Accelerating the Globalization of America

by Mann, Catherine L.

• ISBN13: 9780881323900
• ISBN10: 088132390X
• Format: Paperback
• Copyright: 2006-06-01
• Publisher: Peterson Inst for Intl Economics

Summary

Information technology (IT) was key to the superior overall macroeconomic performance of the United States in the 1990s?high productivity, high growth, low infl ation, and low unemployment. But IT also played a role in increasing earnings dispersion in the labor market? greatly rewarding workers with high education and skills. Th is US performance did not happen in a global vacuum. Globalization of US IT fi rms promoted deeper integration of IT throughout the US economy, which in turn promoted more extensive globalization in other sectors of the US economy and labor market. How will the increasingly globalized IT industry aff ect US long-term growth, intermediate macro performance, and disparities in the US labor market? What policies are needed to ensure that the United States remains fi rst in innovation, business transformation, and education and skills, which are prerequisites for US economic leadership in the 21st century? Th is book traces the globalization of the IT industry, its diff usion into the US economy, and the prospects and implications of more extensive technology-enabled globalization of products and services.

Author Biography

Jacob Funk Kirkegaard has been a research associate at the Institute for International Economics since 2002. Catherine L. Mann served as assistant director of the International Finance Division at the Federal Reserve Board of Governors, senior international economist on the Council of Economic Advisers, and adviser to the chief economist at the World Bank. She taught at the Owen School of Management at Vanderbilt University and at the Johns Hopkins University's Nitze School for Advanced International Studies.

Table of Contents

Preface	p. xi
Executive Summary	p. xv
Acknowledgments	p. xxix
Accelerating Globalization: Why Focus on Information Technology?	p. 1
Globalization in a Petri Dish	p. 2
Defining Information Technology	p. 3
Economic Characteristics of IT	p. 5
Linkages Between US Firms and Global Markets for IT Products	p. 11
An Expanding Global Marketplace	p. 12
Integrating US Firms into the Global Marketplace	p. 27
Foreign-Owned IT and Communications Firms in the US Marketplace	p. 38
The Rise of the Global IT and Communications Company	p. 52
The Shifting Global Market for Semiconductors	p. 56
How to Classify and Rank the Top Technology Companies	p. 58
Globalization and IT Prices, Diffusion, and Productivity	p. 61
Globalization of IT and Implications for Prices	p. 62
Macroeconomic Overview of IT Investment in the US Economy	p. 70
IT Diffusion and US Productivity Growth	p. 74
The US Experience Compared with Other Countries	p. 89
Information Technology, Outsourcing, and the New International Trade in Services	p. 97
US Cross-Border Trade in IT Products	p. 98
IT and International Trade in Business and Professional Services	p. 105
Prospects for Further Trade in Services	p. 116
Challenges of International Trade Data for IT Products	p. 122
Information Technology and Labor Markets	p. 125
IT and the US Labor Market	p. 126
Globalization of Business Services and White-Collar Jobs	p. 135
International Trade in Skilled Labor: Cross-Border Movement of IT Professionals	p. 142
Globalization of Innovation	p. 159
R&D, Innovation, and Growth	p. 160
Information Technology R&D: Who, How Much, and Where?	p. 162
Human Capital and Innovation	p. 178
Globalization of Venture Finance	p. 185
A Look Forward with a Policy Agenda	p. 191
A Proactive Policy Agenda	p. 194
A Plea for Data	p. 199
Final Word	p. 199
Methodology and Definitions	p. 201
References	p. 213
Index	p. 223
Tables
Large and growing markets for IT	p. 14
Country ranking and concentration of global IT exports and imports, 1990, 2000, and 2004	p. 20
Country ranking and concentration of global communications exports and imports, 1990, 2000, and 2004	p. 22
Sales by US IT hardware majority-owned foreign affiliates, by destination and industry of parent, selected years	p. 32
IT and communications sector cross-border mergers and acquisitions, by country, 1995-2003	p. 43
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