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The Positive Sum Strategy Harnessing Technology for Economic Growth (1986) / Chapter Skim
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Macrorealities of the Information Economy
Pages 93-104

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From page 93...
... A shortcoming of this approach is Hat it fails to consider He role of technology in the context of dramatic shifts that have occurred in He macros~cture of the economy. Indeed, it can now be demonstrated Hat high technology holds He key to the evolution of what can be called "~e information economy" a core of activities Hat increasingly has become a dominant source of economic progress in the United States.
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From page 94...
... An important by-product of such trends was that job growth shifted dramatically away from employment on the factory assembly line and toward the white-collar work force. Such workers had labored for years at a distinct disadvantage because they had relatively limited productive capital at their disposal.
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From page 95...
... Moreover, on a per unit basis, the rise in profitability for information-intensive industnes exceeded the growth in output over the past 10 years a clear sign of an advantageous shift in earnings leverage that is another important by-product of an emerging information economy. INFORMATION WORKERS AND THE INVESTMENT RESPONSE Table 1 illustrates one of the most important charactenst~cs of the information sector—the employment of a relatively large share of what traditionally has been referred to as We economy's "white-collar" occupations.
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From page 96...
... From the mid-1960s through 1984, high-tech spending defined as computers, office machines, com- munications equipment, instruments, industrial control and measuring devices, and miscellaneous electrical components and machinery almost tripled as a portion of total business fixed investment, rising from about 12 percent to over 35 percent. Similarly, during Me same period, the employment share of infonnaiion workers climbed an estimated 10 percentage points to about 55 percent of the nonfarm work force.
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From page 97...
... Indeed, it is increasingly important to view He extraordinary acceleration of spending on high technology as the complementary investment response to the rapid expansion of the information work force. This conclusion is based on Be fact Hat high technology capital turns out to be the mainstay of 'production" in He information segment of our economy.
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From page 98...
... (Allocation of private domestic final shim meets in 1982.) SOURCE: Morgan Stanley economics estimates based on input-output industry dis~ibution tables provided by the Interindustry Service of Data Resources, Inc.
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From page 99...
... Dashed lines indicate Morgan Stanley economics projections. SOURCE: Morgan Stanley Economics Projections, June 15, 1984.
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From page 100...
... Potentially, these relative movements may have even more to say about this nation's productivity potential than do summary ratios that lump together and weigh the many diverse types of capital against a variety of widely disparate occupational categories of the work force. A key question, of course, is whether the rapidly rising endowment of high-tech capital embodies efficiencies that ultimately could generate improvements in infoImation-worker productivity.
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From page 101...
... Quite simply, an expansive fiscal policy in We context of monetary discipline and flexible exchange rates will continue to cause currency strains and heightened import penetration. And as recent trends strongly hint, Me high technology sector in Me United States could find itself as the new victim of this untenable imbalance in the mix of public policy.
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From page 102...
... information-intensive activities. The dramatic improvements Mat have recently occurred in the high-tech capital endowment of the information world force suggest that this transitional interlude may be coming to an end.
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From page 103...
... That hesitation has passed, and economic performance over Be next several decades now appears to depend critically on the new realities of the information economy.
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Key Terms

  • morgan stanley
  • information sector
  • stanley economics
  • basic industrial
  • production worker

  • information workers
  • assembly line
  • stanley economic
  • factory assembly
  • capital spending

  • information work
  • lines indicate
  • indicate morgan
  • dashed lines
  • economic perspectives

  • productive capital
  • exchange rates
  • productivity growth
  • production workers
  • economics projections

  • nonfarm work
  • productivity change
  • workers workers
  • left scale
  • private nonfarm

  • shifted dramatically
  • investment response
  • sector includes
  • office machinery
  • infonnation sector


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