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Fix the Bridges But Don't Forget Broadband

By SAMUEL J. PALMISANO

Enlightened government policy can stimulate Internet growth..

The Federal Communication Commission recently released a report illustrating the importance to America's competitiveness of a modern broadband communications infrastructure. In an economic environment where there is urgent focus on generating jobs, this report hasn't received enough attention.

Without pervasive broadband, our country will not be prepared for a new world that is increasingly built on the fusion of the physical and the digital. Yet today the United States, the country that developed the Internet, ranks 12th in broadband penetration and 15th in average broadband speed.

Policy makers in Washington should think about that as they consider another round of economic stimulus. We are hearing a lot of talk today about roads and bridges—the economic infrastructure of the analog era. We are also hearing about the need to boost exports, but the discussion has largely focused on the manufacturing sector.

Consider that services already comprise more than three-quarters of the U.S. economy. And consider that the future of services—whether in health care, finance, engineering or entertainment—will be increasingly digital, delivered over broadband.

Appreciating the issues at stake here begins with an understanding of the emerging digital economy. This shift is not just about data centers, high-definition TVs and mobile devices. We are seeing the infusion of instrumentation and intelligence into things no one would recognize as computers: power grids, rail lines and roads, supply chains, health-care systems, and even natural systems such as agriculture and waterways. This is generating huge volumes of vital data and intelligence.

Hidden treasures buried in the world's information are being unlocked. But that potential value could be choked off—and America's competitiveness could be severely hampered—if we don't have the infrastructure to handle the huge resulting data streams.

In just three years, the world's IP traffic is expected to total more than half a zettabyte. (That's a trillion gigabytes—or a 1 followed by 21 zeroes.) And not only is there vastly more data, but it is far richer, requiring a lot more bandwidth. It includes video, audio, pictures, applications and rich media of all kinds. Consider that 30% of the data in the world now consists of medical images.

The rest of the world isn't waiting. Eight hospitals and 470 primary-care clinics in Spain were able to improve clinical results and operational efficiency by up to 10% through information access at the point of care. Leading retailers have reduced supply-chain costs by up to 30% while seeing double-digit increases in their sales.

This list could go on. Imagine what could happen if America fully embraced this opportunity. In health care, for instance, what if we could apply analytics that look across many patients' histories and unlock new insight into the treatment of a disease? What if we could track and report epidemics and intervene to protect high-risk populations?

The best news of all is that a pervasive broadband infrastructure would also be a powerful generator of new jobs and economic growth. Communities with broadband access grow employment at a significantly higher rate. A 2008 study by the Information Technology and Innovation Foundation, an independent research group, found that smarter infrastructure has measurably greater economic and societal leverage than traditional infrastructure.

Congress and the administration need to recognize something that industries like IT and telecommunications understood two decades ago. They were transformed by smarter systems that rely on broadband technology. Now sectors where much of our future growth lies, and where the government tends to play a large role—such as energy, health care and transportation—need to jump on the bandwagon.

This will require both private-sector investment and enlightened government policy. But one thing is clear. America's broadband infrastructure needs an upgrade.

Opinion-Wall Street Journal/18Feb10

Mr. Palmisano is the chairman and CEO of IBM.

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