2.1. Information industries

The contribution of information industries to total industry value added has remained relatively stable over the past ten years. However, important compositional changes have seen a general shift towards IT and other information services, while the weight of ICT manufacturing and telecommunications services has generally declined in OECD countries. The contribution to total value added from Computer, electronics and optical manufacturing, and from telecommunication services, diminished as production shifted to other, mostly non-OECD, economies. Meanwhile, unit prices fell due to productivity growth and increased competition. On average, across OECD countries, the share of Computer, electronic and optical manufacturing dropped from 1.4% in 2006 to 1.1% of total value added in 2016, and fell especially steeply in Finland, Sweden and Ireland. The share of telecommunication services also decreased from 1.9 % to 1.4% on average.

The share of publishing and media activities in total value added grew markedly in Ireland (by 2.8 percentage points) and Sweden (by 1.3 percentage points), but remained relatively stable in most other countries. In many countries declines in other ICT industries were largely offset by increases in the value added share of IT and other information services, which rose strongly from around 1.6% to 2.2% on average. These services include computer programming and consultancy, web portals, and data processing and hosting – activities closely related to cloud computing services, which increasingly appear to be substituting for direct investment in ICT goods for many businesses. This increase was especially marked in Estonia (2.1 percentage points) and Latvia (1.8 percentage points).

Reflecting the shift towards ICT services – which are relatively more labour intensive, on average – employment in information industries accounted for 3.7% of total employment in OECD countries in 2016, more than in 2006 (3.5%). By country, shares (and trends) in employment are similar to those for value added, although in general information industries account for a much lower share of employment than value added, reflecting their comparatively high levels of labour productivity. Information industries generate over 5% of employment in Israel, Estonia, Switzerland, Iceland and Korea, but less than 2% in Chile and Turkey. In nearly all countries, IT and other information services have become the most sizeable component in employment terms, except in Switzerland and Mexico where ICT manufacturing remains the largest employer, albeit with declining shares due to productivity gains and businesses electing to source more intermediate inputs from abroad.

Did You Know?

In 2016, information industries contributed around 6% of total value added and 3.7% of employment across OECD countries.

Definitions

Information industries combines the OECD definitions of the “ICT sector” and the “content and media sector” (OECD, 2011). While this definition includes detailed (three- and four-digit) ISIC Rev.4 industrial activities (United Nations, 2008), in this analysis it is approximated by the following ISIC Rev.4 (two-digit) Divisions, due to limited data availability: “Computer, electronic and optical products” (Division 26), “Publishing, audiovisual, and broadcasting activities” (58 to 60), “Telecommunications” (61), and “IT and other information services” (62 to 63).

Value added consists of the value of production net of the costs of intermediate inputs. In practice, it includes both gross profits and wages, and at an aggregate level is equivalent to GDP.

Measurability

A definition of information industries based on ISIC Rev.4 (two-digit) Divisions is used here because national accounts by economic activity statistics are generally not available at more detailed levels. However, this means that the following ISIC Rev.4 (three-digit) manufacturing groups are included that are not part of the “ICT sector” definition: “Manufacture of measuring, testing, navigating and control equipment; watches and clocks” (group 265), “Manufacture of irradiation, electromedical and electrotherapeutic equipment” (266) and “Manufacture of optical instruments and photographic equipment” (267). Furthermore, “ICT sector” services covering ICT wholesale trade (ISIC Rev.4 classes 4651 and 4652) and repair of ICT equipment (group 951) are excluded.

The extent to which the use of the full OECD ISIC Rev.4 definition of information industries differs from the aggregate (two-digit) approximation varies across countries. More detailed activity data may be available from underlying business statistics sources, but are rarely published as part of national accounts statistics - required for productivity measurement and analysis, for example. More detailed statistics would also allow for more focused analyses of the ICT sector, both manufacturing and service activities.

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