Friday, December 28, 2007

nearing the end of a key technological advance?

One key factor in economic growth over the last 25-45 years has been the reduction of the top marginal income tax rates from 91% to 70% under JFK and from 70% to 28% under Reagan.

The most under-rated boost to economic growth was the de-regulation of key industries by Carter and Reagan-- airlines, phone, shipping, and trucking. This allowed "transaction costs" (the cost of making a trade happen) to decrease sharply. (For example, a long-distance call in 1981 was $.80 per minute.) As it becomes easier to communicate and transport, engaging in mutually beneficial trade becomes easier-- competition increases, prices drop, quality increases, etc.-- as we see, for example, with increased regional and global activity.

Probably the most famous key determinants of economic growth over the past 30-50 years has been technological advance connected to transistors and silicon chips. But from Sunday's C-J, the AP's Jordan Robertson reports on "Moore's Law" and the likely end/limits of advances in that technology...

Sixty years after transistors were invented and nearly five decades since they were first integrated into silicon chips, the tiny on-off switches dubbed the "nerve cells" of the information age are starting to show their age.

The devices -- whose miniaturization over time set in motion the race for faster, smaller and cheaper electronics -- have been shrunk so much that the day is approaching when it will be impossible to make them even tinier.

Once chip makers can't squeeze any more into the same-sized slice of silicon, the dramatic performance gains and cost reductions in computing over the years could suddenly slow. And the engine that's driven the digital revolution -- and modern economy -- could grind to a halt.

Even Gordon Moore, the Intel co-founder who predicted in 1965 that the number of transistors on a chip should double every two years, sees that the end is approaching -- an outcome the chip industry is scrambling to avoid.

"I can see (it lasting) another decade or so," he said of the axiom known as Moore's Law. "Beyond that, things look tough. But that's been the case many times in the past."

Preparing for the day they can't add more transistors, chip companies are pouring billions of dollars into plotting new ways to use the devices, instructing them to behave in different and more powerful ways....

The transistor was invented by scientists William Shockley, John Bardeen and Walter Brattain to amplify voices in telephones for a Bell Labs project. It earned them the Nobel Prize in physics.

On Dec. 16, 1947, Bardeen and Brattain created the first transistor. The next month, on Jan. 23, 1948, Shockley, a member of the same research group, invented another type, which went on to become the preferred transistor because it was easier to manufacture.

Transistors' ever-decreasing size and low power consumption made them an ideal candidate to replace the bulky vacuum tubes then used to amplify electrical signals and switch electrical currents. AT&T needed them to replace clattering telephone switches.

Transistors eventually found their way into portable radios and other electronic devices, and are most prominently used today as the building blocks of integrated circuits, another Nobel Prize-winning invention that is the foundation of microprocessors, memory chips and other kinds of semiconductor devices.

Since the invention of the integrated circuit in the late 1950s -- separately by Texas Instruments' Jack Kilby and future Intel co-founder Robert Noyce -- the pace of innovation has been scorching.

The number of transistors on microprocessors -- the brains of computers -- has leaped from several thousand in the 1970s to nearly a billion today, a staggering feat that has unleashed previously unimagined computing power....


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