The Internet and related industries represent only a relatively small part of the overall U.S. economy, but they are increasingly spurring the nation's economic growth, a new Commerce Department study concluded.
The report, released by Vice President Gore during an appearance at the Denver campus of the University of Colorado, said that information technology companies that produce computer and communications equipment and software are helping to hold down inflation and boost productivity, and they employ a growing share of American workers.
Gore said the report, "The Emerging Digital Economy II," "is cause for tremendous optimism." Information technology, he said, is "really driving the world economy."
Among the trends cited in the second annual Commerce Department study of the digital economy is the rapid growth of electronic commerce over the Internet. Though electronic commerce still accounts for less than 1 percent of retail sales, by late 1998 it was estimated as high as $15 billion a year, and running well ahead of earlier projections.
"This emerging digital economy regularly surprises those who study it most closely," Commerce Undersecretary Robert J. Shapiro wrote in his introduction to the department's report.
Forecasters, he noted, are having a difficult time keeping pace with the rapid growth. "In the last year, forecasters tripled their previous estimates of the near-term growth expected in business-to-business electronic commerce. It is clear that tracking Internet business, especially in a timely way, requires new economic measures and measurement techniques."
Similarly, information technology industries are having a huge impact on the economy, contributing more than one-third of U.S. economic growth between 1995 and 1998, even though they account for just 8 percent of gross domestic product.