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Service Industrialization, Employment and Wages in the US Information Economy

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  • Nath, Hiranya
  • Apte, Uday
  • Karmarkar, Uday

Abstract

The US economy has undergone significant shifts towards services and towards information intensive industries. The latter trend has been driven by advances in information technology. These advances have concurrently led to substantial changes in the production and delivery of services, especially notable in information-intensive sectors. We examine these changes from the perspective of service industrialization, since they are similar in many ways to the historical industrialization of goods production. We focus on the effect of industrialization on employment and wages, and identify certain important consequences of this direction. One major consequence is the impact on the customer facing services and the front office in addition to the effect on service processes in the back room. An important aggregate result is a decline in white collar jobs in both those categories. A larger effect is at the sector level, with significant disruptions in some sectors leading to their substantial restructuring. Such disruptions are likely to occur in other information intensive sectors as well.

Suggested Citation

  • Nath, Hiranya & Apte, Uday & Karmarkar, Uday, 2020. "Service Industrialization, Employment and Wages in the US Information Economy," Foundations and Trends(R) in Technology, Information and Operations Management, now publishers, vol. 13(4), pages 250-343, July.
    • Handle: RePEc:now:fnttom:0200000050
    DOI: 10.1561/0200000050
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    References listed on IDEAS

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    1. Edward Wolff, 2006. "The growth of information workers in the US economy, 1950-2000: the role of technological change, computerization, and structural change," Economic Systems Research, Taylor & Francis Journals, vol. 18(3), pages 221-255.
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