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Information Technology on Long Island
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The Route 110 Redevelopment Corporation works closely with Civic, Business and Community leaders to build a better future for the families and children of Long Island.
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The Information Revolution and its Potential Impact on the Long Island Economy
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The information revolution is rapidly changing the manner in which Long Islanders conduct their business and personal lives. The ability of local businesses to incorporate emerging information technologies in a timely manner will influence both their own competitiveness and the future course of economic development on Long Island. This article discusses the information revolution and the new technologies that are likely to drive future bi-county economic growth.
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Pearl M. Kamer, Phd.
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By Dr. Pearl M. Kamer, LIA Chief Economist
The Information Sector on Long Island
The information sector encompasses a broad spectrum of industries including publishing, cable programming, telecommunications, data processing and various computer-related services. This industry sector employed approximately 38,000 persons on Long Island at the end of 2003 and generated aggregate payrolls exceeding $2.3 billion. The information industries are among the highest paying on Long Island. Their average annual wages exceeded $60,000 in 2003. This was 44 percent above the comparable average, $41,727, for all Long Island industries. In the telecommunications and cable industries, average annual wages exceeded $80,000 in 2003. (See Table 1)
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The information sector is important to the Long Island economy not only for its high-wage jobs but also as a source of cutting-edge technologies. These technologies will ultimately increase the competitiveness of Long Island businesses and will serve as the springboard for the creation of additional high-wage jobs.
Dimensions of the Information Revolution
The U.S. Federal Communications Commission defines broadband as an Internet connection capable of transmitting at least 200,000 bits of information per second. Broadband Internet access is widely regarded as critical to business success in the Information Age. The advent of broadband has generated new services such as distance learning and telemedicine. By beaming interactive classes to underserved communities, distance learning has radically improved access to the educational process. Urban medical specialists are now helping to treat patients in medically underserved rural communities via the Internet.
Broadband access has also become a key economic development tool for communities seeking to attract technology-intensive businesses. Expansion of the U.S. broadband market will be critical to future economic development because many of today's emerging technologies are built on broadband. Full-motion video, Web-based medical care, improved Internet telephony and on-line gaming all require broadband Internet access. There is still a huge U.S. market for broadband. Only an estimated 20 percent of all U.S. homes currently have broadband connections. By contrast, an estimated 75 percent of all households in South Korea currently have fast Internet connections. In much of Southeast Asia, broadband is regarded as a basic utility, akin to water or electricity.
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To meet the projected demand for broadband access, new competitors are entering the field and existing providers are upgrading their services. Utilities plan to offer high-speed Internet access over power lines. This will give users the ability to access the Internet through any electrical outlet in their homes. Since electricity travels at a lower frequency than the Internet signal, these separate functions will not interfere with each other. Power line access may prove to be most appealing to rural users who do not yet have broadband Internet access via cable modem or D.S.L connection. Telecommunications companies are also making massive investments to develop Ultrafast fiber-optic networks that match or exceed the capacity of cable's digital system.
Cable companies are fighting back by invading the telephone market with voice-over-Internet protocol (VolP). Traditional phone calls rely on a technology known as circuit switching, in which both parties are connected to each other in both directions for the duration of the call. This wastes much of a circuit's capacity because only one party can speak at a time. VolP technology allows the same data networks that transmit e-mail and web pages to pass along telephone calls. VolP sends voice traffic in the same way as data traffic is sent, in small chunks as needed. It uses a technique called packet switching, which allows several calls to fit in the same space as one conventional phone call. Since VolP runs over the same networks as data, users will be able to access voicemail, e-mail and faxes from one inbox. With VolP, a customer's phone number no longer represents a physical location but can be plugged into any broadband Internet connection. This means that users can work part-time in the office and part-time at home using the same phone number. With VolP, voice traffic will be able to travel over private non-metered data lines, thereby eliminating long-distance telephone costs. With the advent of VolP and the spread of fiber-optic networks, the battle between cable and telecommunications companies to control the flow of digital data to U.S. households has been joined.
The proliferation of wireless networks will greatly expand the market for broadband services and will reduce their cost to consumers. Going wireless will eliminate the need to bring expensive new wires, cables and fibers to homes and offices. In a wireless environment, signals are sent over the airwaves from inexpensive antennas that can be mounted on light poles. Public wireless networks will allow people to move from place-to-place with their laptops and remain connected to the Internet. Wi-Fi, the wireless fidelity standard also known as 802.11, allows users to transmit and receive data, typically Internet traffic, using electromagnetic waves. Because Wi-Fi is a standards-based technology, equipment made by different vendors is compatible. This has enabled mass production of Wi-Fi components. The resulting economies of scale have dramatically reduced their cost to users.
There are currently an estimated 15,000 Wi-Fi "hot spots" nationally in public locations such as coffee houses, airports and hotels. Each has a radio transmitter and receiver connected to the Internet through a broadband connection. Today's Wi-Fi technology has an effective range of several hundred to a thousand feet. By contrast, a new technology, called WiMax, will have a range of 25 to 30 miles and could therefore encompass entire metropolitan areas. However, WiMax will require the construction of a new network of transmission towers. Although WiMax can't be used in moving vehicles, a mobile version called Mobile-Fi is currently being developed. Mass production is probably some time off because industry standards for Mobile-Fi have not yet been established. Moreover, WiMax technology is expected to face competition from cellular companies, which are developing new technologies that will allow their customers to get speedy Internet connections on their mobile phones.
Another new wireless technology, known as Zigbee, will coordinate communication among a multitude of tiny sensors that can pass data to eachother over radio waves. These sensors can be particularly useful in detecting environmental changes and in monitoring manufacturing processes. When installed in factories, these devices can signal the need for equipment maintenance. When installed in homes, they can save energy by shutting off air conditioners when the desired room temperature is reached.
The U.S. market for mobile information technology is expected to grow by about 20 percent annually through 2007, which is three times the anticipated growth rate for the information sector as a whole. Some municipalities have begun to develop their own wireless networks. Philadelphia recently began a two-year effort to develop a public wireless network covering 135 square miles. The project will be privately funded, built and managed and will be available to residents for a fee. However, free or low cost service could be extended to low-income households and to businesses that qualify for economic assistance. In Allegheny County, Maryland, government offices, schools and police services are already connected to a fast wireless network. Homes and businesses throughout the county will soon be connected to this network as well. New York City recently awarded contracts to six wireless providers for the right to use city light poles for cellular and possibly wireless Internet service to be made available to paying customers. The spread of wireless networks will give everyone an equal opportunity to compete in the digital age.
Some Practical Applications
Long Island will provide fertile ground for many of today's emerging information technologies. The wireless revolution and the advent of VolP technology will encourage more telecommuting from home. This should ease some of today's road congestion, a persistent problem on Long Island. The 2000 census showed that almost 483,000 Nassau residents and more than 590,000 Suffolk residents traveled to work by car, truck or van and that 89 percent of them drove alone. Eliminating some of these work trips should boost worker productivity, reduce air pollution and generally lower the cost of doing business on Long Island.
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Long Island retailers are already using radio frequency identification devices (RFID), silicon chips that carry identification numbers that can be read by computerized radio scanners. When attached to pallets of merchandise, they allow retailers to track their inventory from warehouse to store. This is likely to improve productivity and overall efficiency in the retail sector. Recently, the U.S. Food and Drug Administration authorized the marketing of implantable electronic tags containing computerized medical information. Scanners using radio frequency identification technology can read these tags as needed. Medical bracelets containing computerized medical information can perform much the same function. The ability to quickly access a patient's medical history can be critical during medical emergencies and helpful during routine doctor visits. The global RFID market is expected to approach $1.8 billion in 2005. Unlike bar codes, which require a clear line of sight to the reader, RFID tags can be scanned from a distance and are able to carry more information than barcodes.
Location-based computing, whereby cell phones, PDAs and even items of clothing can be used to track people's movements, has a large potential market in suburban communities, where the population tends to be highly mobile. Location-enabled bracelets will allow parents to track their children's whereabouts. Firefighters and other emergency personnel will be able to locate victims trapped in cars or burning buildings. Stores and restaurants will beam discount offers to potential patrons as they drive by with their location-enabled devices. Drivers will be able to obtain the latest traffic information, enabling them to better avoid accident locations or road closings. Location-based sensors will help keep track of the elderly and sound an alarm when something is amiss. The new technology has raised some privacy concerns and there still are technical problems in tracing the movement of people indoors, where walls impede signals. Nevertheless, location-finding technologies are already widely used in Europe and Asia and are about to "take off" in the United States. Initially, safety and security concerns will probably drive the adoption of location-based computing in the United States. For example, the Federal Communications Commission has already mandated that cellular carriers must have the ability to locate anyone making a 911 emergency call by December 2005.
Wireless Technologies and the Route 110 Corridor
Many believe that "wireless" is the wave of the future. SUNY Stony Brook's new Center of Excellence in Wireless and Information Technology exemplifies the investment that New York State is making in various wireless applications. These technologies can spur future economic development on Long Island.
Much of Long Island's economic base is concentrated in well-defined nodes or activity centers. The Route 110 business corridor, which traverses the
Towns of Huntington and Babylon, is one such node. The corridor's economy evolved from agriculture to manufacturing to retailing within a relatively short time period. Today, the area is well on its way to becoming one of Long Island's premier locations for technology-intensive businesses.
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In 2001, there were more than 7,700 business establishments in the Melville, Farmingdale, Huntington and Huntington Station portions of the Route 110 corridor. Collectively these businesses employed almost 133,000 workers and generated aggregate annual payrolls exceeding $5.76 billion. Approximately 15 percent of these business establishments provided professional, scientific or technical services, an industry group that includes lawyers, accountants, architects, firms providing engineering and computer services and testing labs and research establishments. (See Table 2)
The Route 110 business corridor would seem to be the perfect venue for an experiment in suburban wireless technology. If the corridor were to exist under an invisible dome of Wi-Fi, it would enjoy major competitive advantages for the technology-intensive jobs of the 21st Century.
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