Input–Output Recipes in an Information Economy

Abstract

Input–Output can contribute most successfully where industries are strongly interdependent, where individual sectors differ significantly in their input structures and where those input structures change slowly. These conditions have been satisfied for the most part in traditional goods-producing industries and particularly in manufacturing where regular and detailed Census information supplied a strong database for constructing tables. Service sectors, which have been growing in relative importance, are less dependent on other sectors and are apparently relatively uniform in input structure. These and high-tech sectors depend heavily on information flows and on highly specialized human capital both of which are harder to map than conventional goods. A sketch of specialization in SIC 7372, ‘Prepackaged Sofware’, illustrates some challenges encountered in attempts to describe the structure of the information economy. Three are singled out: difficulties in valuing and tracing information flows as contrasted with conventional transactions, the significance of costs of change itself as distinguished from conventional production costs and the absence of accounts for a specialized human capital.