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 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 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 ICT-

advanced 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 ICT-

producing 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

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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 1990-

2000

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.

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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.

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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

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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 computer-

related 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.

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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 knowledge-

intensive 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

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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 non-

profit establishments are included. A database containing nearly 87,000 observations on

commercial establishments with more than 100 employees for the period June 1998-

December 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 Cleveland San Francisco Stockholm Jönköping

Publishing 6.7 3.9 6.6 3.6

Advertising 3.8 3.1 7.2 6.0

Motion pictures & related services 1.9 1.7 5.3 2.4

Content subtotal 12.4 8.7 19.1 12.0

Computers & equipment 0.4 4.5 0.4 0.1

Electronic components and equipment 3.9 15.0 11.6 6.4

Instruments for measurement & control 10.2 9.6 1.7 12.8

Hardware subtotal 14.5 29.0 13.8 19.2

Computer programming, etc. 4.9 8.0 19.5 14.4

Prepackaged software 1.4 9.3 4.4 1.9

Computer processing & information retrieval services 5.0 5.3 2.1 2.8

Computer related services NEC 4.2 8.1 0.4 0.0

Software subtotal 15.5 30.7 26.4 19.2

Telephone and telegraph communications 8.8 5.5 6.5 10.7

Radio and television broadcasting 3.1 0.9 0.3 0.0

Cable and other pay television services 1.5 1.0 0.2 0.0

Telecom subtotal 13.4 7.4 6.9 10.7

Wholesale of computers & electronic equipment 19.3 9.0 9.9 13.4

Computer rental & leasing; equipment rental &

leasing NEC 0.1 0.2 0.2 0.0

Computer & electronic stores 7.2 3.6 1.2 1.2

Consulting services 17.6 11.6 22.8 24.2

Other services subtotal 44.1 24.2 33.9 38.9

Total 100.0 100.0 100.0 100.0

Table 3. Knowledge Economy Index, European Union, 1998

High-scoring regions

Index Low-scoring regions Index

Stockholm (S) 169.5 Notio Aigaio (Gr) 36.7

London (Inner) (UK) 166.8 Sterea Ellada (Gr) 38.4

West Sweden (S) 155.2 Peloponnissos (Gr) 43.9

Surrey & Sussex (UK) 153.6 Anat-Maked-Thraki (Gr) 46.4

Brabant Wallonie (BE) 152.4 Norte (P) 50.2

London (Outer) (UK) 151.6 Dytiki Ellada (Gr) 50.9

Piemonte (I) 150.7 Kriti (Gr) 50.9

East Middle Sweden (S) 150.0 Centro (P) 51.1

Berkshire-Oxford (UK) 149.0 Dytiki Makedonia 51.6

Bedford-Hertford (UK) 148.9 Alentejo (P) 53.8

Uusima (Helsinki) (Fi) 148.8 Ionia Nissia (GR) 53.9

Upper North Sweden (S) 148.4 Algarve (P) 54.7

South Sweden (S) 148.1 Thessalia (Gr) 55.2

Mid-North Sweden (S) 147.6 Ipeiros (Gr) 59.6

Brussels (BE) 145.0 Castilla la Mancha (ES) 60.6

Paris (F) 144.9 Voreio Aigaio (Gr) 62.3

N. Middle Sweden (S) 143.3 Kentriki Makedonia (GR) 62.7

Hampshire (UK) 141.6 Murcia (ES) 64.1

Stuttgart (G) 141.1 Estremadura (ES) 64.9

West Midlands (UK) 140.1 Balearics (ES) 65.3

EU 100.0

Source: Cooke & De Laurentis (2003).

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

27.1 13.6% 89.1% Pittsburgh, P A 39

54.0 13.9% 90.6% Boston--Worcester--Lawrence, MA--NH--ME--27

48.6 15.4% 90.9% Atlanta, GA 24

31.8 13.8% 91.4% Detroit--Ann Arbor--Flint, MI 21

77.9 14.7% 92.1% Austin--San Marcos, TX 14

37.4 13.5% 92.5% Los Angeles--Riverside-Orange County, CA 10

49.0 15.9% 92.7% Minneapolis--St. Paul, MN--WI 9

13.6 12.0% 93.0% Grand Rapids--Muskegon-HolIand, MI 8

N.A. 14.9% 93.0% Providence--Fall River-Warwick, RI--MA 7

15.0 15.3% 93.3% San Antonio, TX 6

49.8 16.7% 93.5% Salt Lake City--Ogden, UT 5

68.0 14.5% 93.9% Seattle-- Tacoma--Bremerton, W A 4

29.5 14.7% 94.8% Cleveland--Akron, OH 3

58.1 18.3% 95.9% Denver-- Boulder--Greeley, CO 2

95.6 17.0% 96.4% San Francisco--Oakland--San Jose, CA 1

Overall

New

Economy

Index

Enhanceme

nt rate

Participatio

n rate

City Ran

k

Table 6. Enhancement by Industry

2-digit NAICS industries

Percentage of

Establishments Using

the Internet for Business

Processes

Management of companies & enterprises 27.9

Media, Telecommunications & Data Processing 26.8

Utilities 21.1

Finance & Insurance 19.9

Professional, Scientific & Technical Services 19.6

Wholesale Trade 17.2

Manufacturing 3: Metals, Machinery, Computers &

Electronics, Appliances, Transport equipment,

Furniture & Other manufacturing 15.7

Real estate, Rental & Leasing 15.6

Transportation & Warehousing 2: Couriers &

Warehousing 15.5

Manufacturing 2: Wood, Paper, Printing, Petroleum,

Chemicals, Plastics & Rubber, Non-metallic minerals 14.4

Mining 12.4

Transportation & Warehousing 1: Transportation 12.0

Manufacturing 1: Food & Textiles 11.5

Accommodation & Food services 11.2

Agriculture, Forestry, Fishing & Hunting 11.1

Other services (except Public Administration) 10.7

Administrative, Support, Waste management &

Remediation services 10.6

Health care & Social assistance 9.8

Retail trade 1: Durables 9.7

Arts, Entertainment & Recreation 9.6

Construction 9.4

Retail Trade 2: Nondurables 7.0

Educational services 6.2

Source: Forman, Goldfarb & Greenstein (2002).

Table 7.

Figure 1. ICT Employment as % of Total Employment, 2000

0 2 4 6 8 10 12 14

Netherlands

Finland

Ireland

Ohio

United States

Sweden

California

Massachusetts

MUTEIS def.

Figure 2. ICT Employment as % of Total Employment, 2000

0 2 4 6 8 10 12 14 16 18

Groningen

Cleveland

Dublin

Detroit

Pittsburgh

Jönköping

Seattle

Helsinki

Amsterdam

Atlanta

Denver

Boston

Oulu

Stockholm

Austin

SanFrancisco

MUTEIS def.

Figure 3. Distribution of ICT Employment by Sub-sector, 2000(MUTEIS definition excluding "Other Services")

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Cleveland

Jönköping

Helsinki

Amsterdam

Boston

Oulu

Stockholm

San Francisco

Hardware

Software

Telecom

Content

Figure 4. ICT Sector as Percentage of Total Civilian Employment 1990 and 2000various definitions

0

2

4

6

8

10

12

14

16

18

20

United States Massachusetts Sweden Boston Stockholm

Dept of Commerce 1990

Dept of Commerce 2000

MUTEIS 1990

MUTEIS 2000

JIBS 1990

JIBS 2000

Figure 5. ICT Employment Growth, 1990-2000MUTEIS definition

0 1 2 3 4 5 6 7 8 9

Jönköping

Sweden

Stockholm

Finland

Boston

Cleveland

Massachusetts

Ohio

California

U.S.

Helsinki

San Francisco

Oulu

Growth rate, %

Figure 6

Distribution of ICT Sector Employment by Sub-Sector, %, 2000

San Francisco, Cleveland, Stockholm and Jönköping

(JIBS definition)

0

5

10

15

20

25

30

35

40

45

50

Content Hardware Software Telecom Otherservices

San Francisco

Cleveland

Stockholm

Jönköping

Figure 7. Knowledge Economy Index (1998) and ICT Employment Share

(2000)

0 5 10 15 20

Dublin

Oulu

Groningen

Jönköping

Amsterdam

Helsinki

Stockholm

Knowledge Economy Index

% ICT employment

Figure 8. ICT Employment Share and New Economy Index, U.S. Metro Areas,

2001

0

2

4

6

8

10

12

14

16

18

Austin Boston California Detroit Cleveland

% ICT employment

Overall New Economy Index/10

Figure 9. ICT Employment, New Economy Index and Internet Use

in U. S. Regions, 2000

0

2

4

6

8

10

12

14

16

18

20

Den

ver

San F

ranc

isco

Atlant

a

Cleve

land

Austin

Seattle

Mas

sach

uset

ts

Bosto

n

Det

roit

Califo

rnia

Pittsb

urgh

Unite

d Sta

tes

Ohio

% ICT employment

Overall New Economy Index/10

Enhancement rate, %

Figure 10.

Figure 11.

Figure 12.

Appendix 1 Concordance between the Swedish Industrial Classification (SNI92) and the U.S. Standard Industrial Classification (SIC)

SNI92 SIC 2211

0

Bokutgivning Book publishing 2731 273

2212

1

Dagstidningsutgivning Newspaper publishing 2711 271

2212

2

Annonstidningsutgivning Incl. in 2741 *

2213

0

Utgivning av tidskrifter Periodicals publishing 2721 272

2214

0

Fonogramutgivning Incl. in 2741 *

2215

0

Annan förlagsverksamhet Misc. publishing 2741 274

3001

0

Tillverkning av kontorsmaskiner och datorer

Calculating & accounting machines exc. Computers

3578 3578

3002

0

Tillverkning av datorer och annan informationsbehandlingsutrustning

Computers & equipment 3571+3572+3575+3577

357 exc 3578

3130

0

Tillverkning av elektrisk tråd och kabel

Current-carrying wiring devices

3643 3643

3210

0

Tillverkning av elektroniska komponenter

Electronic components 367 367

3220

0

Tillverkning av radio- och TV-sändare samt apparater för trådtelefoni och trådtelegrafi

Radio & television broadcasting and communications equipment; telephone and telegraph apparatus

3663+ 3661 (=366)

366

3230

0

Tillverkning av radio- och TV-mottagare samt apparater för upptagning och återgivning av ljud och videosignaler

Household audio and video equipmt; prerecorded records & tapes

3651 + 3652 (= 365)

365

3320

0

Tillverkning av instrument och apparater för mätning, kontroll, provning, navigering och andra ändamål utom industriell processtyrning

Instruments for measurement & control

382 exc.3823

382 exc 3823

3330

0

Tillverkning av instrument för styrning av industriella processer

Industr. Instruments for measurement, display & control

3823 3823

5143

1

Partihandel med hushållsmaskiner och apparater

Office equipment wholesale 5044* Part of 5044: NAICS 42142/(42142+45321)

5143

2

Partihandel med radio- och TV-apparater

Electrical appliances, TV & radio sets wholesale

5064 5064

5143

3

Partihandel med fonogram och videokassetter

Wholesale of durable goods NEC

5099* …….

5143

4

Partihandel med elartiklar Wholesale of electrical apparatus & equipment

5063* Part of 5067: NIACS 42161/(42161+44419)

5165

1

Partihandel med mät- och precisionsinstrument

Wholesale of commercial equipment NEC

5046* 5046

5165

2

Partihandel med datoriserad materialhanteringsutrustning

Wholesale of Industrial machinery & equipment

5084* 5084

5165

3

Partihandel med teleprodukter och elektronikkomponenter

Wholesale of electronic parts & equipment

5065* 5065

5165

9

Partihandel med övriga maskiner för industri, handel och sjöfart

Wholesale of Industrial machinery & equipment

5084* …..

5249

3

Butikshandel med datorer, kontorsmaskiner och programvara

Computer and computer software stores

5734 5734

5249

4

Butikshandel med kommunikationsutrustning

Radio, television and consumer electronics stores

5731 5731

6420

1

Nätdrift Telephone and telegraph communications

481+4822

481+4822

6420

2

Radiering Radio and television broadcasting

483 483

6420

3

Kabel-TV-drift Cable and other pay television services

4841 484

7133

0

Uthyrning av kontorsmaskiner och kontorsutrustning inkl. Datorer

Computer rental & leasing; equipment rental & leasing NEC

7377+7359*

7377+Part of 7359: NAICS 53242/(53221+53231+532299+532412+532411+562991+53242+5324

9)

7210

0

Konsultverksamhet avseende maskinvara

Computer integrated systems design; computer facilities management services

7373+7376

7373+7376

7220

1

Datakonsultverksamhet Computer programming services

7371 7371

7220

2

Programvaruproduktion Prepackaged software 7372 7372

7230

0

Databehandling Computer processing and data preparation and processing services

7374 7374

7240

0

Databasverksamhet Information retrieval services 7375 7375

7250

0

Underhåll och reparation av kontors- och bokföringsmaskiner samt databehandlingsutrustning

Computer maintenance and repair

7378 7378

7260

0

Övrig datoranknuten verksamhet

Computer related services NEC

7379 7379

7310

1

Naturvetenskaplig och teknisk forskning och utveckling

Noncommercial research organizations (part of)

8733* 873

7310

2

Teknisk forskning och utveckling

Noncommercial research organizations (part of)

8733* …..

7320

1

Samhällsvetenskaplig forskning och utveckling

Noncommercial research organizations (part of)

8733* …..

7414

0

Konsultverksamhet avseende företagens organisation, information, m.m.

Management consulting services (exc. Construction management services

8742 8742

7420

2

Bygg- och annan teknisk konsultverksamhet

Engineering, architectural and surveying services; construction management services

871 871

7440

1

Reklambyråverksamhet Advertising agencies, public relations services

7311+8743

7311+8743

7440

2

Annonsförmedling Advertising NEC 7319 7319

7440

9

Övrig marknadsföringsverksamhet

Management consulting services (part of)

7313 7313

9211

0

Film- och videoproduktion Motion picture and video tape production

7812 7812

92 Film- och videodistribution Motion picture and video tape 7822 7822

120

distribution

9213

0

Filmvisning Motion picture theaters 7832 7832

9220

0

Radio- och TV-programverksamhet

Business services (part of) 7389* (NAICS 51224+51229)/SIC7389

9240

0

Nyhetsservice News syndicates 7383 7383

* = part of

North American Category Description SIC Code Translation

NAICS translation of "Code

Translation"

Book publishing 2731 273 51113 Newspaper publishing 2711 271 51111 Incl. in 2741 * Periodicals publishing 2721 272 51112 Incl. in 2741 * Misc. publishing 2741 274 51114, 51223,

511199 Calculating & accounting machines exc. Computers

3578 3578 333311, 333313

Computers & equipment 3571+3572+3575+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+45321)

42142

Electrical appliances, TV & radio sets wholesale

5064 5064 42162

Wholesale of durable goods NEC

5099* ……. 42199

Wholesale of electrical apparatus & equipment

5063* Part of 5067: NIACS 42161/(42161+44419)

42161

Wholesale of commercial equipment NEC

5046* 5046 42144

Wholesale of Industrial machinery & equipment

5084* 5084 42183

Wholesale of electronic parts & equipment

5065* 5065 42169

Computer and computer software stores

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

483 483 513111, 513112, 51312

Cable and other pay television services

4841 484 51321, 51322

Computer rental & leasing; equipment rental & leasing NEC

7377+7359* 7377+Part of 7359: NAICS 53242/(53221+53231+532299+532412+532411+562991+53242+53249)

53242

Computer integrated systems design; computer facilities management services

7373+7376 7373+7376 541513

Computer programming services

7371 7371 541511

Prepackaged software 7372 7372 51121 Computer processing and data preparation and processing services

7374 7374 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

8733* 873 54172

Management consulting services (exc. Construction management services

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 54183, 54185, 54187, 54189

Management consulting services (part of)

7313 7313 54184

Motion picture and video tape production

7812 7812 51211

Motion picture and video tape distribution

7822 7822 51212

Motion picture theaters 7832 7832 512131 Business services (part of) 7389* (NAICS

51224+51229)/SIC7389

51224, 51229

News syndicates 7383 7383 71151, 51411

* = part of