Electronic commerce (business transactions on the Web) and the information technology (IT) industries that make “e-commerce” possible are growing and changing at breathtaking speed, fundamentally altering the way Americans produce, consume, communicate, and play.
• Growth in the available measures of e-commerce (e.g., estimates of the value of e-commerce business transactions) is outpacing last year’s most optimistic projections. As a share of the retail portion of the economy, however, e-commerce remains quite small — less than 1 percent.
• IT-producing industries (i.e., producers of computer and communications hardware, software, and services) that enable e-commerce play a strategic role in the growth process. Between 1995 and 1998, these IT-producers, while accounting for only about 8 percent of U.S. GDP, contributed on average 35 percent of the nation’s real economic growth.
• In 1996 and 1997 (the last years for which detailed data are available), falling prices in ITproducing industries brought down overall inflation by an average 0.7 percentage points, contributing to the remarkable ability of the U.S. economy to control inflation and keep interest rates low in a period of historically low unemployment.
• IT industries have achieved extraordinary productivity gains. During 1990 to 1997, IT-producing industries experienced robust 10.4 percent average annual growth in Gross Product Originating, or value added, per worker (GPO/W). In the goods-producing subgroup of the IT-producing sector, GPO/W grew at the extraordinary rate of 23.9 percent. As a result, GPO/W for the total private nonfarm economy rose at a 1.4 percent rate, despite slow 0.5 percent growth in non-IT-producing industries.
• By 2006, almost half of the U. S. workforce will be employed by industries that are either major producers or intensive users of information technology products and services. Innovation has increased demand for high paid, "core IT workers" (e.g., computer scientists, engineers), created new IT occupations, changed skill requirements for some non-IT occupations, and raised minimum skill requirements for many other jobs. Wage gaps between workers in IT industries and all other workers continue to widen.
• The pervasiveness of information technology, the variety of its benefits to producers and consumers, and the speed of economic change in the digital era have tested the limits of established indices of economic performance. Federal statistical agencies have taken steps to improve data collection and analysis, but much remains to be done.