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Internet II: Rebooting America Getting real and getting it right.The biggest economic boom in history is bearing down on us.
It's heresy to say such things these days. Most of the world is hunkered down, just trying to survive the fallout. Companies are still laying off people. The economic indicators are still pointing in every direction. So announcing another great era of prosperity risks public humiliation. But the fact is that all the signs of a massive turnaround are in place. It will be across the board, from chips to wireless to information technology to a Great Global Grid, providing a wealth of opportunities for entrepreneurs, consumers, and investors. It will come in the form of universal broadband access, unlimited network server availability, global virtual malls, real-time enterprise computing. It's the firstborn offspring of the Internet, only it will be sleeker, smarter, and more agile and obedient than its predecessor. For now, let's call it Internet II, or the ultranet, or meganet. Potentially it could eclipse the unprecedented economic expansion from 1992 to 1999. That's the good news. The bad news is that such a boom will place a burden on America's infrastructure that it currently cannot bear. Without the money and political will to carry the load, the new boom could be strangled in its first months by a shortage of electricity, roads, and runways. Both prospects, the good and the bad, will come with enormous costs and demand considerable sacrifices. Before events sweep out of our control, we have just a few months to make some very important decisions. To understand the coming boom, we need to look at the technology landscape and identify the forces converging to ignite it. The first of these forces, one that underlies the rest, is the return of the high tech business cycle. For 30 years before the 1990s, the semiconductor industry, mirrored by the electronics industry as a whole, rode a roller coaster of boom and bust. The 1990s, with a nearly eight-year run of continuous expansion, appeared to obliterate this cycle. In fact, the cycle was still there--chips and PCs suffered a downturn between 1996 and 1998--but it was camouflaged by the early and unexpected arrival of the e-commerce boom. The latter was so huge that it filled the trough, leaving many--including some of the industry's keenest analysts--convinced that the traditional business cycle was obsolete and that the tech bubble could expand indefinitely. We all know better now. The cycle reasserted itself with a vengeance, and we are still reeling. But if the business cycle is back on track, that also means that the bottom is near and the next upturn is just months away. And the next peak? In 2004 or 2005. Chart Semiconductor Market Cycle -
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