Foundations and Trends® in Technology, Information and Operations Management > Vol 13 > Issue 4

Service Industrialization, Employment and Wages in the US Information Economy

Hiranya Nath, Sam Houston State University, USA, eco_hkn@shsu.edu Uday Apte, Naval Postgraduate School, USA, umapte@nps.edu Uday Karmarkar, UCLA Anderson School of Management, USA, uday.karmarkar@anderson.ucla.edu
 
Suggested Citation
Hiranya Nath, Uday Apte and Uday Karmarkar (2020), "Service Industrialization, Employment and Wages in the US Information Economy", Foundations and Trends® in Technology, Information and Operations Management: Vol. 13: No. 4, pp 250-343. http://dx.doi.org/10.1561/0200000050

Publication Date: 01 Jul 2020
© 2020 Hiranya Nath, Uday Apte and Uday Karmarkar
 
Subjects
Labor Economics
 
Keywords
information economyservice industrializationUS economyjobsemploymentjob and employment trendsinformation intensive services
 

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In this article:
1. Introduction
2. Literature Review
3. Service Industrialization
4. Major Trends in the US Economy
5. Service Industrialization, Jobs and Wages
6. Aggregate Changes in Employment and Wage Bill Shares
7. Observations and Conclusions
8. Implications for Management and Public Policy
9. Future Research
Appendices
A. Measuring the Double Dichotomy of the US Economy: Data, Methodology, and Major Findings
B. Job and Wage Bill Shares by Sectors and Occupations
References

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.

DOI:10.1561/0200000050
ISBN: 978-1-68083-694-3
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ISBN: 978-1-68083-695-0
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Table of contents:
1. Introduction
2. Literature Review
3. Service Industrialization
4. Major Trends in the US Economy
5. Service Industrialization, Jobs and Wages
6. Aggregate Changes in Employment and Wage Bill Shares
7. Observations and Conclusions
8. Implications for Management and Public Policy
9. Future Research
Appendices
A. Measuring the Double Dichotomy of the US Economy: Data, Methodology, and Major Findings
B. Job and Wage Bill Shares by Sectors and Occupations
References

Service Industrialization, Employment and Wages in the US Information Economy

Service Industrialization, Employment and Wages in the US Information Economy has three main research objectives: examine the impact of service industrialization on employment and wages in the US and understand the forces that drive them; using national income and labor data until 2017 to present a macroeconomic context for an analysis of employment and wages; and identify implications of the above for management and public policy. After a brief introduction, the authors present a review of relevant literature. The third section discusses service industrialization and the “services revolution”. The authors present an update of the major trends in the US economy up to 2017 in the fourth section. The fifth section identifies and discusses the forces including service industrialization that are driving the changes in the economy with an emphasis on the employment and job effects. The sixth section presents a more detailed breakdown of jobs based on SOC (Standard Occupational Classification) codes, and wages by sectors based on NAICS (North American Industrial Classification System) codes. The seventh section presents other important observations and conclusions regarding service industrialization and demographic changes in the seventh section. In the eighth section, the monograph reviews the implications of the trends discussed earlier for managers and policy makers to address the issues that are being faced at all levels of the economy. The final section presents concluding remarks about the potential for future research.

 
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