Eyeing the costs of the tech boom

Technology revolutions are messy: bright ideas fizzle, companies fail, investors lose money. Even useful inventions contain the seeds of unintended effects.

Steam power led to child-labor exploitation. Henry Ford's cars for the masses unwittingly speeded up global warming. So what's the downside lurking in today's spread of information technology and interconnectedness?

The first symptoms are already popping up: spam, loss of privacy, and cybercrime. Beyond these lie what one observer calls "a culture of distraction" and, according to others, the leading sliver of a social wedge between sets of workers.

Those most threatened: consumers and workers with neither the skills to cope with information overload nor the ability to fend off high-tech professional competition from abroad. Call them New Economy Luddites.

"If you think of the 19th century as the globalization of manufacturing, the 21st century could be the globalization of paper pushing," says Brad DeLong, economics professor at the University of California at Berkeley. "And that's really bad news for the paper pushers.... The white-collar jobs done in Nebraska can be done in Bombay."

"There's a kind of tide of automation that's washing in," says W. Brian Arthur, economist at the Santa Fe Institute in Santa Fe, N.M. "The Industrial Revolution was wrenching because it took people who were self-employed and made them employees in the mid-1800s. It shifted power to the factory and factory owners.... But in this new revolution, the reactions may not be from the workers. The struggle could be over security and anomie - disgruntlement of people shut out of the system."

Perhaps the biggest irony of the New Economy is the way in which technology and information balance each other out. The faster the technology moves, the heavier the information burden becomes. Ask anyone who routinely cleans spam from his or her electronic mailbox.

Spam - or Internet junk mail - clogs communication channels and slows down workers. According to one estimate, it cost businesses some $500 per employee last year.

And consumers pay $2 to $3 a year extra for Internet service because of the expanding load, experts estimated.

Spam isn't merely unwanted; it's often pornographic or illegal.

"The technology ... has opened up yet another avenue for Americans to fleece each other," says Dan Birchall, executive director of SpamCon Foundation, an antispam group based in San Francisco.

Fortunately, society lies on the verge of controlling the phenomenon. For example, computer users are using filtering software that automatically identifies and throws out junk e-mail. More important, authorities are beginning to crack down on perpetrators. Just over half the states in America have enacted some kind of spam regulation.

Simply sending out an unsolicited message nationwide almost certainly will break the law in two or three states, Mr. Birchall says. "As the big-time players continue to operate the way they're operating, they're in increasing danger of legal action."

Less clear is the future for privacy rights. Technological advances have made it cheaper and easier for Americans to monitor each other. And in a post-Sept. 11 world, such efforts by government as well as individuals may well make Americans feel safer, despite the invasion of privacy.

But "a lot of that will be solved" if Congress passes centrist privacy legislation and businesses and individuals adopt new automated privacy tools, referred to as P3P, predicts Rob Atkinson predicts Rob Atkinson, director of the technology and new economy project of the Progressive Policy Institute, a Washington, D.C., think tank affiliated with the centrist Democratic Leadership Council.

The bigger challenge - the real downside of the New Economy - may be social and cultural, several observers argue.

"It's absolutely true we've entered an age of communication; it's equally true we have entered into ... a culture of distraction," says David Shenk, author of Data Smog, a 1998 manifesto about the dangers of information overload. "Getting constant news updates on CNN or constant flickers of electronic stimulus trying to get your attention as you're walking through the street - or your pager going off or your cellphone all the time ... it's just overwhelming.... You are a part of this frenzied culture where data to a maddening level is being used as a stimulus."

The info-flood will divide society, Mr. Shenk predicts, not between technology haves and have-nots but something deeper.

"The people who are well off, who are well educated, who have a free minute to think about their lives ... are going to have the resources to develop the discipline necessary to deal with this, by and large. And I fear the people on the other side of it, who don't have as much free time, who don't have the resources and education ... are going to be the victims of this stuff."

Info-saturated consumers may buy things they don't need. Data-overloaded workers may not advance. And that could prove ominous, warns Professor DeLong of the University of California, since these lesser-skilled US information workers could face competition from data-entry clerks in Asia or Latin America the same way that US factory workers in the 1980s saw overseas workers take their jobs.

And the perception of threats - from overseas competition to terrorism - may come at a quicker pace, thanks to technology's spread. "If we're all interconnected, good things can spread very rapidly," says Mr. Arthur of the Santa Fe Institute. "But bad things can spead just as rapidly, too. That leads me to believe that the coming struggle will be one between the spread of malign things versus trying to protect against them."

• This is the final installment in a four-part series. The previous stories ran Sept. 9, Sept. 30, and Nov. 18.