2.2.2Information Technology and Inequalities
2.2.2.1Inequality across Industries
Figure 2.6 pictures the important increase in the level of IT capital stock in most industry sectors between 1977 and 1997. Between these two years, total private nonfarm IT capital stock grew from less than $2 billion in 1977 to more than $12 billion in 1997. Table 2.1 reports absolute and relative levels of IT across industries, as well as IT ratios, in 1977, 1987 and 1997. The transportation sector alone owned more than half of the total IT capital stock in 1977 (53%), but only 29% in 1997.This relative decrease was due to the tremendous growth of IT capital stock in the wholesale trade sector, going from a $53 million to a $1.5 billion dollars stock and owning 13% of the total IT capital stock in the country in 1997 (only 3% in 1977).
| Industry | Level of IT | Share of IT | Ratio of IT | ||||||
| 1977 | 1987 | 1997 | 1977 | 1987 | 1997 | 1977 | 1987 | 1997 | |
| Mining | 1.09 | 97 | 107 | 0 | 2 | 1 | 0 | 2 | 3 |
| Construction | 2.57 | 6.7 | 11.1 | 0 | 0 | 0 | 0 | 1 | 1 |
| Manufacturing | 277 | 757 | 1720 | 14 | 15 | 15 | 3 | 6 | 12 |
| Transportation | 1060 | 2200 | 3290 | 53 | 45 | 29 | 7 | 12 | 16 |
| Wholesale Trade | 52.7 | 421 | 1520 | 3 | 9 | 13 | 4 | 16 | 34 |
| Retail Trade | 39.4 | 118 | 479 | 2 | 2 | 4 | 2 | 3 | 9 |
| F.I.R.E. | 322 | 811 | 2400 | 16 | 17 | 21 | 4 | 6 | 13 |
| Services | 228 | 506 | 1930 | 12 | 10 | 17 | 7 | 11 | 25 |
| Note: “Levels” represent the absolute value of IT capital stock in 1992 constant million dollars. “Shares” are the industry percent of the aggregate stock of IT, and “ratios” express IT capital stock as a percentage of total capital stock. F.I.R.E. represents Finance, Insurance and Real Estate sector. | |||||||||
Between 1977 and 1997, the service industry1 held a little more than 80% of total IT equipment in the United States. Most of the remaining share of IT capital stock was in the manufacturing sector. Relative shares of IT capital stock by industries are reported in Figure 2.7. The manufacturing and service shares of IT capital stock remained relatively stable over time (around ¼ and ¾, respectively).
On the other hand, the intensity of IT capital has been very unequal across industries. As stated in section 2.1, the IT ratio is usually low (in 1997, around 15% on average). However, Figure 2.8 shows that this ratio varies greatly across industries. In 1977, transportation was the most IT intensive sector (IT capital was 7% of total capital), followed by service, FIRE, wholesale trade, manufacturing and retail trade, respectively. This ranking changed in 1997, with the transportation sector becoming the third most IT intensive industry. The most impressive growth of IT intensity was observed in the wholesale trade sector, growing from an IT ratio of 4% in 1977 to 34% in 1997.
Thus, industries vary greatly regarding their IT capital stock in absolute level, in shares, and in IT capital intensity. These differences have remained between 1977 and 1997. It appears that sectors that own the highest share of IT capital are also the most IT intensive, with highest IT ratios. Furthermore, because of different industry mixes, U.S. states differ also greatly in their absolute and relative levels of IT capital and IT intensity. This fact is presented in the following section.
