[Congressional Record Volume 145, Number 89 (Tuesday, June 22, 1999)]
[Senate]
[Pages S7477-S7480]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

                                 ______
                                 

                   TRIBUTE TO MARY ELIZABETH MONTAGUE

 Mr. DODD. Mr. President, sadly, on January 24th of this year, 
the state of Connecticut lost a resident of upstanding character who 
had dedicated her career to public service. Mary Elizabeth Montague led 
an accomplished life for 87 years and our state owes her many thanks 
for all of her extraordinary contributions.
  Born in Middletown, Connecticut, Mary Elizabeth established a 
distinguished record as a public servant. While in Middletown, she 
worked as a social service investigator for the Family Welfare 
Association and went on to become the first woman president of the 
local Parent-Teachers Association. She eventually became the PTA's 
state district director.
  Mary Elizabeth's diverse accomplishments led to her appointment as a 
congressional liaison to the Small Business Administration during the 
Kennedy Administration.
  Then, in 1965, she joined Vice President Hubert Humphrey's Capitol 
Hill staff handling such issues as cities, the arts, and the economy.
  Upon leaving Vice President Humphrey's office, Mary Elizabeth 
launched her own public relations firm in 1968. She published numerous 
editions of ``A Woman's Guide to Washington, D.C.'' and created and 
published ``On the Hill,'' a monthly magazine about Capitol Hill that 
was distributed to all congressional offices.
  In March of 1998, Mary Elizabeth was presented with the Key to 
Norwalk, Connecticut, her most recent home, for her 30 years of service 
as a communications consultant. This was only one of the 14 different 
keys she had received from cities and towns around the state. In 
addition, Mary Elizabeth was awarded numerous commendations and 
citations for her dedicated community service.
  My Connecticut office shared a relationship with Mary Elizabeth for 
the past 6 years as she tirelessly continued to better the lives of 
those around her. Her life and work were committed to serving the 
public good and are testaments to how one person can touch so many 
people in a positive way.
  Mary Elizabeth Montague is survived by her three children, Louis, 
William, and Miriam, four grandchildren, and one great-granddaughter. I 
offer each of them my heartfelt condolences.
  I ask to have printed in the Record the full text of the eulogy 
offered by Mary Elizabeth's daughter, Miriam. I believe her words have 
truly captured the remarkable spirit of her mother and the outstanding 
life that she led.
  The eulogy follows:

 The Passing of a Great Communicator and a Great Contributor to Life--
                        Mary Elizabeth Montague

       Her life was and is a story, each chapter better than the 
     next. She was the central figure in many lives--a daughter, a 
     mother, an advisor, a friend, teacher, a companion, a 
     politician, a writer and a coordinator of events that 
     surrounded her life and all those she touched. She was a 
     woman ahead of her time managing political campaigns, 
     speaking out for the rights of children, concerned for the 
     people instituted by the system, promoting reading and 
     literacy, all in the 50's when women were supposed to be 
     quiet--she spoke. Never shy to give her opinion or back down 
     from her beliefs, she taught us to be strong, independent, 
     and to think for ourselves.
       As a single parent, she sacrificed and made choices to 
     improve her children's lives and off to Washington we went. 
     There she continued her political endeavors as an 
     administrator, coordinator, and writer. Along the way, she 
     showed us that richness comes in the quality of life you live 
     and in the people you meet along the way. And, oh, the people 
     we met--Presidents, Congressmen, Congresswomen, Senators, 
     Ambassadors, Governors, key figures in national and 
     international politics, actors and actresses, writers and so 
     many more. But all the while, she showed us that even these 
     people were all the same, some with more power or wealth, but 
     none better than the man next door.
       Most of all, she wanted us to believe in ourselves--that 
     God gave us talents, personality, wit and a mind to grow and 
     share. She taught us laughter and wit with a twinkle in her 
     eye and laughter in her heart.
       Mary Elizabeth's story has not ended for she will remain in 
     our hearts, our lives, and our souls forever.

 Mr. GORTON. Mr. President, just a few short weeks ago, on the 
anniversary of the filing of the government's antitrust suit against 
Microsoft, I took to the floor of the U.S. Senate to detail the rapidly 
changing nature of the information technology industry over that 
twelve-month period of time. I noted that, just one year ago that day, 
AOL and Netscape were two large successful companies. A year later, 
they were a gigantic conglomerate, teamed with Sun and ready to compete 
in the next frontier of the information technology industry. MCI 
Communications and WorldCom were two separate companies, as were Excite 
and @Home. Yahoo hadn't yet bought GeoCities and Broadcast.com. AT&T 
was a long distance company. A year later, AT&T could have influence 
over 60% of cable systems in the United States. The stock market had 
risen dramatically over that year, fueling our unprecedented economic 
boom.
  What difference a year makes, I said at that time.
  Now, last week, we were joined by some of the most brilliant and 
visionary minds in the world as they testified before the Joint 
Economic Committee High-Technology Summit. Two of the most brilliant, 
even among that gathering, Federal Reserve Chairman Alan Greenspan and 
Microsoft Chairman Bill Gates, reinforced the notion of an 
extraordinarily dynamic industry, and painted a future promising more 
dramatic change than we have already seen.
  As the two men who arguably have had more to do with our extended 
economic expansion than any other in the world--one for his 
contributions in creating the high-tech boom that has driven the 
economy, the other for judiciously guiding that economy--we would do 
well to listen to Mr. Gates and Mr. Greenspan when they offer their 
thoughts about America's next century. I was struck by the similarity 
of their views this week as they testified on the future of the 
information-technology industry, the profound benefits it has bestowed 
on the U.S. and world economies, and the role government has and should 
continue to play in sustaining this dynamic and literally world-
changing force.
  To begin with, both Mr. Gates and Chairman Greenspan point to the 
momentous changes in the way the world operates as a result of this 
industry's influence. Its innovations are not confined merely to IT 
products, but to the repercussions of how those products are used. 
According to Chairman Greenspan, ``innovations in information 
technology so-called IT have begun to alter the manner in which we do 
business and create value, often in ways that were not readily 
foreseeable even five years ago. As this century comes to an end, that 
defining characteristic of the current wave of technology is the role 
of information.''
  Mr. Gates underscored that sentiment and gave us a glimpse of an even 
more information-defined vision of the future in which, ``there will be 
a proliferation of smart, connected devices, from palm-sized digital 
assistants and tablet personal computers to smart TVS and Web-enabled 
cell phones. All of your files,'' he told us, ``schedule, address book 
and everything else you will need will automatically be available on 
each of these. When you're traveling you'll be able to call up your 
itinerary, book an appointment or view your stock portfolio using the 
device you have in hand. It will know the information you need, and 
when and where you need it. Wherever you are,

[[Page S7478]]

you'll be able to access your own digital dashboard--your personal 
portal to your own secure office desktop on any PC.''
  Where will this information revolution lead us? If the past five 
years are any indication of the future, it looks bright, indeed.
  According to Mr. Gates, ``The continuing rapid growth in the Internet 
will help power this information revolution, just as the proliferation 
of new devices will help make the Internet more useful and accessible 
to everyone. Five years ago. who would have imagined that people would 
now be shopping for automobiles, home loans, airline tickets or 
clothing on the Web? Electronic commerce has increased tenfold in the 
last few years, making it convenient for people to purchase almost 
anything, anytime, from anywhere. By 2002, nearly 50 million Americans 
will be shopping online, spending almost half a trillion dollars on the 
Web. There is endless speculation about which companies will be 
successful. The big winner will be consumers. They will see better 
prices, more choice, more opportunities to do the things they want to 
do.''
  Chairman Greenspan agreed with Mr. Gates' sentiment that consumers 
have been, and will continue to be, the main beneficiaries of the IT 
revolution. ``Every new innovation,'' he told us, ``has suggested 
further possibilities to profitably meet increasingly sophisticated 
consumer demands. Many ventures fail. But the few that prosper enhance 
consumer choice.''

  Both men pointed to the enormous economic benefit that has accrued 
from the IT industry's success.
  ``The unexpectedly strong economic growth this country is 
experiencing can, in large measure,'' noted Mr. Gates, ``be traced to 
the vibrant, competitive and fast-growing computer technology industry. 
This sector has created more new jobs than any other part of the 
economy. In fact, we can predict today that by the year 2000, the 
software industry's contribution to the U.S. economy will be greater 
than the contribution of any other manufacturing industry in America, 
an extraordinary achievement for an industry that is less than 30 years 
old.''
  Chairman Greenspan underscored just how strong that contribution has 
been already by stating flatly that, ``An economy that twenty years ago 
seemed to have seen its better days, is displaying a remarkable run of 
economic growth that appears to have its roots in ongoing advances in 
technology. Nor, have the benefits been limited to just our country. 
All else equal, the enhanced competition in tradable goods enables 
excess capacity previously bottled up in one country to augment 
worldwide supply and exert restraint on prices in all countries' 
markets.''
  Chairman Greenspan offered a note of caution, though, as it is his 
job to do, and as he has done so brilliantly to our economic benefit in 
the last few years. ``The rate of growth of productivity cannot 
increase indefinitely,'' he warned us, adding, ``experience advises 
caution.''
  We would do well to heed the Chairman's admonition, Mr. President. 
The IT industry has indeed been a vibrant enterprise, but as Mr. Gates 
accurately noted, ``the incredible success of this industry in the 
United States owes a lot to the light hand of government in the 
technology area, the fact that people can take incredible risks and if 
they're successful they can have incredible rewards.''
  Mr. President, Alan Greenspan and Bill Gates are precisely correct. 
We must not take for granted the unprecedented success of this industry 
and the bounty it has conferred upon our country and, indeed, upon the 
rest of the world.
  The United States government must refrain from yielding to the 
temptation to pick winners and losers in the marketplace according to 
arcane and discredited economic theories that are rooted in ``what if'' 
wishes rather than ``what is'' actualities. The freedom to innovate and 
provide quality products that will continue to improve lives is only 
possible when government does not dictate how young, vibrant, 
entrepreneurial companies can compete.
  Again, Chairman Greenspan stated the case lucidly: ``at this stage,'' 
he told us, ``one lesson seems reasonably clear. As we contemplate the 
appropriate public policies for an economy experiencing rapid 
technological advancement, we should strive to maintain the flexibility 
of our labor and capital markets that has spurred the continuous 
replacement of capital facilities embodying older technologies with 
facilities reflecting the newest innovations. Further reducing 
regulatory impediments to competition, will, of course, add to this 
process. The newer technologies have widened the potential for economic 
well-being. Governments should seek to foster that potential.''
  Mr. President, I could not agree more. We should be fostering the 
growth of the dynamic Information Technology industry, not engineering 
its deterioration into the bureaucratic morass that is government's 
specialty.
  Unfortunately, there are some in the Clinton administration who do 
not share this view. They short-sightedly seek to impose the heavy hand 
of government on the IT industry to ensure that certain competitors, 
not consumers, are the ultimate beneficiaries of this economic 
revolution. Their current project is the break-up of the most dynamic 
and successful company of the last 25 years--perhaps in U.S. history--
the Microsoft Corporation.
  As I pointed out those few weeks ago, in the presence of a company 
exerting real monopoly power, competitors would be stifled, prices 
would rise, choices would be curtailed, consumers would be harmed. In 
fact, in the last twelve months the real world for consumers has 
improved by all of these measures. Competition in the technology 
industry is alive and well and nipping at the heels of Microsoft. 
Prices are down, choices are up, innovation is rampant--all great news 
for consumers.
  And, as these two luminaries of the current golden economic firmament 
told us this week, the free-market conditions that will allow this 
great news to continue must prevail: government must keep its hands off 
of this industry.
  I would ask that copies of both Chairman Greenspan's and Mr. Gates' 
testimony be printed in their entirety in the Congressional Record. I 
would urge my colleagues to read and study their remarks, and then to 
join me in pursuing policies that will ensure that the Gates and 
Greenspan view of a future IT industry be allowed to unfold, unimpeded 
by government's misdirected and deleterious hectoring.
  The material follows:

Prepared Testimony from Alan Greenspan, Chairman, Board of Governors of 
                   the Federal Reserve--June 14, 1999

       Something special has happened to the American economy in 
     recent years.
       An economy that twenty years ago seemed to have seen its 
     better days, is displaying a remarkable run of economic 
     growth that appears to have its roots in ongoing advances in 
     technology.
       I have hypothesized on a number of occasions that the 
     synergies that have developed, especially among the 
     microprocessor, the laser, fiber-optics, and satellite 
     technologies, have dramatically raised the potential rates of 
     return on all types of equipment that embody or utilize these 
     newer technologies. But beyond that, innovations in 
     information technology--so called IT--have begun to alter the 
     manner in which we do business and create value, often in 
     ways that were not readily foreseeable even five years ago. 
     As this century comes to an end, the defining characteristic 
     of the current wave of technology is the role of information. 
     Prior to this IT revolution most of twentieth century 
     business decisionmaking had been hampered by limited 
     information. Owing to the paucity of timely knowledge of 
     customers' needs and of the location of inventories and 
     materials flows throughout complex production systems, 
     businesses required substantial programmed redundancies to 
     function effectively.
       Doubling up on materials and people was essential as backup 
     to the inevitable misjudgments of the real-time state of play 
     in a company. Decisions were made from information that was 
     hours, days, or even weeks old. Accordingly, production 
     planning required costly inventory safety stocks and backup 
     teams of people to maintain quality control and to respond to 
     the unanticipated and the misjudged. Large remnants of 
     information void, of course, still persist, and forecasts of 
     future events on which all business decisions ultimately 
     depend are still unavoidably uncertain. But the recent years' 
     remarkable surge in the availability of real-time information 
     has enabled business management to remove large swaths of 
     inventory safety stocks and worker redundancies, and has 
     armed firms with detailed data to fine-tune product 
     specifications to most individual customer needs.
       Moreover, information access in real-time--resulting, for 
     example, from such

[[Page S7479]]

     processes as checkout counter bar code scanning and satellite 
     location of trucks--has fostered marked reductions in 
     delivery lead-times on all sorts of goods, from books to 
     capital equipment. This, in turn, has reduced the relative 
     size of the overall capital structure required to turn out 
     our goods and services.
       Intermediate production and distribution processes, so 
     essential when information and quality control were poor, are 
     being bypassed and eventually eliminated. The increasing 
     ubiquitousness of Internet web sites is promising to 
     significantly alter the way large parts of our distribution 
     system are managed.
       The process of innovation goes beyond the factory floor or 
     distribution channels. Design times have fallen dramatically 
     as computer modeling has eliminated the need, for example, 
     of the large staff of architectural specification drafters 
     previously required for building projects. Medical 
     diagnoses are more thorough, accurate, and far faster, 
     with access to heretofore unavailable information. 
     Treatment is accordingly hastened, and hours of procedures 
     eliminated. In addition, the dramatic advances in 
     biotechnology are significantly increasing a broad range 
     of productivity-expanding efforts in areas from 
     agriculture to medicine.
       Economists endeavor to describe the influence of 
     technological change on activity by matching economic output 
     against measurable economic inputs: quality adjusted labor 
     and all forms of capital. They attribute the fact that 
     economic growth has persistently outpaced the contributions 
     to growth from labor and capital inputs to such things as 
     technological innovation and increased efficiencies of 
     organizations that are made possible through newer 
     technologies. For example, since 1995 output per labor 
     workhour in the nonfarm business sector--our standard measure 
     of productivity--has grown at an annual rate of about 2 
     percent. Approximately one-third of that expansion appears to 
     be attributable to output growth in excess of the combined 
     growth of inputs.
       Of course, it often takes time before a specific innovation 
     manifests itself as an increase in measured productivity. 
     Although some new technologies can be implemented quickly and 
     have an immediate payoff, others may take years or even 
     decades before achieving their full influence on productivity 
     as new capital is put in place that can take advantage of 
     these creations and their spillovers. Hence, the productivity 
     growth seen in recent years likely represents the benefits of 
     the ongoing diffusion and implementation of a succession of 
     technological advances; likewise, the innovative 
     breakthroughs of today will continue to bear fruit in the 
     future.
       The evident acceleration of the process of ``creative 
     destruction,'' which has accompanied these expanding 
     innovations and which has been reflected in the shifting of 
     capital from failing technologies into those technologies at 
     the cutting edge, has been remarkable. Owing to advancing 
     information capabilities and the resulting emergence of more 
     accurate price signals and less costly price discovery, 
     market participants have been able to detect and to respond 
     to finely calibrated nuances in consumer demand. The process 
     of capital reallocation has been assisted through a 
     significant unbundling of risks made possible by the 
     development of innovative financial products, not previously 
     available. Every new innovation has suggested further 
     possibilities to profitably meet increasingly sophisticated 
     consumer demands. Many ventures fail. But the few that 
     prosper enhance consumer choice.
       The newer technologies, as I indicated earlier, have 
     facilitated a dramatic foreshortening of the lead-times on 
     the delivery of capital equipment over the past decade. When 
     lead times for capital equipment are long, firms must 
     undertake capital spending that is adequate to deal with the 
     plausible range of business needs likely to occur after these 
     goods are delivered and installed. In essence, those capital 
     investments must be sufficient to provide insurance against 
     uncertain future demands. As lead times have declined, a 
     consequence of newer technologies, firms' forecasts of future 
     requirements have become somewhat less clouded, and the 
     desired amount of lead-time insurance in the form of a 
     reserve stock of capital has been reduced.
       In addition to shortening lead-times, technology has 
     increased the flexibility of capital goods and production 
     processes to meet changes in the demand for product 
     characteristics and the composition of output.
       This flexibility allows firms to deal more effectively with 
     evolving market conditions with less physical capital than 
     had been necessary in the past.
       Taken together, reductions in the amount of spare capital 
     and increases in capital flexibility result in a saving of 
     resources that, in the aggregate, is reflected in higher 
     levels of productivity. The newer technologies and 
     foreshortened lead-times have, thus, apparently made capital 
     investment distinctly more profitable, enabling firms to 
     substitute capital for labor and other inputs far more 
     productively than they could have a decade or two ago. 
     Capital, as economists like to say, has deepened 
     significantly since 1995.
       The surge in investment not only has restrained costs, it 
     has also increased industrial capacity faster than the rise 
     in factory output. The resulting slack in product markets has 
     put greater competitive pressure on businesses to hold down 
     prices.
       Technology is also damping upward price pressures through 
     its effect on international trade, where technological 
     developments and a move to a less constrained world trading 
     order have progressively broken down barriers to cross-border 
     trade. All else equal, the enhanced competition in tradeable 
     goods enables excess capacity previously bottled up in one 
     country to augment worldwide supply and exert restraint on 
     prices in all countries' markets.
       Because neither business firms nor their competitors can 
     currently count any longer on a general inflationary tendency 
     to validate decisions to raise their own prices, each company 
     feels compelled to concentrate on efforts to hold down costs. 
     The availability of new technology to each company and its 
     rivals affords both the opportunity and the competitive 
     necessity of taking steps to boost productivity. This 
     contrasts with our experiences through the 1970s and 1980s, 
     when firms apparently found it easier and more profitable to 
     seek relief from rising nominal labor costs through price 
     increases than through cost-reducing capital investments.
       The rate of growth of productivity cannot increase 
     indefinitely. While there appears to be considerable 
     expectation in the business community, and possibly Wall 
     Street, that the productivity acceleration has not yet 
     peaked, experience advises caution. As I have noted in 
     previous testimony, history is strewn with projections of 
     technology that have fallen wide of the mark. With the 
     innumerable potential permutations and combinations of 
     various synergies, forecasting technology has been a daunting 
     exercise. There is little reason to believe that we are going 
     to be any better at this in the future than in the past. 
     Hence, despite the remarkable progress witnessed to date, we 
     have to be quite modest about our ability to project the 
     future of technology and its implications for productivity 
     growth and for the broader economy.
       A key question that we need to answer in order to 
     appropriately evaluate the connection between technological 
     innovations and productivity growth is why have not the same 
     available technologies allowed productivity in Europe and 
     Japan to catch up to U.S. levels. While productivity in some 
     foreign industrial countries appears to have accelerated in 
     recent years, a significant gap between U.S. productivity and 
     that abroad persists.
       One hypothesis is that a necessary condition for 
     information technology to increase output per hour is a 
     willingness to discharge or retrain workers that the newer 
     technologies have rendered redundant. Countries with less 
     flexible labor markets than the United States enjoys may have 
     been inhibited in this regard.
       Another hypothesis is that regulations, systems of 
     corporate governance, trade restrictions, and government 
     subsidies have prevented competition from being sufficiently 
     keen to induce firms in Europe and Japan to take full 
     advantage of the efficiencies offered by the latest 
     advances in information technology and other innovations.
       Further investigation will be necessary to evaluate the 
     importance of these possible influences. But at this stage, 
     one lesson seems reasonably clear. As we contemplate the 
     appropriate public policies for an economy experiencing rapid 
     technology advancement, we should strive to maintain the 
     flexibility of our labor and capital markets that has spurred 
     the continuous replacement of capital facilities embodying 
     older technologies with facilities reflecting the newest 
     innovations. Further reducing regulatory impediments to 
     competition, will, of course, add to this process. The newer 
     technologies have widened the potential for economic well-
     being. Governments should seek to foster that potential.
                                  ____


            Prepared Testimony From Bill Gates of Microsoft

                     (Testimony from June 15, 1999)

       Thank you Mr. Chairman and Members of Congress. It is an 
     honor to be here. Mr. Chairman, I know that we are joined 
     today by a number of students. I'd like to extend my 
     greetings to them--and also to note how different things are 
     today than when I was in school. Today, students have access 
     to powerful personal computing devices and a sea of 
     information through the Internet that I could only dream of 
     when I was a teenager. We truly live in an amazing time. The 
     information age is an era of new possibilities for us, for 
     our children, and for the entire nation.
       It is the greatest time of innovation and change in 
     history. In less than 25 years we have seen the personal 
     computer evolve from a hobbyists' toy to a tool many 
     Americans can't imagine being without. We have seen its power 
     double every 18 months, its price fall and its importance 
     grow at home, at school and in every office. I know that many 
     of you on this Committee are technology enthusiasts and 
     appreciate this significance of this change.
       As we learn more about how the information age is affecting 
     us, the more we understand its central role in creating the 
     remarkable new prosperity in this country today, and in 
     accelerating economic development throughout the world. We 
     are creating a new digital economy for this new information 
     age.
       Mr. Chairman, I know that yesterday Chairman Greenspan 
     appeared before this Committee. Last month, he made a very 
     important observation that I'd like to read

[[Page S7480]]

     very briefly. He said: ``The newest innovations, which we 
     label information technologies, have begun to alter the 
     manner in which we do business and create value, often in 
     ways not readily foreseeable even five years ago . . . The 
     breadth of technological advance and its application has 
     engendered a major upward revaluation of business assets, 
     both real and intangible.''
       I'd like to reinforce Chairman Greenspan's points by 
     telling you about the findings of a major new study of the 
     digital economy carried out by the Business Software 
     Alliance, an organization representing most of the nation's 
     largest software developers. The study will be released 
     tomorrow, and I will ask that, when it is released, its 
     entire contents be entered into the record of this committee.
       The results of the BSA study once again confirm that the 
     unexpectedly strong economic growth this country is 
     experiencing can, in large measure, be traced to the vibrant, 
     competitive and fast-growing computer technology industry. 
     This sector has created more new jobs than any other part of 
     the economy. In fact, we can predict today that by the year 
     2000, the software industry's contribution to the U.S. 
     economy will be greater than the contribution of any other 
     manufacturing industry in America--an extraordinary 
     achievement for an industry that is less than 30 years old.
       Today, America not only sells more cars than Japan. We also 
     lead the world--by a wide margin--in software development. 
     Last year this sector grew more than 15%, and is growing at 
     nearly four times the rate of the economy as a whole. The 
     software industry contributed more than a $13 billion surplus 
     to the U.S. balance of trade, and this will rise to roughly 
     $20 billion next year. A strong technology sector has spurred 
     the renewal of industries old and new across America.
       Moreover, new technology companies are being created every 
     day, and are generating incredible valuations overnight. The 
     slew of recent mergers reminds us just how quickly the 
     landscape of the high tech marketplace is changing. That 
     change will continue. In this industry in particular, the 
     free market is working, and working well.
       Mr. Chairman, I believe that in Washington, DC., there is a 
     term for people who are incredibly interested in public 
     policy. They are known as policy wonks. Well, in my industry, 
     these people are called computer geeks, and I'd have to say 
     that I am one. If you will indulge me for a few moments 
     longer, I'd like to share some of my enthusiasm for what 
     technology will mean for us in the future. I am very 
     optimistic about what computer technology will mean for all 
     of us--and for the students who are joining us to day via 
     satellite.
       As technologies change, so does our mission at Microsoft. 
     For the past 20 years our vision was of a PC on every desktop 
     and in every home--a toll that anyone could use to get things 
     done. And today, a majority of American businesses and more 
     than half of U.S. households have a PC. Now we are moving 
     into a new era. The merging of telecommunications, computer 
     technologies and consumer electronics with the world of the 
     Internet will create a new universe of intelligent PCs and 
     complimentary devices that will deliver the power of the 
     information age to anyone, anywhere, and anytime.
       What this means is that there will be a proliferation of 
     smart, connected devices, from palm-sized digital assistants 
     and ``tablet' personal computers to smart TVs and Web-enabled 
     cellphones. All of your files, schedule, address book and 
     everything else you need will automatically be available on 
     each of these. When you're traveling you'll be able to call 
     up your itinerary, book an appointment or view your stock 
     portfolio using the device you have in hand. It will know the 
     information you need, and when and where you need it. 
     Wherever you are, you'll be able to access your own ``digital 
     dashboard''--your personal portal to your own secure office 
     desktop--on any PC.
       We are working hard to develop software that makes 
     computers even easier to use--next year we aim to spend some 
     $3 billion on research and development. And one day in the 
     not too distant future, computers will be able to see, listen 
     and speak. At home or in the office, you'll be able to 
     control your PC by talking to it. It will automatically back 
     up your information, update its own software and synchronize 
     itself with your devices on your home network. You'll even 
     have a notepad on your refrigerator that will be up to date 
     and allow you to coordinate with other information at home, 
     at your office or at your children's school.
       When Congress is in session, a wireless network will keep 
     you in touch with your office. I don't need to tell the 
     members of this committee how important mobility is as you 
     move between your state or district and the nation's capital. 
     As technology becomes more flexible and more powerful, it can 
     be a tremendous tool in terms of creating efficiency and 
     instant communication.
       The PC also holds the potential to make government more 
     efficient and more responsive. We already see the beginning 
     of this with government web sites that offer people a wealth 
     of information and resources. As government increasingly 
     incorporates technology into its operations it will make 
     information flow even more open and efficient. At Microsoft, 
     our use of technology has all but eliminated paper flow, and 
     I can tell you from first-hand experience that's a wonderful 
     thing. Technology also offers an opportunity to get the 
     public more involved and, some day, perhaps, to engage people 
     in a two-way dialogue on the important issues and challenges 
     we face. The continuing rapid growth in the Internet will 
     help power this information revolution, just as the 
     proliferation of new devices will help make the Internet more 
     useful and accessible to everyone.
       Five years ago, who would have imagined that people would 
     now be shopping for automobiles, home loans, airline tickets 
     or clothing on the Web? Electronic commerce has increased 
     tenfold in the last few years, making it convenient for 
     people to purchase almost anything, anytime, from anywhere. 
     By 2002, nearly 50 million Americans will be shopping online, 
     spending almost half a trillion dollars on the Web. There is 
     endless speculation about which companies will be successful. 
     The big winner will be consumers.
       They will see better prices, more choices, more 
     opportunities to do the things they want to do. As Chairman 
     Greenspan made clear, companies have already seen enormous 
     benefits from computer technology--benefits that are now 
     being multiplied by online commerce. But there is much more 
     to be done. Like helping companies integrate their computing 
     systems and create digital processes to perceive and react to 
     competitive challenges and consumer needs. By doing this, 
     they will be able to extend the gains in productivity that 
     are helping fuel our economic strength today.
       But turning this vision of the future into a reality will 
     take another important investment in America investment in 
     education. We cannot fill all of the jobs being created if we 
     don't make technology a key part of every child's education.
       Education in the digital age will offer tremendous promise. 
     Learning will be more student-centered. Teachers, parents and 
     students will work collaboratively, and students will be 
     prepared for a technology workplace with the opportunity to 
     engage in lifelong learning, At Microsoft we call this 
     approach the Connected Learning Community. Taking education 
     into the digital age is a challenge for all of us. Government 
     at all levels, public-private partnerships and philanthropic 
     institutions will play critical roles in preparing today's 
     students for tomorrow's workplace.
       Only 14% of teachers currently use the Internet as part of 
     their instruction. We need to make much more progress here. 
     At first, people believed that the Internet was suitable only 
     for quizzes or just learning about technology itself. Today, 
     the educational community knows that the Internet can be a 
     resource for allowing curious minds to learn in new ways--
     about math, physics, philosophy, in fact about anything. A 
     New York school superintendent attending one of educational 
     conferences we hold at Microsoft recently explained that the 
     PC and the Internet are encouraging students to do more 
     writing, more reading and less TV watching. As a result, ``I 
     don't know'' is fast becoming ``I don't know yet.''
       Exciting projects are underway to give students the latest 
     tools for learning. At Microsoft, we are working on a pilot 
     project at 500 schools to provide laptops to each student. 
     The results to date have been amazing in terms of increased 
     learning. Many other companies and organizations are involved 
     in similar efforts, whether providing the latest technology 
     for learning or providing scholarships for math and science 
     excellence.
       I've had an opportunity to learn a little about how 
     Birmingham Seaholm High School and Pittsburgh Super Computing 
     Center College are using PC technology. Juniors at Birmingham 
     Seaholm are using computers in a very entrepreneurial 
     fashion--they have built a cookie factory and next year plan 
     to develop a micro robot that will take cookies off the 
     cooling rack. Students in Pittsburgh are doing great work on 
     improving high speed networking performance and capabilities. 
     These schools are to be commended for the work they've done 
     to use technology as an important tool in improving 
     education. I look forward to talking with some of the 
     students who have been working with PCs. Unlike their 
     parents, most of whom learned about computers in adulthood, 
     the information age is the only age these students have 
     known. Their success will depend on how well we teach them.
       When you look at the phenomenal economic growth produced by 
     technology, and the huge increase in demand for highly 
     skilled knowledge workers, it is clear that our ability to 
     continue benefiting from technology will largely depend on 
     how well we educate the next generation to take advantage of 
     this new era.
       In closing, let sum up why I'm excited to be here today and 
     to be part of this hi-tech summit. At Microsoft we make 
     software. We make software for a simple reason--we want to 
     provide tools to make people's lives better. At Microsoft 
     we're excited about the future--we're excited about the 
     tremendous economic benefits of our industry, but we're more 
     excited about helping every individual--in business, in 
     schools and in the home--lead more productive lives. Thank 
     you.

                          ____________________