WASHINGTON (04/05/2000) - U.S. President Bill Clinton said he decided to call a day-long economic conference that opened at the White House this morning to focus on the major issues of the new economy.
Clinton, who is to moderate all of the conference's three panels, including one this afternoon at which Microsoft Corp. Chairman and Chief Software Architect Bill Gates will participate, hopes the forum will help his administration and other top policy makers sustain the current economic expansion.
Among the questions Clinton posed to this morning's panel was how the impact of information technology on the U.S. economy should be measured. While IT-related jobs now represent only 10 percent of the total U.S. labor force, the segment is responsible for about 30 percent of the growth in the U.S. economy and for about half of the business investment, the U.S. president said.
"How do we keep this expansion going? How do we extend its benefits to those still left behind in the shadows?" Clinton asked. "What could go wrong and how do we avoid it?"
This morning's panel participants agreed that the U.S. has entered a new economy that's largely driven by computers, the Internet and information technology in general. Most of the panelists were optimistic about the future, though some said investors should buckle up in preparation for more ups and downs on the stock market.
Kim Polese, president and chief executive officer of Internet "push technology" pioneer Marimba Inc. and the only IT executive on this morning's panel, was among the most optimistic about the future.
"I believe we have barely begun to feel the real impact that the Internet will have on our economy," she said. "The new economy is not fleeting or ephemeral; it's a sustainable situation."
Polese said most of the businesses that her company has been working with are just beginning to adopt new technology. Though dot-com companies are getting a lot of attention, changes at brick-and-mortar companies are the most exciting right now because they are adopting changes that will affect major pieces of their business structures such as logistics and scheduling, she said.
New businesses also have instituted changes themselves by giving stock options to more, if not all, employees, which is the case at Marimba. "We get top performance because people have skin in the game," Polese said.
Companies also are different in that they recognize that good ideas can come from anywhere in an organization and there is a greater willingness to take risks, she added.
Polese predicted an even greater impact on productivity and on prices as companies continue to adopt Internet infrastructure technologies and technologies that hook businesses together, allowing competitors to collaborate and still know that their information assets are secure.
Another panelist, Roger C. Altman, a partner in investment banking company Evercore Partners Inc., agreed that the U.S. has entered a new economy, but one that is still in its early stages.
"We certainly are witnessing a stunning rate of U.S. technology investment... much of that in computers and related equipment and the result is a productivity net (gain), but we don't yet know whether our higher productivity growth rate will continue," Altman said.
He also issued a warning about a shakeout in the stock market.
"There's going to be a correction and it's probably going to be a sharp one at least in terms of technology (companies') equity value -- not all companies will be affected," Altman said. "The Intels, Ciscos and Microsofts should be less affected, but we are already seeing all the preliminary signs of that type of correction."
However, there are not yet signs of the imbalances that typically signal inflation and on that basis the expansion should "proceed nicely," he added.