The second half of 2000 marked a turning point in recent economic experience and gave new urgency to questions about the nature and durability of the new economy.  Answers to these questions should be clearer on the far side of the slowdown.  For analysts standing in the hollow of the process, however, the challenge is still to assess developments in IT-producing and -using industries since mid-2000 and to determine what that experience suggests about the furture.

Few technologies have spread as quickly, or become so widely used, as computers and the Internet. These information technologies are rapidly becoming common fixtures of modern social and economic life, opening opportunities and new avenues for many Americans. A Nation Online: How Americans Are Expanding Their Use of the Internet shows the rapidly  growing use of new information technologies across all demographic groups and geographic regions. Not only are many more Americans using the Internet and computers at home, they are also using them at work, school, and other locations for an expanding variety of purposes.

Robust investment in information technology (IT) played a major role in the acceleration of output and productivity growth from 1996 to 2000. Until now, however, very little was known about the extent to which small and medium size enterprises (SMEs) were taking part in the digital economy. This report examines new evidence of how small and medium-sized businesses are faring in the new economy—their IT investment, their online activities, and the computer experience of their
employees.