Information resources and economic productivity

This paper analyzes the role of information resources in the development of the United States economy and especially in the determination of productivity levels. The analysis is based on a formal economic model of the interrelationship between two sectors: an information sector, comprising all labor and capital used to process and handle information, and a production sector, which processes and handles material goods. The purposes of the model are to explain the past growth of the information sector workforce, to identify productivity trends in the sector, and to determine the implications of those trends for future economic performance. The analysis shows that, historically, the rate of efficiency improvement in information handling (essentially white-collar) work has been much slower than in production work. However this pattern is changing rapidly, chiefly as a result of the introduction of new data processing, communication and storage technologies. Our model shows that the expected future level of investment in these information technologies will be sufficient to reverse, by the mid 1980s, the slowdown of economic growth which is currently afflicting industrialized countries.