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The Information Economy: Definition and Measurement

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The Information Economy: Definition and Measurement DOCUMENT RESUME ED 142 2 IR 005 061 AUTHOR Porat, TITLE The Information Economy: Definitionand Measurement. INSTITUTION Office of Telecommunications (DOC) ,Washington, D.C. SPONS AGENCY National Science Foundation, Washington, D.C. REPORT WO OT-SP-77-12(1) PUB DATE May 77 GRANT APR-7609015 NOTE 319p.; For related documents, see IR005 C6I-069 ; Best copy available AVAILABLE FRCMSuperintendent of Documents, U.S. GovernmentPrinting. Office,°Washington, D.C. 20402 (Stock No. .003-000-00512-7) EDRS PRICE MF-$0.83 HC-$16.73 Plus Postage. DESCRIPTORS *Economic Research; *Employment Statistics; Employment Trends; Federal Government; Industry; Information Services; *Information Utilization;Input Output Analysis; *National Surveys;*Public Policy ABSTRACT- This report seri'es defines and measuresthe "information activity" within the national economy."Information activity" is defined to include thosespecific industries and occupations whose primary function is toproduce, process, or information. Changes in the national- , transmit eConomically valuable laborforce are analyzed over a 120-year span.This volume contains the eiecutive summary and the majorfindings of the study. It defines information and includes a formal set ofNational Income and Product Accounts for the primary and secondaryinformation sectors, with input-output matrices for both of thesesectors. In addition, it =specifies the information-related occupationsof both the primary and secondary information sectors. Finally,it presents lists of information policy issues pertaining to.industry, government, and,the. hoMe and makes two recommendations as tohow the Federal government might meet. the public policy issuesposed by the expansion of our 'information activity, (Author/DAG) ***************************************t******************************4c Documents acquired by ERIC includemany.inforMal unpublished other sources. ERIC makes every effort * * materials not available from * * to obtain the bestcomavailable. lievertheless, items of.marginal .* reproducibility are oftenencountered and this affects the quality * of the microfiche and hardcopyreproductions ERIC makes.available' * * via the ERIC Document ReproductionService (EDR$). EDRS is not * * responsible for the guality ofthe original,document. Reprodcuctiops * .* supplied by EDRS are the bestthat can be made from he original. c* :a.********************#**************.*******.*************************** U .S DE PARTMENTOF HEALTH. EDUCATION &WELFARE NATIONAL INSTITUTE OF OT SPECIAL PUBLICATION 77-12 (1) EDUCATION THIS DOCUMENT LAS BEEN RE PRO. DUL:ED EXAC Tt Y AS RECEIVED I ROM THE PERSON OR ORGANIZATION ORIGIN. ATING T POINTS OF LIEW OR OPINIONS STATED 00 NOT NECESSARILY REPRE- SENT OFFICIAL NATIONAL INSTITUTE OF EDUCATION POSITION OR .01. ICY 0 THEINFORMATIONECONOMY: Definition anl Measurement toa KNNIA,10-st Dr. Marc Uri Porat This report was prepared by the Office of Telecom- munications with Partial support of National Science Foundation grant No. APR-7609015, Asiv opinions, findings. conclusions. or recommendations ex- pressed in thts document are those of the author and do not necessarif9 reflect the views of the NationarScience Foun- dation or the Department of 'Commerce of the U.S. Govern- ment. U.S. DEPARTMENT OF'COMMERCE Juanita M. Kreps, Secretary . Jordan J. Baruch Assistant Secretary for Science and Technology OFFICE OF TELECOMMUNICATIONS John M Richardson. Director May 1977 4j. UNITE!? STATES DEPARTMENT OF COMMERCE / OFFICE OF TELECOMMUNICATIONS --STATEMENT OF MISSION The mission of the Office of Telecommunications in the Department of Commerce is to assist the Department in fostering, serving, and promoting the nation's economic development andtechnological advancement by improving man's comprehension of telecommuni- cation science and by assuring effective use and gr6wth ofthe nation's telecommunication resources. In carrying out Ibis mission, the Office ConduCts research needed in the evaluation and.development of paficy as required by the Department of Commerce Assits other government agencies in the use oftelecommuni- 'cations Conducts research, engineering, and analysis inthe general field of telecommunication science to meet government needs acquires, analyzes, synthesiLes, and disseminates information 'for the efficient use of the nation's telecommunication re- sources. Performsanalysis, engineering, and related administrative functions responsive.to the needs of the Director of the Office of Telecommunications Policy, Executive Office of thePresi- dent, in the performance of his responsibilities fordie manage- ment of the radio spectrum Conducts research needed in the evaluation anti development of telecommunication policy as required by the Office ofTele- communications Poiicy, pursuant to Executive Order 11556 Fur :We by the :-Itperintendent of Documents, U.S. Covenunent Printing Mike Washington, D.C. 20.102 0 stock Ne. 003-0)13-005I2-7 FOREWORD , Physic a disciplineat the heart of our last major , technologic i..:revolution,yieldsa quotationthat ishighly appropriate tO the present'work: / /When you can measure v t you arespeaking / about, and express itin numbers,you know something about it; but when you cannot / measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind: it may be the beginnina of knowledge, but you have scardely,, in your thoughtS, advanced to the stage of.science., -7 William Thomson, Lord Kelvin ;:(l_824-1907) English Physicist Notions ot yet another major revolution, one that Will bringabout a "post-industrial" society, ha e been in the air /or some time now. Yet, few steps toward tle measurement of this reVolution's most importantelement -- information -- were taken until Dr. Porat b:gan the investigation /that is reported intnesevolumes. We mig t say, then, that / this study, truly a seminal one, pushes o knowledge of an / information economy Oloser to "the stage Of science." This report proposes a conceptual framework ft:it- defining the information activities of an advanced economy, and prescribes an objective way to quantify them. Without such definition and meaSurement, I Cannot imagine how we can fo,-mulate sound policy for an information society. The fact that so many information policy issues are pressing upon us . adds to the pertinence of thq research. It may strike.some as odd that the Office of Telecom- munications, an organizationiconcerned principally with /telecommunicatiens technology, would offer a report dealing with the whole range of information activities. The explanation lies in the need to view;telpcommunications in the larger context of its effects on ot!her aspects of society. Satellite networ)cs, for example, can be an instrument fir regional economic development. Reta'l terminals can perform banki.og \ functions. And electronic communications is steadily diminishing the volume 9f traditional postal delivery. Thus, it is essential to appreciate how 'issues internal to telecommunications influence other kinds of information actiVities. Conversely, ways.of achieving broader policy objectives might well produce decisions affecting telecommunic tions services. T have in mind Such goals as the provision of equal access to high-quality health care or the expansion of Continuing education, both of which obviously can be facilitated by the electronic media'. To the extent that telecommunications and its sister.technologv, computers, are at the core of the infrastructure of the information society, their relationships with the larger society are every bit as important as their internal problems. Th? concepts and methods described intheSe volumes have beyjun_ to attract wide national and international notice. ,They are'cited by officials of the Congress, the Executive Branch, and the regulatory agencies: They.are beim; studied by international organizations. Yet, in spite of all .the . acknowledgments, this study constitutes only a point of departure toward a more complete understanding of the information society. We must devise and test alternative representations of the information economy against this one. We still have to settle on the best model, achieve comparability among models in other countries, produce trend data, and construct the methods for predicting consequences of alternative policy decisions. I am confident that this additional work will be taken up by others. Moreover, I believe that their efforts will sharpen these doncePts into a new tool, a tool of great value because of its clear relevance to the course of our world's complex societies. John M. Richardson Director INTRODUCTORY NOTE Science, commerce and technology are inextricably interconnected in American society.'It is therefore fitting that this effort to clarify one aspect of,their impact was a joint project of the National Science Foundation and the Department of Commerce./ The National Science:Foundation provided the funds.needed to undertake the project, the Department of Commerce the institutional setting in which to conduct it. The bond/was cemented through a common concern with telecommunications technolOgies and policies. We were particularly motivated by the prospect of increasing the substance surrounding faScinating concepts about the changing nature of American sOciety. The evident acceleration in invention and application of information technologies and the social and economic change which accompanies this developMent, is directly relevant to a wide range of policy concerns. - / The findings of 'this research are'provocative
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