software, telecommunications, content providers, and other services. All three .... It should also be noted that NACE 7250 (Maintenance and repair of office, accounting and computing ..... Electronics, Appliances, Transport equipment,. Furniture ...
Information and Communication Technology (ICT) Sector Developments in European and United States Metro Areas Bo Carlsson Case Western Reserve University and Jönköping International Business School and Thomas Paulsson Jönköping International Business School Abstract Information and communication technology (ICT) is at the core of the Digital Economy. As a general-purpose technology, ICT is used more and more pervasively. Thus, in order to understand the role of ICT in the New Economy, one needs to study both its production and use throughout all sectors. This study compares ICT developments in US and European metropolitan regions and examines the relationships between ICT sector data and broader indicators of the digital economy. The comparative analysis focuses on three questions: (1) How big is the ICTproducing sector in various regions? (2) What are the differences among regions in the composition and growth over time of the ICT-producing sector? (3) To what extent do US and European regions differ – and is Europe catching up? The study shows that the ICT sector had similar development in Europe as in the US during the 1990s. Sweden has the largest ICT sector in Europe and is comparable to the US as a whole, while other European countries have smaller ICT employment shares. However, there are large variations among regions within countries and within Europe. The ICT employment growth was generally slower in Europe than in the US, but because of slow or negative employment growth overall, the ICT employment shares increased faster in Europe than in the US. In this limited sense, some amount of catching up has taken place in Europe, at least in some regions. Still, sharp regional differences continue to exist on both sides of the Atlantic. When ICT employment shares are compared to broader indicators of the Knowledge Economy (for European metropolitan regions) and the Digital Economy (for US regions), it turns out that there is some, but not strong, correlation. Thus, the ICT sector share of total employment is only a partial indicator of the application of information and communication technology to the so-called New Economy.
2
Information and Communication Technology (ICT) Sector Developments in European and United States Metro Areas Bo Carlsson Case Western Reserve University and Jönköping International Business School and Thomas Paulsson Jönköping International Business School
Introduction In recent years there has been a lot of interest and discussion focusing on the so-called New Economy, also often referred to as the Digital Economy. Although the definitions of this new phenomenon vary, it is clear that information and communication technology (ICT) plays a central role. ICT can be viewed as a general-purpose technology used more and more pervasively throughout the economy (see e.g. Carlsson, 2003). Thus, in order to understand the role of ICT in the economy, one needs to study not only the production of ICT equipment and services but also their use throughout all sectors.
3 In the United States, several studies have been published that attempt to construct a comprehensive index of the New Economy at both the state and metropolitan levels.1 The index is based on indicators of knowledge jobs, globalization, economic dynamism, the digital economy, and innovation capacity in each region. There have also been recent attempts to examine Internet use at the state and metropolitan levels in the U.S. (see Forman, Goldfarb & Greenstein, 2002).
Comprehensive data of this sort are difficult to obtain within countries; they are even more difficult to obtain for international comparisons. A recent research project, MUTEIS (Macro-economic and Urban Trends in Europe’s Information Society), set out to assess ICT cluster development in European countries. It focused on four countries (Finland, Ireland, the Netherlands, and Sweden) that are generally considered ICTadvanced in a European comparison.2 The project studied one central and one ‘peripheral’ metropolitan region in each country. The study was based on data on ICTproducing industries (both manufacturing and service industries).
The purpose of the present paper is to broaden the study of ICT developments to include United States as well as European regions by (1) comparing some of the results of the MUTEIS study for European regions to similar data for the United States, and (2) examining the relationships between ICT sector data and broader indicators of the digital economy.
1
See for example http://www.neweconomyindex.org/metro/ (April 2001) and http://www.neweconomyindex.org/states/2002 (June 2002). 2 With the exception of Ireland, all are above the EU-15 average with respect to Internet use per 100 inhabitants and computer professionals as a share of total employment (Paulsson 2003).
4
The paper is organized as follows. We begin with a discussion of various definitions of the ICT sector. This is important, as different definitions lead to different results as regards the importance of the ICT sector in each region, especially in interregional comparisons. We then proceed with a comparison of ICT employment in relation to total civilian employment in U.S. and European regions using the MUTEIS definition. The comparative analysis is focused on three questions: (1) How big is the ICT-producing sector in various regions? (2) What are the differences among regions in the composition and growth over time of the ICT-producing sector? (3) To what extent do U.S. and European regions differ – and is Europe catching up?
This analysis is followed by a more in-depth comparison of U.S. and Swedish regions based on a broader definition of the ICT-producing sector. Here the emphasis is on the composition of the ICT-producing sector and its growth over the period 1990-2000. We also discuss the relationship between the ICT sector and the broader economy based on detailed data for the Northeast Ohio (Cleveland) metropolitan region. The final section presents a summary of the results and some concluding remarks.
The task of comparing U.S. and European data is severely complicated by the fact that different industrial classification systems are used and that these classification systems have changed over time. The European country data used here are based on the NACE classification, which is identical to the national classification systems used in each country, at least at the level of detail used in this study. In the United States, a different
5 classification, the Standard Industrial Classification (SIC), was used up to and including 1997. For subsequent years, the North American Industrial Classification System (NAICS) is used. Although there is a concordance between SIC and NAICS, the classification systems are based on different principles, and the official statistics do not report backward and forward data under each system. Thus, not only are there difficulties comparing U.S. and European data; it is also difficult to obtain U.S. data that are consistent over the 1990s. In order to overcome these problems, we have been forced to devise our own concordance between U.S. and European (particularly Swedish) data. This is reported in appendix 1.
Definition of the ICT Sector The definition of the information and communication technology (ICT) sector varies depending on the purpose of the inquiry. Three definitions are compared in this study. They are the U.S. Department of Commerce (USDC) definition, the definition used in the MUTEIS (Macro-economic and Urban Trends in Europe’s Information Society) study, and a broader definition designed at the Jönköping International Business School (JIBS) for the purposes of this study.
In Table 1, the employment in the ICT sector in the United States and Sweden in 2000 is shown, according to the three definitions. The size of the ICT sector as a percentage of total civilian employment varies from 6.4 % in the U.S. and 5.6 % in Sweden (using the USDC definition) to 9.0 % and 10.2 %, respectively (using the JIBS definition). The corresponding figure for the MUTEIS definition is 8.1 % for the U.S. and 8.9 % for
6 Sweden. Thus, the USDC definition is the narrowest and the JIBS definition the broadest. According to the narrowest definition, the ICT sector was slightly larger in the United States than in Sweden in 2000, while the opposite is the case if the broader definitions are used.
The ICT sector is commonly defined to consist of several sub-sectors: hardware, software, telecommunications, content providers, and other services. All three definitions used here are identical in the treatment of the hardware, software, and telecommunications sectors. The differences occur in the treatment of the “Content” and “Other services” sectors. The MUTEIS and JIBS definitions include ICT content (in the form of publishing, advertising, motion picture-related activities, and business services). By contrast, all content-producing sectors are omitted in the Commerce Department definition. In the “Other services” category, all three definitions include wholesale of ICT equipment as well as retail stores, rental and leasing establishments, and computer maintenance and repair services. The differences are that both the MUTEIS and JIBS definitions include management consulting services, while the USDC definition does not. In addition, the JIBS definition also includes engineering, architectural, surveying, and construction management services.
Overall, the U.S. Commerce Department definition is the one most narrowly focused on the manufacture and wholesale of ICT equipment. The MUTEIS definition is a hybrid in that it includes production of IT content (i.e., the application of ICT in particular sectors, especially in publishing and the production and distribution of motion pictures) as well as
7 management consulting services. The JIBS definition is the most comprehensive of the three. It includes all the categories in the other two definitions, plus engineering, architectural, surveying, and construction management services. None of the definitions includes the widespread use of ICT throughout the broader economy.
Comparison of U.S. and European Data for the ICT Sector (MUTEIS Definition) Because of limited availability of data, this section of the paper uses only the MUTEIS definition. Figure 1 shows the share of ICT employment as a percentage of total civilian employment in the United States and European countries in 2000. As already indicated, Sweden has a larger ICT share of total employment (8.9 %) than the United States and the other European countries. The ICT employment shares in Ireland, Finland, and the Netherlands in 2000 were 5.8 %, 5.7 %, and 4.5 %, respectively.3 The figure also shows that the variation among the states in the U.S. is just as great as among countries in Europe. For example, Massachusetts and California both had over 11 % of their labor force in ICT sectors in 2000, compared with 6.2 % in Ohio.4
Figure 2 presents similar data for metropolitan regions. The European regions are those selected in the MUTEIS project, whereas the U.S. regions are chosen to represent both highly ICT-intensive and more traditional regions. San Francisco and Austin turn out to have the largest ICT sectors with an ICT share of total employment of 17.4 and 16.5 %, respectively. Stockholm (at 16.2 %) is close behind. Oulu, a peripheral region in northern 3
According to the MUTEIS report (p. 15), the ICT share of business sector employment in 1999 (not total employment in 2000) was higher in the Netherlands, Sweden, and Finland than in the United States. This is presumably due to different definitions used. 4 According to the 2002 State New Economy Index, Massachusetts ranked 1st, California 3rd, and Ohio 30th among the 50 U.S. states in the overall new economy index for 2002.
8 Finland, turns out to have nearly 15 % of its labor force in ICT sectors, more than in Boston, Denver, and Atlanta. Amsterdam and Helsinki have somewhat smaller ICT employment shares (11 and 10 %, respectively). Old industrial cities in the U.S. with a large share of heavy manufacturing industry (Pittsburgh, Detroit, and Cleveland) have ICT employment shares in the 6-7 % range, similar to Jönköping, Dublin, and Groningen. Thus, at least if we use the MUTEIS definition, European and U.S. metropolitan regions are comparable in the share of ICT employment.
Figure 35 shows the distribution of ICT employment by sub-sector in the cities for which data are available.6 The large share of ICT employment in Oulu (noted in Figure 2) is due to an unusually large hardware sector, almost twice the relative size of that in any of the other metro areas. On the other hand, the software sector in Oulu is quite small. By contrast, San Francisco has the largest software sector among the cities listed, followed by Boston, Stockholm, and Helsinki. The telecom sector is largest in Cleveland and Amsterdam. The content sector is largest in Stockholm and is larger in all the European metro areas than in the U.S. ones.
5
The data in the MUTEIS report do not include the “Other services” sector, which is therefore omitted from Figure 3. 6 The “Research” category (NACE rev. 73101, 73102, 63201) is not included in this study. It does not appear to be included in the tables and figures in the MUTEIS report either, although it included in the definition in Appendix 10. Another reason for excluding the Research sector here is that the Swedish data are inconsistent over the time period studied, and the U.S. data are not comparable. It should also be noted that NACE 7250 (Maintenance and repair of office, accounting and computing machinery) has been moved from the “Hardware” to “Other services” sector in the Swedish and U.S. data reported here.
9 The Development of ICT Sector Development in European and U.S. regions 19902000 ICT employment in the United States increased from between 4 and 7 million in 1990 to between 7 and 10 million in 2000, depending on which definition is used. The ICT share of total civilian employment rose from 4-7 % to 6-9 %. As is true for most economic activity, the regional distribution of the ICT sector varies considerably: the ICT sector constituted between 6 and 10 % of total employment in California and Massachusetts in 1990 but only between 4 and 6 % in Ohio. The numbers increased throughout, reaching 9-13 % in California and Massachusetts and 5-7 % in Ohio in 2000.
The development was similar in Sweden. The total civilian labor force in 1990 in Sweden was comparable in size to that of Ohio (about 4.2 million) but then declined to about 3.8 million while that of Ohio increased to over 5 million. The ICT sector was also similar in size in the two regions in 1990 but grew faster in Sweden (in spite of falling total employment). Thus, the ICT share of total employment rose to 6-10 % in Sweden in 2000 compared to only 5-7 % in Ohio. As a result, Sweden’s ICT sector share of employment in 2000 was about the same as that in the United States, smaller than those in Massachusetts and California but larger than that in Ohio.
At the metropolitan level, the variation is greater, as would be expected. The ICT sector share has grown in all the locations studied, and regardless of which definition is used. San Francisco is the most ICT-intensive, followed by Stockholm and Boston. See Figure 4 for details.
10
Figure 5 shows the growth rates of ICT employment over the period 1990-2000 in all the regions for which comparable data are available (MUTEIS definition). Oulu turns out to have had the highest growth rate, followed by San Francisco and Helsinki. It is interesting to note that the ICT employment growth rate for the United States as a whole was higher than for California, Ohio, and Massachusetts. Thus, rapid growth must have taken place in other regions (especially areas with low ICT employment initially) within the United States. It is also noteworthy that the growth rate in Finland as a whole was much lower than in Helsinki and Oulu, the most ICT-intensive regions. The employment growth rates were the lowest in Sweden, but higher in Stockholm than in the country as a whole. However, given that total employment in Sweden actually declined in the 1990s, the ICT share of total employment actually increased faster in Sweden than in the United States.
The overall conclusion of this analysis is that except for Sweden, the ICT sector is smaller (at the national level) in the European countries studied than in the United States. But the ICT sector varies considerably in size and composition among regions, even within the same country. Some European metropolitan regions (especially Stockholm) have ICT sectors comparable in relative size to the leading U.S. regions. And the growth rates of ICT employment over the 1990s seem to have been higher in Europe than in the United States. Thus, there appears to be some catching up going on, at least in some European regions.
11 Detailed Comparison of ICT Sector Composition in U.S. and Swedish Metropolitan Regions In this section we take a closer look at the composition of the ICT sector in two U.S. and two Swedish metropolitan regions in order to better understand the differences in the development in the two countries. The two U.S. cities are San Francisco and Cleveland. The former is generally considered among the leading U.S. cities in the digital economy, while Cleveland represents a region characterized by a large share of traditional (mostly heavy) manufacturing industry. On the Swedish side, Stockholm is widely considered the leading city in Europe in ICT, while Jönköping, from a Swedish perspective, is a medium-size city with a long tradition of manufacturing industry. The JIBS definition of the ICT sector is used for this comparison, since it provides the broadest and most detailed view.
Figure 6 gives an overview of the distribution by sub-sector ICT sector employment in 2000 in each city. A broadly similar pattern exists in all the regions: the ‘other services’ category is generally the largest and the ‘content’ and telecommunications sub-sectors the smallest in terms of employment. San Francisco has a much larger ‘hardware’ sector than the other cities and also has the largest software sector, although Stockholm is not far behind. Stockholm has the largest ‘content’ sector, while Cleveland and Jönköping have the largest ‘other services’ sectors.
Table 2 provides a more detailed view. Stockholm has the largest employment in all the ‘content’ sub-categories except publishing (where it falls slightly behind Cleveland). San
12 Francisco is clearly the leader in computers and electronic equipment, while both Jönköping and Cleveland have a larger employment share in instruments for measurement and control. Stockholm and Jönköping have the largest shares in computer programming but have much lower shares in computer processing and other computerrelated services than the U.S. cities. This may reflect differences between the U.S. and Sweden in the classification of computer-related activities rather than substantive differences. The differences are not large in the telecommunications and ‘other services’ sectors (although San Francisco has smaller shares due to its larger shares in the hardware and software sectors).
The overall impression is that San Francisco has a very strong position in computer hardware and software, that the large ‘content’ sector in Stockholm probably reflects its status as the national capital city, and that the more traditional manufacturing-oriented cities (Cleveland and Jönköping) have a relatively large share of their ICT employment in manufacturing-related sectors such as instrumentation, and also in telephone and telegraph communications as well as wholesale of computers and equipment.
Do ICT Sector Data Reflect the Digital Economy? While the size and composition of the ICT sector in various regions are of interest, such data provide only limited information about the deeper role of information and communication technology in the economy. Given the pervasiveness of ICT throughout the economy – i.e., the digital economy – it is important to know not only where and how ICT goods and services are produced but also where and how they are used.
13 Unfortunately, not much information is available to address this issue. But thanks to recent efforts by Phil Cooke and colleagues, a Knowledge Economy Index has been constructed for European regions. See Cooke & De Laurentis (2002) and Cooke & Schwarz (2003). The index is based on the share of employment in knowledge-based industry (as defined by the OECD): high technology manufacturing and knowledgeintensive services. See Table 3.
Table 3 lists the 20 European metropolitan regions with the highest scores according to the Knowledge Economy Index, and the 20 lowest-scoring regions. Stockholm and Inner London have the highest scores, nearly 70 % higher than the European Union average. The 20 highest-scoring regions include 7 Swedish and 7 U.K. regions, 2 Belgian, and 1 each in Finland, France, Germany, and Italy. Thus, this table confirms the leading position of Sweden (and especially Stockholm) in our earlier analysis of European ICT sector data. (By contrast, all the lowest-scoring regions are in Greece, Portugal, and Spain.)
How close is the correlation between the Knowledge Economy Index (KEI) and the ICT employment share in these regions? Figure 7 provides a comparison of the KEI (divided by 10 so that the numbers can be accommodated on the same scale) and the share of ICT employment in total employment in the European regions for which data are available. It turns out that there is some, but not very strong, correlation. The simple correlation coefficient is 0.63. Stockholm has the highest numbers for both indicators, but Oulu, with the second highest ICT employment share, has the second lowest KEI score. Jönköping
14 has virtually the same KEI score as Amsterdam, even though it has a considerably smaller ICT sector. Thus, it is possible for a region to have a large ICT sector while it has a low Knowledge Economy Index score. The opposite may also be true.
A similar analysis can be made for United States regions, using the so-called New Economy Index available for both metropolitan areas and states.7 The scores for the 50 largest U.S. metropolitan areas are shown in Table 4. San Francisco has the highest score, followed by Austin and Seattle. In Figure 8 the Overall New Economy Index scores are shown together with the share of ICT employment for each region in our previous analysis. Again the correlations are not strong (the simple correlation coefficient is 0.67).
A recent paper analyzes Internet use in U.S. regions (Forman, Goldfarb, and Greenstein, 2002). The focus is on commercial internet use, i.e., no government, military, or nonprofit establishments are included. A database containing nearly 87,000 observations on commercial establishments with more than 100 employees for the period June 1998December 2000 was used. The study distinguishes between two types of internet use: “participation” and “enhancement.” Participation refers to the use of the Internet for basic
7
The data are available in http://www.neweconomyindex.org/metro/ and http://www.neweconomyindex.org/states/2002. The index is based on a weighted average of several indicators: knowledge jobs (the share of managerial, professional, and technical jobs; the level of workforce education), globalization (as reflected in the export orientation of manufacturing industries), economic dynamism (the number of jobs in fast-growing companies and the rate of job “churning”), several indicators of the digital economy (online population, broadband telecommunications capacity, computer use in schools, the number of commercial internet domain names, and the capacity of the Internet backbone), as well as innovation capacity (as indicated by the number of high tech jobs, the number of degrees granted in science and engineering, the number of patents, academic research and development funding, and the availability of venture capital.
15 communications (e-mail, browsing on the World Wide Web, passive document sharing, and advertising on the World Wide Web), while “enhancement” refers to use of Internet technology that enhances business processes (e-business): Internet-based enterprise resource planning (ERP), and TCP/IP –based applications such as customer service, education, extranet, publications, purchasing, and technical support. The study estimated a participation rate for the United States as a while of 88.6 %, i.e., close to saturation level, while the enhancement rate is much lower and more varying across regions.8 Establishments in large metropolitan areas (with population > 1 million) were found to have adoption rates of 14.7 %, In medium MSAs (with population between 250,000 and 1 million), the average was 11.2 %, while in smaller metro areas (< 250,000 population) the adoption rate was 9.9 %.9
The Internet use rates and New Economy Index for selected U.S. cities are shown in Table 5. The same data are also represented in Figure 9, where the metropolitan areas are listed in descending order of the enhancement rate. It turns out that the enhancement rate varies much less across regions than the other indicators. The primary reason for this becomes apparent upon examination of Table 6. The table shows that the highest enhancement rates (e-business use of the Internet) occur in industries that are closely linked to “old” manufacturing industries and that involve network-based communications activities (management of companies; media, telecommunications and data processing; 8
While no directly comparable European data are available, Eurostat data for the first half of 2001 show that the percentage of firms with web access for all firms in the EU was 75 % (91 % in Finland, 90 % in Sweden, 85 % in Ireland, and 79 % in the Netherlands). The corresponding figures for large firms were 99 % in Sweden, 97 % in Finland, and 90 % in the EU as a whole (Paulsson 2003). Thus,, the European figures appear to be roughly comparable to the U.S. data. 9 For comparison, Paulsson (2003) reports that 19 % of all EU firms were using EDI (electronic data interchange) at the end of 2000. The figure for the Netherlands was 52 %, for Ireland 45 %, for Finland 16 %, and for Sweden 15 %.
16 utilities; finance and insurance; and professional, scientific and technical services), while more “high tech” industries such as health care, arts and entertainment, and educational services have low enhancement rates.
Yet another indication of the need for caution in interpreting information about employment in the ICT sector is provided in a recent study conducted in Northeast Ohio (Greater Cleveland Growth Association and Northeast Ohio Software Association, 2002). The study uses the U.S. Department of Commerce definition of the information technology sector. It is based on information obtained from a sample of YY local companies in the Cleveland metropolitan area, distributed in a wide variety of types of activities. See Figures 10 and 11. Most of the firms classified as information technology (IT) firms were in IT consulting, system design and integration, and custom software development, whereas nearly half of the non-IT firms were in manufacturing. The study shows that more than 60 % of the IT professionals in the Cleveland area were in non-IT companies, i.e., less than 40 % were employed in companies classified as IT-based. See Table 7. As shown in Figure 12, more than one-third of the IT professionals are programmers. Network specialists, information systems personnel, and technical support representatives each represent 10 % or more of IT workers. It is not surprising that most of these are employed in non-IT firms.
Thus, there is considerable evidence that while the sector that produces ICT goods and services also provides a growing number of (well-paying) jobs, the share of employment in the ICT sectors is only a partial indicator of the use of information and communication
17 technology more broadly in the economy. As the use of ICT becomes more and more pervasive in all types of activity, there is an increasing need to understand how ICT is used throughout the economy, and how it transforms the whole society.
Conclusions This study has shown that the information and technology (ICT) sector has had a similar development in Europe to that in the United States in the 1990s. Sweden has the largest ICT sector in Europe (measured as a share of total employment) and is comparable to the United States as a whole (but smaller than those in Massachusetts and California), while other European countries have smaller ICT employment shares. There are large variations among regions both within countries and within Europe. Stockholm has the largest ICT employment share among European metropolitan regions, comparable to San Francisco and Austin. Jönköping, Dublin, and Groningen have ICT employment shares comparable to those in old industrial cities in the U.S. such as Pittsburgh, Detroit, and Cleveland. The ICT employment growth was slower in Europe than in the United States in the 1990s (with the exception of some European regions such as Oulu and Helsinki), but because of slow or negative employment growth overall, the ICT employment shares increased faster at the national level in Europe than in the United States. Thus, in this sense some catching up has taken place in Europe, at least in some regions. But sharp regional differences continue to exist on both sides of the Atlantic
When the ICT employment shares are compared to broader indicators of the Knowledge Economy (for European metropolitan regions) and the Digital Economy (for U.S.
18 regions), it turns out that there is some, but not strong, correlation. Thus, the ICT sector share of total employment is only a partial indicator of the application of information and communication technology to the so-called New Economy. A more detailed study of the Cleveland metropolitan area shows that two-thirds of information technology-related jobs are in non-IT sectors. This is probably not unique to Cleveland. Instead, taking into account the fact that computers and Internet access are nearly ubiquitous in both Europe and the United States, interesting questions for further research are what determines the extent and nature of the use of ICT (including the Internet) in various activities, how the use of ICT varies across industries and regions, and to what extent it can be influenced through public policy.
19 References Atkinson, R.D. & P. D. Gottlieb, 2001. The Metropolitan New Economy Index, Progressive Policy Institute and Weatherhead School of Management, April. Carlsson, Bo, 2003. “The Digital Economy: What Is New and What Is Not?” Case Western Reserve University, Weatherhead School of Management, working paper, August. Cooke, Philip, and Dafna Schwartz, 2003. “Regional Knowledge Economy Variations: An Israel-EU Comparison, from Statics to Dynamics.” Working paper, Cardiff University and Ben Gurion University, July. Cooke, Philip, and Carla De Laurentis, 2002. “The Index of Knowledge Economies in the European Union: Performance Rankings of Cities and Regions.” Working paper, Cardiff University, October. Forman, C., A. Goldfarb, and S. Greenstein, 2002. “Digital Dispersion: An Industrial and Geographic Census of Commercial Internet Use.” National Bureau of Economic Research Working Paper 9287, October. Greater Cleveland Growth Association and Northeast Ohio Software Association, 2002. “Northeast Ohio Information Technology Workforce Assessment”. Working paper, spring. http://www.neweconomyindex.org/metro/ http://www.neweconomyindex.org/states/2002/ Paulsson, Thomas, 2003. “Firm Access and Use of ICT in the FINS,” Muteis working paper, Jönköping International Business School, spring 2003.
20 van der Meer, A, W. van Winden, & P. Woets (eds.), 2003. ICT Clusters in European Cities during the 1990s: Development Patterns and Policy Lessons. The Cases of Amsterdam, Cork, Dublin, Groningen, Helsinki, Jönköping, Oulu, and Stockholm. Rotterdam: Euricur (MUTEIS Report).
Table 1. ICT Employment as a share of total employment in Sweden and the United States in 2000 according to various definitions
Department of Commerce
MUTEIS
JIBS
Sweden
5.6
8.8
10.2
United States
6.4
8.1
9.0
Source:
Table 2 Comparison of ICT sector composition (JIBS def.) in Cleveland, San Francisco, Stockholm and Jönköping, 2000 Industry Groups Publishing Advertising Motion pictures & related services Content subtotal Computers & equipment Electronic components and equipment Instruments for measurement & control Hardware subtotal Computer programming, etc. Prepackaged software
Cleveland 6.7 3.8 1.9 12.4 0.4 3.9 10.2 14.5 4.9 1.4
San Francisco 3.9 3.1 1.7 8.7 4.5 15.0 9.6 29.0 8.0 9.3
Stockholm 6.6 7.2 5.3 19.1 0.4 11.6 1.7 13.8 19.5 4.4
Jönköping 3.6 6.0 2.4 12.0 0.1 6.4 12.8 19.2 14.4 1.9
Computer processing & information retrieval services Computer related services NEC Software subtotal Telephone and telegraph communications Radio and television broadcasting Cable and other pay television services Telecom subtotal
5.0 4.2 15.5 8.8 3.1 1.5 13.4
5.3 8.1 30.7 5.5 0.9 1.0 7.4
2.1 0.4 26.4 6.5 0.3 0.2 6.9
2.8 0.0 19.2 10.7 0.0 0.0 10.7
Wholesale of computers & electronic equipment Computer rental & leasing; equipment rental & leasing NEC Computer & electronic stores Consulting services Other services subtotal Total
19.3
9.0
9.9
13.4
0.1 7.2 17.6 44.1 100.0
0.2 3.6 11.6 24.2 100.0
0.2 1.2 22.8 33.9 100.0
0.0 1.2 24.2 38.9 100.0
Table 3. Knowledge Economy Index, European Union, 1998 High-scoring regions Stockholm (S) London (Inner) (UK) West Sweden (S) Surrey & Sussex (UK) Brabant Wallonie (BE) London (Outer) (UK) Piemonte (I) East Middle Sweden (S) Berkshire-Oxford (UK) Bedford-Hertford (UK) Uusima (Helsinki) (Fi) Upper North Sweden (S) South Sweden (S) Mid-North Sweden (S) Brussels (BE) Paris (F) N. Middle Sweden (S) Hampshire (UK) Stuttgart (G) West Midlands (UK) EU
Index 169.5 166.8 155.2 153.6 152.4 151.6 150.7 150.0 149.0 148.9 148.8 148.4 148.1 147.6 145.0 144.9 143.3 141.6 141.1 140.1 100.0
Low-scoring regions Notio Aigaio (Gr) Sterea Ellada (Gr) Peloponnissos (Gr) Anat-Maked-Thraki (Gr) Norte (P) Dytiki Ellada (Gr) Kriti (Gr) Centro (P) Dytiki Makedonia Alentejo (P) Ionia Nissia (GR) Algarve (P) Thessalia (Gr) Ipeiros (Gr) Castilla la Mancha (ES) Voreio Aigaio (Gr) Kentriki Makedonia (GR) Murcia (ES) Estremadura (ES) Balearics (ES)
Source: Cooke & De Laurentis (2003).
Index 36.7 38.4 43.9 46.4 50.2 50.9 50.9 51.1 51.6 53.8 53.9 54.7 55.2 59.6 60.6 62.3 62.7 64.1 64.9 65.3
Table 4. Overall New Economy Scores, Top 50 U.S. Metro Areas, 2001
Table 5. Internet Use and New Economy Index in the 50 Largest U.S. Metro Areas, 2001 Ran k
City
Participatio n rate
Enhanceme nt rate
1 2 3 4 5 6 7 8 9 10
San Francisco--Oakland--San Jose, CA Denver-- Boulder--Greeley, CO Cleveland--Akron, OH Seattle-- Tacoma--Bremerton, W A Salt Lake City--Ogden, UT San Antonio, TX Providence--Fall River-Warwick, RI--MA Grand Rapids--Muskegon-HolIand, MI Minneapolis--St. Paul, MN--WI Los Angeles--Riverside-Orange County, CA
96.4% 95.9% 94.8% 93.9% 93.5% 93.3% 93.0% 93.0% 92.7% 92.5%
17.0% 18.3% 14.7% 14.5% 16.7% 15.3% 14.9% 12.0% 15.9% 13.5%
Overall New Economy Index 95.6 58.1 29.5 68.0 49.8 15.0 N.A. 13.6 49.0 37.4
14 21 24 27 39
Austin--San Marcos, TX Detroit--Ann Arbor--Flint, MI Atlanta, GA Boston--Worcester--Lawrence, MA--NH--ME-Pittsburgh, P A
92.1% 91.4% 90.9% 90.6% 89.1%
14.7% 13.8% 15.4% 13.9% 13.6%
77.9 31.8 48.6 54.0 27.1
Table 6. Enhancement by Industry
2-digit NAICS industries
Percentage of Establishments Using the Internet for Business Processes
Management of companies & enterprises Media, Telecommunications & Data Processing Utilities Finance & Insurance Professional, Scientific & Technical Services Wholesale Trade
27.9 26.8 21.1 19.9 19.6 17.2
Manufacturing 3: Metals, Machinery, Computers & Electronics, Appliances, Transport equipment, Furniture & Other manufacturing Real estate, Rental & Leasing Transportation & Warehousing 2: Couriers & Warehousing
15.7 15.6
Manufacturing 2: Wood, Paper, Printing, Petroleum, Chemicals, Plastics & Rubber, Non-metallic minerals Mining Transportation & Warehousing 1: Transportation Manufacturing 1: Food & Textiles Accommodation & Food services Agriculture, Forestry, Fishing & Hunting Other services (except Public Administration) Administrative, Support, Waste management & Remediation services Health care & Social assistance Retail trade 1: Durables Arts, Entertainment & Recreation Construction Retail Trade 2: Nondurables Educational services Source: Forman, Goldfarb & Greenstein (2002).
15.5
14.4 12.4 12.0 11.5 11.2 11.1 10.7 10.6 9.8 9.7 9.6 9.4 7.0 6.2
Table 7.
Figure 1. ICT Employment as % of Total Employment, 2000 Massachusetts California Sweden United States Ohio Ireland Finland MUTEIS def. Netherlands 0
2
4
6
8
10
12
14
Figure 2. ICT Employment as % of Total Employment, 2000 SanFrancisco Austin Stockholm Oulu Boston Denver Atlanta Amsterdam Helsinki Seattle Jönköping Pittsburgh
MUTEIS def.
Detroit Dublin Cleveland Groningen
0
2
4
6
8
10
12
14
16
18
Figure 3. Distribution of ICT Employment by Sub-sector, 2000 (MUTEIS definition excluding "Other Services")
San Francisco Stockholm Oulu Hardware Software Telecom Content
Boston Amsterdam Helsinki Jönköping Cleveland 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Figure 4. ICT Sector as Percentage of Total Civilian Employment 1990 and 2000 various definitions
20 18 16 14
Dept of Commerce 1990 Dept of Commerce 2000 MUTEIS 1990 MUTEIS 2000 JIBS 1990 JIBS 2000
12 10 8 6 4 2 0 United States Massachusetts
Sweden
Boston
Stockholm
Figure 5. ICT Employment Growth, 1990-2000 MUTEIS definition
Oulu San Francisco Helsinki U.S. California Ohio Massachusetts Cleveland Boston Finland Stockholm Growth rate, %
Sweden Jönköping 0
1
2
3
4
5
6
7
8
9
Figure 6 Distribution of ICT Sector Employment by Sub-Sector, %, 2000 San Francisco, Cleveland, Stockholm and Jönköping (JIBS definition)
50 45 40 35
San Francisco Cleveland Stockholm Jönköping
30 25 20 15 10 5 0 Content
Hardware
Software
Telecom
Other services
Figure 7. Knowledge Economy Index (1998) and ICT Employment Share (2000) Stockholm
Helsinki
Amsterdam
Jönköping Knowledge Economy Index % ICT employment
Groningen
Oulu
Dublin 0
5
10
15
20
Figure 8. ICT Employment Share and New Economy Index, U.S. Metro Areas, 2001 18 16
% ICT employment Overall New Economy Index/10
14 12 10 8 6 4 2 0 Austin
Boston
California
Detroit
Cleveland
Figure 9. ICT Employment, New Economy Index and Internet Use in U. S. Regions, 2000 20 % ICT employment Overall New Economy Index/10 Enhancement rate, %
18 16 14 12 10 8 6 4 2
o hi O
at es d
St
rg h te
tts bu
U ni
rn ia ifo al
C
Pi
ro it D et
tin
to n Bo s
ve l le C
Au s
an
d
ta la n At
Se at tle as sa ch us et ts M
Sa
n
Fr a
D
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ve
is co
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0
Figure 10.
Figure 11.
Figure 12.
Appendix 1 Concordance between the Swedish Industrial Classification (SNI92) and the U.S. Standard Industrial Classification (SIC) SN SIC I92 22 Bokutgivning Book publishing 2731 273 11 0 22 Dagstidningsutgivning Newspaper publishing 2711 271 12 1 22 Annonstidningsutgivning Incl. in 2741 * 12 2 22 Utgivning av tidskrifter Periodicals publishing 2721 272 13 0 22 Fonogramutgivning Incl. in 2741 * 14 0 22 Annan förlagsverksamhet Misc. publishing 2741 274 15 0 30 Tillverkning av kontorsmaskiner Calculating & accounting 3578 3578 01 och datorer machines exc. Computers 0 30 Tillverkning av datorer och Computers & equipment 3571+35 357 exc 02 annan 72+3575 3578 0 informationsbehandlingsutrustni +3577 ng 31 Tillverkning av elektrisk tråd och Current-carrying wiring 3643 3643 30 kabel devices 0 32 Tillverkning av elektroniska Electronic components 367 367 10 komponenter 0 32 Tillverkning av radio- och TVRadio & television 3663+ 366 20 sändare samt apparater för broadcasting and 3661 0 trådtelefoni och trådtelegrafi communications equipment; (=366) telephone and telegraph apparatus 32 Tillverkning av radio- och TVHousehold audio and video 3651 + 365 30 mottagare samt apparater för equipmt; prerecorded records 3652 (= 0 upptagning och återgivning av & tapes 365) ljud och videosignaler 33 Tillverkning av instrument och Instruments for measurement 382 382 exc 20 apparater för mätning, kontroll, & control exc.3823 3823 0 provning, navigering och andra ändamål utom industriell processtyrning 33 Tillverkning av instrument för Industr. Instruments for 3823 3823 30 styrning av industriella measurement, display & 0 processer control
51 43 1
Partihandel med hushållsmaskiner och apparater
Office equipment wholesale
5044*
51 43 2 51 43 3 51 43 4
Partihandel med radio- och TVapparater
Electrical appliances, TV & radio sets wholesale
5064
Partihandel med fonogram och videokassetter
Wholesale of durable goods NEC
5099*
…….
Partihandel med elartiklar
Wholesale of electrical apparatus & equipment
5063*
51 65 1 51 65 2 51 65 3 51 65 9 52 49 3 52 49 4 64 20 1 64 20 2 64 20 3 71 33 0
Partihandel med mät- och precisionsinstrument
Wholesale of commercial equipment NEC
5046*
Part of 5067: NIACS 42161/(42 161+4441 9) 5046
Partihandel med datoriserad materialhanteringsutrustning
Wholesale of Industrial machinery & equipment
5084*
5084
Partihandel med teleprodukter och elektronikkomponenter
Wholesale of electronic parts & equipment
5065*
5065
Partihandel med övriga maskiner för industri, handel och sjöfart Butikshandel med datorer, kontorsmaskiner och programvara Butikshandel med kommunikationsutrustning
Wholesale of Industrial machinery & equipment
5084*
…..
Computer and computer software stores
5734
5734
Radio, television and consumer electronics stores
5731
5731
Nätdrift
Telephone and telegraph communications
Radiering
Radio and television broadcasting
483
483
Kabel-TV-drift
Cable and other pay television services
4841
484
Uthyrning av kontorsmaskiner och kontorsutrustning inkl. Datorer
Computer rental & leasing; equipment rental & leasing NEC
481+482 2
7377+73 59*
Part of 5044: NAICS 42142/(42 142+4532 1) 5064
481+4822
7377+Part of 7359: NAICS 53242/(53 221+5323 1+532299 +532412+ 532411+5 62991+53 242+5324
9)
72 10 0 72 20 1 72 20 2 72 30 0 72 40 0 72 50 0 72 60 0 73 10 1 73 10 2 73 20 1 74 14 0 74 20 2 74 40 1 74 40 2 74 40 9 92 11 0 92
Konsultverksamhet avseende maskinvara Datakonsultverksamhet
Computer integrated systems design; computer facilities management services Computer programming services
7373+73 76
7373+737 6
7371
7371
Programvaruproduktion
Prepackaged software
7372
7372
Databehandling
Computer processing and data preparation and processing services Information retrieval services
7374
7374
7375
7375
Underhåll och reparation av kontors- och bokföringsmaskiner samt databehandlingsutrustning Övrig datoranknuten verksamhet
Computer maintenance and repair
7378
7378
Computer related services NEC
7379
7379
Naturvetenskaplig och teknisk forskning och utveckling
Noncommercial research organizations (part of)
8733*
873
Teknisk forskning och utveckling
Noncommercial research organizations (part of)
8733*
…..
Samhällsvetenskaplig forskning och utveckling
Noncommercial research organizations (part of)
8733*
…..
Konsultverksamhet avseende företagens organisation, information, m.m. Bygg- och annan teknisk konsultverksamhet
Management consulting services (exc. Construction management services Engineering, architectural and surveying services; construction management services Advertising agencies, public relations services
Databasverksamhet
Reklambyråverksamhet
8742
8742
871
871
7311+87 43
7311+874 3
Annonsförmedling
Advertising NEC
7319
7319
Övrig marknadsföringsverksamhet
Management consulting services (part of)
7313
7313
Film- och videoproduktion
Motion picture and video tape production
7812
7812
Film- och videodistribution
Motion picture and video tape
7822
7822
12 0 92 13 0 92 20 0 92 40 0
distribution Filmvisning
Motion picture theaters
Radio- och TVprogramverksamhet
Business services (part of)
Nyhetsservice
News syndicates * = part of
7832 7389*
7383
7832 (NAICS 51224+51 229)/SIC7 389 7383
North American Category Description Book publishing Newspaper publishing Incl. in 2741 Periodicals publishing Incl. in 2741 Misc. publishing
SIC 2731 2711 * 2721 * 2741
Code Translation 273 271
NAICS translation of "Code Translation" 51113 51111
272
51112
274
51114, 51223, 511199 333311, 333313
Calculating & accounting machines exc. Computers
3578
3578
Computers & equipment
3571+3572+35 75+3577
357 exc 3578
334111, 334112, 334113, 334613, 334119
Current-carrying wiring devices
3643
3643
335931
Electronic components
367
367
334411, 334412, 334413, 334414, 334415, 334416, 334417, 334422, 334418, 334419
Radio & television broadcasting and communications equipment; telephone and telegraph apparatus
3663+ 3661 (=366)
366
33421, 33422
Household audio and video equipmt; prerecorded records & tapes
3651 + 3652 (= 365)
365
33431, 334612, 51222
Instruments for measurement & control
382 exc.3823
382 exc 3823
339111, 334512, 334514, 334515, 334516, 333314, 339112, 334518, 334519
Industr. Instruments for measurement, display & control
3823
3823
334513
Office equipment wholesale
5044*
Part of 5044: NAICS 42142/(42142+453 21)
42142
Electrical appliances, TV & radio sets wholesale
5064
5064
42162
Wholesale of durable goods NEC Wholesale of electrical apparatus & equipment
5099*
…….
42199
5063*
Part of 5067: NIACS 42161/(42161+444 19)
42161
Wholesale of commercial equipment NEC
5046*
5046
42144
Wholesale of Industrial machinery & equipment
5084*
5084
42183
Wholesale of electronic parts & equipment Computer and computer software stores
5065*
5065
42169
5734
5734
44312
Radio, television and consumer electronics stores
5731
5731
443112, 44131
Telephone and telegraph communications
481+4822
481+4822
513321, 513322, 51333, 51331, 51334
Radio and television broadcasting Cable and other pay television services Computer rental & leasing; equipment rental & leasing NEC
483
483
4841
484
513111, 513112, 51312 51321, 51322
7377+7359*
7377+Part of 7359: NAICS 53242/(53221+532 31+532299+53241 2+532411+562991 +53242+53249)
53242
Computer integrated systems design; computer facilities management services
7373+7376
7373+7376
541513
Computer programming services Prepackaged software Computer processing and data preparation and processing services
7371
7371
541511
7372 7374
7372 7374
51121 51421
Information retrieval services
7375
7375
514191
Computer maintenance and repair
7378
7378
44312, 811212
Computer related services NEC
7379
7379
541512, 541519
Noncommercial research organizations Management consulting services (exc. Construction management services
8733*
873
54172
8742
8742
541611, 541612, 541613, 541614
Engineering, architectural and surveying services; construction management services
871
871
54133, 54131, 54136, 54137
Advertising agencies, public relations services
7311+8743
7311+8743
54181, 54182
Advertising NEC
7319
7319
Management consulting services (part of)
7313
7313
54183, 54185, 54187, 54189 54184
Motion picture and video tape production Motion picture and video tape distribution Motion picture theaters Business services (part of)
7812
7812
51211
7822
7822
51212
7832 7389*
7832 (NAICS 51224+51229)/SIC 7389
512131 51224, 51229
News syndicates
7383
7383
71151, 51411
* = part of
