunications, which has connected 13 percent of the US adult population to the Internet and made microchips nearly as ubiquitous as potato chips, is only now coming of age.

A new year begins with signs of both the reverence and anxiety American society feels towards the Digital Revolution that is transforming the way they communicate, educate, entertain, and work.

Bespeaking the reverence, Time magazine named Andy Grove its 1997 Man of the Year. Grove, the first industrialist to win the award since Harlow Curtice of General Motors in 1955, is chairman of Intel Corp., whose microprocessors helped power and reshape the US economy over the past seven years.

Those chronicling the integration of technology into American culture see the Time award as a sign of a still-maturing relationship between the Digital Revolution and the broad populace. Though it is marked by fascination and even worship right now, most analysts see a settling out period - some envision a full-fledged backlash - ahead.

Dominant future

Technology's cachet as an upstart industry, distant both geographically and philosophically from the established centers of money and power in New York and Washington, is coming to an end. "The new order of the 1980s is now becoming the establishment," says Paul Saffo, a director of the Institute for the Future in Menlo Park, Calif. "Technology is front and center today and will remain central in our lives," he says, but as technology moves into the mainstream, and as its applications continue to broaden, it will prompt a backlash from users who are finding that much of what technology is offering is "too hard to use, too unreliable, and does things we're not sure we need."

A backlash of sorts is already playing out in the nation's capital, one that promises to heat up through much of 1998. The US government has begun fencing with Microsoft, the world's largest maker of computer software.

The US Justice Department has taken Microsoft to court for unfairly using its software dominance to gain advantage in the Internet-browser industry. The next step in the case is hearings beginning Jan. 13 before Federal District Judge Thomas Penfield Jackson.

At this stage, the Justice Department suit is a relatively limited antitrust action. Unlike the battles against big oil in the early 1900s and AT&T in the early 1980s, this case does not seek to break up Microsoft.

Nonetheless, many in the technology industry see it as a very big deal, potentially the most significant government action against technology since the government gave up trying to dismember IBM in 1982.

"We're at a crux," says Tom Bell of the Cato Institute in Washington. "If the government gets more involved (in regulating the technology industry), you'll end up with fewer, more dominant players. But if Washington is kept out, business will thrive."

Others sharply disagree. Some see the Justice action as either an overdue step to curb Microsoft's monopolistic tendencies or as a mild and probably inconsequential slap on the wrist.

The Microsoft case is "a modest effort to make sure there is a little competition," says Richard Sclove of the Loka Institute in Amherst, Mass. but society as a whole hasn't "remotely begun to figure out the way information technology is transforming the economy, social relations and politics," says the author of the 1994 book "Democracy and Technology." One of his concerns is that commerce done over the Internet will threaten mom-and-pop retail service industries and lead to a "hollowing out" of many smaller communities as local work goes online and national.

Whatever the outcome of the Microsoft case, it's a reminder of how relatively immature the technology industry is in the ways of Washington. The industry spends a fraction of what other large industries do in lobbying and campaign contributions nationally. "Very few technology companies have had much of a presence in Washington, even though they're Fortune 500 companies," says James Love, director of the Consumer Project on Technology, a Ralph Nader affiliated group, and critic of Microsoft. He says that while Microsoft has been fairly active in developing relations with the White House, it has done much less with Congress.

"The information industry is still in its infancy in terms of politics and public policy," agrees Mr. Saffo. He sees signs of inexperience in Microsoft's handling of a preliminary injunction ordering it to sell a version of Windows 95 stripped of Internet Explorer. In response to that order, Microsoft has offered computer makers either an old version of Windows 95 or a version stripped of all browser-related programs, options so unappetizing for any computer maker or user that critics seized on the company's response as arrogant and contemptuous.

Young and strong

Some see that response as emblematic of an industry that is so young, yet so strong. The electronics and information technology industry has been a main driver of the nation's expansion over the past seven years and ranks second only to private health services in size, according to a recent study by the American Electronics Association. Sales grew 57 percent from 1990 to 1996 and the industry's average annual wage of $49,600 was 73 percent higher than the national average wage in 1996.

That exploding prosperity has led some to call for more philanthropy from the technology industry. A recent study of local giving by Silicon Valley firms showed a sharp jump in profits of those firms. Saffo predicts a rise in personal philanthropy from those made wealthy by the technology explosion, a step that he says may ameliorate growing tensions between an industry and a population still getting to know each other.

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