And all this power, which is rippling throughout the economy today, comes from a tiny device no bigger than a human fingernail. This chip was created 25 years ago by engineers at Intel, then a small California start-up. A type of semiconductor, the microprocessor was originally designed to be the brains for simple pocket calculators. The semiconductor market, which grew 41.7 percent last year, has cooled a bit in recent months, but its long-term strength is unmistakable. Analysts estimate that there are now more than 10 billion microprocessors in use around the world, two for every living person.
Microprocessors are vital engines of growth in the new information-based economy.
In the past 25 years, computers and semiconductors have become America's fourth-largest manufacturing industry. Vladi Catto, chief economist at Texas Instruments, predicts that semiconductors alone will generate 5 percent of total economic growth between now and the end of the decade. And technology-equipment spending, which encompasses semiconductors, instrumentation, computers and telecommunications equipment, accounts for a record 3 percent of gross domestic product today. In some cases, however, these productivity gains can result in layoffs. During the current expansion, companies have invested in technology rather than workers.