Problems of the information age

Abstract

The role of information in the U.S. economy has been increasing in importance in direct proportion to the growth of information technology. The information sector of the economy is now its most rapidly increasing segment. In 1962, the economist Machlup studied the production and distribution of knowledge in the United States. In 1977, Porat estimated that about 46% of the U.S. workforce is now employed in the information sector of the economy. Among other things, this means that more people in the United States are employed in manipulating information than in manufacturing products, providing services, or growing food. The expected continued growth of the information sector implies that society is being transformed by information and its uses. The transformation is such as to make information the real source of economic and political power. The information age, or information society, is thus an era in which the exchange of information will be as critical a function of economic organization as the production of goods. One consequence of this is that information is now being treated as a commodity or a resource comparable to labor and capital. A slightly different view of information is that it conserves other resources through better decisions. What is common to all viewpoints is that by improving our handling of information we will raise private and public productivity.