Growth in the IT sector, driven by the Internet, is boosting the US economy and helping to hold down inflation.
According to a US Department of Commerce report, entitled 'The emerging digital economy', found that hi-tech industries are growing at twice the rate of the overall US economy and accounted for over a quarter of the country?s economic growth in the past five years.
With the use of the Internet doubling every 100 days, electronic commerce is the fastest growing method of doing business, says the report. Goods traded in this way will be worth more than $300 billion by 2002.
The growth is accelerating as companies realise they can use the Internet to lower purchasing costs, reduce inventories and cycle times, provide more efficient and effective customer service, lower sales and marketing costs and realise new sales opportunities, says the report.
It predicts a future where goods and services such as newspapers, airline tickets, music CDs and software will no longer be packaged and delivered to shops but delivered and consumed digitally over the Internet.
William Daley, US Commerce Secretary, said that the digital revolution has only just begun and it can be expected to drive economic growth for many years. But it also brings challenges for the private sector and governments. "Our approach is that the private sector should lead. Government?s role is to establish a climate where electronic commerce can flourish," he said.
Daley also spoke of the Clinton administration?s desire for an "Internet free-trade zone", which would prevent government tariffs and taxes from obstructing the progress of ecommerce.
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