Professional Documents
Culture Documents
practices restricted competition, for example, the working-he came up with some astounding statis-
patent system. He then became interested in the tics in 1962.
cost of the patent system as opposed its benefits, 1. The aggregate knowledge production made
which led to his asking: What portion of the total up 29% of the adjusted gross national product
research and development (R&D) effort do patents (GNP);
make up? Because R&D is closely linked with 2. The rate of growth was projected at 2.5 times
education, then high-quality education is a precon- the average growth rate of other components
dition to quality research. He therefore had to of the total GNP, and knowledge production
enquire into the educational system at all levels to would soon reach 50% of the GNP.
find out how the nation produced knowledge-not 3. The total civilian labor force engaged in
just scientific and technical information-but all knowledge-producing activities was equal to
schooling, all college work, and all graduate educa- 31.6% in 1969, and if full-time students of
tion had to be included in a comprehensive study of working age were added, the total labor force
the production of knowledge in the United States. would be equal to 42.8% of the population.
The steps that led Machlup to make his study of
the production of knowledge in the United States The book had quite an effect. Machlup called the
may be summarized as follows: aggregate effort the "knowledge industry" and, by
implication, the university that is at the center of
Study of monopoly and competition in a free soci- knowledge production and teaching was equated to
ety, e.g., patent system - Cost of the patent an industry. This upset some people. Students and
system and its relation to R&D Cost of R&D
-
professors charged Machlup with having called the
and education - Comprehensive study of the large university a "knowledge factory" [7].
production of knowledge in the United States. But in general, the book was praised. The Politi-
cal Science Quarterly [8], the American Economic
By the time Machlup was through, his conceptuali- Review [9], and the Journal of Political Economy
zation of the entire knowledge effort included the [10], all prestigious publications, had favorable
following: reviews. Finally, Clark Kerr, then president of the
-Research and development University of California, Berkeley, cited Machlup's
-Education-on all levels notion of the "knowledge industry" in concert with
-Communication and its media, e.g., books, Abraham Flexner's "idea of a modern university"
journals, radio, television, artistic creation, [11]. Then it was caught up in the more widely
entertainment circulated media. Kenneth Boulding wrote about it
-Information machines, e.g., computers, elec- in Challenge [12] and Gilbert Burck reviewed it in
tronic data processing, telecommunication, Fortune [13]. Then it was translated into Russian
office machines and Japanese.
-Information services, e.g., libraries and infor- Machlup's work led to publications by a series of
mation centers; that portion of govern- other authors. In 1969, Peter Drucker, in his best-
mental, legal, financial, engineering, and selling book The Age of Discontinuity, wrote a
medical services that are dependent upon section on "The Knowledge Society," based upon
information. Machlup's data and projections [14]. Drucker
This in turn led to a quantitative study of the added that, by the late 1 970s, the knowledge sector
share of information as a component of the gross would account for one half of the GNP. That did it.
national product of the United States. So Machlup The knowledge/information society was born. By
began with a study of the theory of competition and 1970, the term with its variants began to appear in
monopoly and ended up with a statistical investiga- the library/information science literature. In 1970,
tion of knowledge production in the United States. the theme for the annual meeting of the American
This took him some thirty years. Society for Information Science was "The Infor-
And what did Machlup find? With this aggre- mation-Conscious Society" and one paper ad-
gate definition of knowledge production: education, dressed the "Advent of the Information Age"
various printed and electronic media, artistic cre- [15].
ation, telecommunication, postal services, and The Coming of the Post-Industrial Society, by
information technology-and thrown into all of Daniel Bell, issued in 1973, was an immensely
this, the cost of students being in school instead of popular book [ 16]. In the postindustrial society, the
TABLE I
DEFINITIONS OF THE INFORMATION ECONOMY: MACHLUP AND PORAT
Machlup (1962) Porat (1977)
1. Basic units are organizations and individuals that 1. Basic units are information activities. Porat exam-
produce information goods and services, e.g., in- ines each activity to see if it is information-related,
dustrial firms, institutions, departments, individu- then ascribes costs to that activity. There is a pri-
als/households. mary sector whose major activity is information;
and a secondary sector with only some information
activity.
2. Objective: to regroup these into 5 sectors (educa- 2. Objective: to measure the information economy by
tion, research and development, communications, reformatting costs into U.S. National Accounting
information services, information machines) to de- categories.
scribe the scope of the information economy and to
ascribe costs.
3. Total: 28.5% of gross national product. 3. Total: 25% of gross national product.
Machlup's basic units are organizations or indi- demic centers does not reflect the restricted tradi-
viduals that produce knowledge, information tional view [20].
goods, and related services. Machlup tries to Our next question is: What is the trend in
regroup these to describe the scope of the informa- distribution of GNP among the economic sectors, if
tion economy and then to determine costs. One we include the information sector? Are information
might question some of Machlup's assumptions. services and products increasing or decreasing in
His concept of education is broad and bears little comparison with agriculture, industry, and ser-
relationship to how the federal government mea- vices? Porat has compiled data for 1929 through
sures educational expenditures; for example, the 1972. As indicated in Table 2, the average annual
cost of education in the home includes wages that growth rate for these years in constant dollars is
parents would be earning if they worked instead of indeed highest in the information sector at 6% to
staying at home. 10% in comparison with the government sector and
Porat's basic unit is information activity. In the services sector [21]. But, what is interesting is
brief, he examines each activity, and if it is infor- that an update of Porat's analysis showed that the
mation-related, ascribes costs to that activity. The information sector had actually declined from
costs are then reformatted according to U.S. 25.1% of the GNP in 1967 to 24.8% in 1972 [22].
National Income Accounting categories. Cooper projects a leveling off in the future [23].
It is on this basis that Machlup calculated in What does all of this add up to? Two economists
1962 that information products and services made have regrouped the outputs of existing industries,
up 28.5% of the gross national product, whereas and were able to form a new "information" catego-
Porat's estimate was around 25%. Information ry. Some of the outputs or activities are new, in the
activities, as they define them, make up a signifi-
cant portion of our economy. TABLE 2
It should be noted that, in the information econo- AVERAGE ANNUAL GROWTH RATE OF INDUSTRY,
my, the traditional library plays a very small role. SERVICES, GOVERNMENT AND INFORMATION SECTORS,
Porat relegates libraries to a subset of public infor- 1948-1972
mation services under the category "Information
Distribution and Communication Industries." Sector Average Annual
Growth Rate, %
Machlup had plans to update his 1963 work and to
expand it to eight volumes. Volume 6, entitled Government 5.0
"Information Services and Information Machines" I ndustry 5.4
was to contain some parts on libraries. But before Services 6.5
he could finish volume 2, Machlup, who was by Information 6-1 0*
then 80 years old, died in February 1983. Whether
we accept these views of the library depend, of
*Derived from constant dollars, i.e., adjusted for infla-
tion. As no time series are available to deflate the values
course, on our concept of their role. Certainly, the in the information sector, the percentage growth in this
Matheson report on the role of libraries in aca- sector is estimated. Adapted from Cooper [ 19].
sense that they did not exist in previous years. But as they reflect the diversity of minds, is what makes
many of the outputs, such as education, entertain- the profession rich and what makes it grow.
ment, and the arts, have existed for a long time, and In closing, I want to add that, in this lecture, I
are regrouped into the new information sector. As have not touched upon another important aspect:
Cooper summed it up: the role of the new information technologies. Here,
I am referring to the consequences of computers
The evidence suggests that the concept of an information and communications technology. There is no ques-
economy is new but many of the products and services in
it are the same. It is not clear that there has been a shift tion that these technologies will have a massive
from a services to an information economy, rather than a effect on greater numbers of people; they will be
relabeling of existing products and services [24]. used as powerful political tools; they will augment
the human senses; and finally they may even affect
DISCUSSION the structure and content of our culture. But I will
I have chosen this analysis of the "information leave this area to a Janet Doe lecturer of the
society" to share with you a few observations about future.
our own field. First, I have tried to demonstrate the
complexity of the ideas we are working with by REFERENCES
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