The study analyses the role of the information sector in three dynamic economies of the Pacific. The information sector is conceptualized in terms of industries and subdivided into the primary and secondary information sector (PRIS and SIS). The research focuses on case studies on Japan, Korea and Taiwan. Some comparisons to the U.S. are also drawn.
The major objectives of the study are to: a) analyse the causes underlying information sector growth, b) investigate its economic attractiveness from inter and intra-country perspectives, c) derive policy conclusions in regard to information industries and resources and d) reflect on the nature and usefulness of the information sector concept in light of the results.
Different analytical tools are used to analyse various aspects of the information sector. Input-output (I/O) techniques are used to analyse structural changes, the effects of exogenous sectoral final demand increases, and to estimate embodied PRIS exports. Furthermore, to obtain richer policy conclusions for Japan and Korea, computable general equilibrium (CGE) modeling is applied. Also, the study investigates the extent of suboptimal information resource use and the substitutability of factor inputs using production function analysis.
The decomposition of structural change undertaken in this study supports the use of the PRIS concept. However, it also confirms the sector's heterogeneity. The I/O and CGE analyses of the effects of final demand changes confirm the relative attractiveness of PRIS growth compared to the growth of non-information sectors. This largely depends on the realization of consumption induced effects, providing a new perspective on import controls practised by Japan, Korea and Taiwan. Moreover, the importance of the sector Education and Research is reinforced for all three economies. Korea seems to benefit more from PRIS final demand expansion than Japan. The CGE scenario impacts also indicate that it would be much easier for Japan than Korea to switch from an export to a domestic demand based development strategy. Such a shift in strategy is advocated for Japan. The analysis of embodied PRIS trade provides empirical evidence for the hypothesis that the PRIS intensity of exports rises with the level of economic development. It is an increasingly important determinant of comparative advantage.
The comparison of sectoral information input levels in Japan and the U.S. shifts the focus of the analysis from mainly demand side to supply side effects. Despite large final demand impacts of PRIS and SIS, the U.S. is found to have a low level of informational efficiency compared to Japan, due to the prevalence of inappropriate organizational structures. The relationship between informational efficiency and organizational design is a major determinant of productivity, and therefore economic, growth. It will ultimately decide the success or failure of information based economies.
The degree of suboptimal information resource use seems to be inversely related to the level of economic development. The results of the production function analysis for the U.S. are markedly different from those reported in earlier studies. The substitution elasticity estimates suggest several hypotheses for information sector growth which warrant further investigation. In particular, factor price distortions in favour of capital might be an important reason for the growth of the SIS in many economies.
The question of whether investment in information resources and information industries should be increased cannot be answered conclusively with the macroeconomic approach adopted in this thesis. It requires detailed microeconomic studies of demand and supply conditions of information inputs and the assessment of the degree of informational efficiency.
The empirical results reinforce the view that the information sector concept reflects a new paradigm. It has elements of both a development theory and strategy. However, linear development theories based on it are dismissed as gross oversimplifications. In retrospect, changes in the measurement of the information sector are suggested which would facilitate further research.
Throughout the thesis the limitations of the analytical techniques used and neglected aspects of the study are pointed out, indicating areas for further research.