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March 2002, Vol. 125, No. 3
Productivity growth in ‘high-tech' manufacturing industriesChristopher Kask and Edward Sieber
It is widely accepted that the high-technology sector is one of the most dynamic parts of the U.S. economy. High-tech industries are thought of as an important source of employment growth, profits, and innovation in products and production processes. Accordingly, the high-tech sector has been a center of interest, generating numerous analyses and studies. In a 1997 Monthly Labor Review study, for example, William Luker, Jr., and Donald Lyons stated that "the continuing attention paid to high-tech industries in recent years seems to be rooted in the widespread belief that the innovations they produce can profoundly alter an economy’s mix of firms, industries, and jobs."1
The high-tech manufacturing sector, under alternative definitions, has dominated other manufacturing industries with respect to productivity growth. Between 1987 and 1999, labor productivity—defined as output per hour of labor input—increased 9.5 percent per year in high-tech manufacturing industries.2 Over the same period, labor productivity in the manufacturing sector as a whole increased 3.2 percent per year. Chart 1 illustrates the dramatic difference between these two growth rates.
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1 William Luker, Jr. and Donald Lyons, "Employment shifts in high-technology industries," Monthly Labor Review, June 1997, pp. 12–25.
2 This growth rate refers to high-tech manufacturing industries classified on the basis of employment of certain types of workers. The criteria for identifying high-tech industries will be discussed in detail later in this article.
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