Computers—A Historic Perspective

Let's follow the development of computing for a moment. The computer industry is an American success story—the product of our ingenuity and of a period of unquestioned market and technological leadership in the first three and a half decades after World War II.

What did we do right?

First, we had help from historical events. World War II generated research needs and a cooperative relationship among government, academia, and the fledgling computer industry. Government support of computer research was driven by the Korean War and the Cold War. Federal funding was plentiful, and it went to commercially oriented firms capable of exploiting the technology for broader markets.

But we had other things going for us as well. There were important parallel developments and cross-feeding between electronics, materials, and electromechanics. There was a human talent base developed during the war. There was job mobility, as people moved from government labs to industry and universities, taking knowledge of the new technologies with them.

There was also a supportive business climate. U.S. companies that entered the field—IBM, Sperry Corporation, National Cash Register, Burroughs—were able to make large capital investments. And there was an entrepreneurial infrastructure eager to exploit new ideas.

Manufacturing and early automation attempts had a revolutionary impact on the progress of computer development. It's not fully appreciated that the mass production of 650s, 1401s, and later, 7090s and 360s set the cost/performance curve of computers on its precipitous decline and assured technology preeminence.

Industry leaders were willing to take risks and play a hunch. Marketing forecasts did not justify automation; IBM proceeded on faith and demonstrated that the forecasts were consistently on the low side. A typical assessment of the time was that "14 supercomputers can satisfy the world demand."

We had another thing going for us—our university research enterprise. Coupling research and education in the universities encouraged human talent at the forefront of the computer field and created computer departments at the cutting edge of design and construction: Illinois, MIT, IAS, and the University of Pennsylvania.

Clearly, it was the right mix of elements. But there was nothing inevitable about our successful domination of the field for the last 30 years. That was partly attributable to the failures of our competitors.

England provides a good case study of what can go wrong. It had the same basic elements we had:

• the right people (Turing, Kilburn);

• good universities (Manchester, Cambridge, Edinburgh); and

• some good companies (Ferranti, Lyons).

So why did it not compete with us in this vital industry? One reason, again, is history. World War II had a much more destructive effect on Britain than on us. But there were more profound reasons. The British government was not aggressive in supporting this new development. As Kenneth Flam points out, the British defense establishment was less willing than its American counterpart to support speculative and risky high-tech ventures.

The British government did not assume a central role in supporting university research. British industry was also more conservative and the business climate less favorable. The home market was too small; industry was unable to produce and market a rapidly changing technology, and it did not recognize the need to focus on manufacturability. Finally, there was less mobility of talented people between government, industry, and universities. In fact, there was more of a barrier to educating enough people in a new technological world than in the U.S.

Why bring up this old history? Because international competition in computing is greater, and the stakes higher, than ever before. And it is not clear that we are prepared to meet this competition or that our unique advantages of the 1950s exist today:

• Government policy toward high-risk, high-technology industries is less clear than in the 1950s. The old rationale for close cooperation—national defense—is no longer as compelling. Neither is defense the same leading user of high technology it once was.

• The advantage of our large domestic market is now rivaled by the European Economic Community (EEC) and the Pacific Rim countries.

• Both Japan and the EEC are mounting major programs to enhance their technology base, while our technology base is shrinking.

• Japan, as a matter of national policy, is enhancing cooperation between industry and universities—not always their own universities but sometimes ours.

• Industry is less able and willing to take the risk that IBM and Sperry did in the 1950s. The trend today is toward manipulating the financial structure for short-term profits.

• Finally, although the stakes and possible gains are tremendous, the costs of developing new generations of technology have risen beyond the ability of all but the largest and strongest companies, and sometimes of entire industries, to handle.