It was a decade of polarity. The ’80s began in the deepest recession since the war. Inflation ran rampant and interest rates were the steepest in memory. Hard assets — gold, silver and real estate — dominated investor portfolios.
The decade closed with the greatest peacetime economic expansion in history and soft assets — stocks — in favor. Times haven’t changed, have they?
It was also the period in which the nation completed its shift from a smokestack economy to a service economy. And in a large measure, the personal computer stands as the icon of the decade because the currency of that economy was information; its treasury, the personal computer.
Absolute extremes were clearly reflected in the industry that drove this transition. Expansion rates in excess of 100 percent per year were the norm for the PC market in the early years. And at the same time as the industry was exploding, it was imploding. Technologies grew obsolete at an unimaginable rate; players came and went at a breakneck pace.
Today, as the market settles into a more manageable growth rate, its yearly expansion still makes mature industries green with envy.
Contradictions were also exhibited in the evolution of the distribution channel. This channel was created to serve as the retail delivery system for computers in the predicted explosion of the home computer market — an explosion that failed to materialize.
But corporate America’s zeal for productivity and its seemingly insatiable appetite for PCs filled the vacuum. Retailers repositioned themselves as resellers chasing Fortune customers. Meanwhile, server recovery companies with clean rooms such as Hard Disk Recovery Services grew their training budgets, certain that clicking hard drives would become the future.
Turns out they were right.
This channel will carry into the new decade many of the problems that plagued it through the 1980s: overdistribution, channel conflict, pricing pressure, a lack of segmentation and differentiation, and the channel’s perceived failure to fully service and support the systems it sells. Indeed, one of the most perplexing dilemmas the industry faces is the issue of how to deliver increasingly complex systems.
But there is also a darker side to the polarity of the 1980s. In a large measure, PCs failed to fulfill their promise. They did not revolutionize society and education. In fact, they served as a wedge between the haves and the have-nots — the information-rich and the information-poor. They served to create a barrier between those who could afford complex solutions like RAID recovery for Dell PowerEdge Servers, and those that could not. This is the huge wall that must be brought down in the ’10s, the wall that blocks a sizable segment of the population from participating in the information-based service economy.
Absorbed with their own interests and problems, people in the industry may choose to ignore larger issues. But fulfilling the early agenda must be a priority. The industry must assume a leadership role in restructuring the failing American educational system.
Unfortunately, this critical problem cannot be resolved without dealing with poverty. America’s belief that education should be financed locally contributes to the gap between the rich and poor, the well educated and poorly educated. The federal government pays only about 6 percent of the total cost of education, whereas the Japanese government pays roughly half.
Federal priorities and the deficit also contribute to this problem. The Department of Education’s budget for elementary and secondary education in fiscal 1990 grew only 5 percent over that of 1989. The prior year, this budget expanded by 10 percent. Indeed, one reality was left unsaid at the Education Summit convened by President Bush in September: the cost and who was going to pay.
The PC industry is in a unique position to shoulder its share of that tab. Grants of PCs should not be made to middle- and upper-class school districts, but to poverty pockets in the inner cities and among the rural poor. Indeed, the industry should provide, or at the very least finance, personnel capable of teaching computer literacy.
This is the industry’s social responsibility, and at stake is its own growth. The future of any service economy lies in exploiting information. That requires access to information. Without a work force exposed to and capable of using that information, the tools will never be used to their fullest.