This study provides the first census of the dispersion
of Internet technology to commercial establishments in the United
States. We distinguish between participation, that is, use of
the Internet because it is necessary for all business (e.g., email
and browsing) and enhancement, that is, adoption of Internet technology
to enhance computing processes for competitive advantage (e.g.,
electronic commerce).We focus on answering questions about economy-wide
outcomes: Which industries had the highest and lowest rates of
participation and enhancement? Which cities, states, and industries
had a typical experience and which did not? How does this measurement
of dispersion compare with other ways of measuring the spread
of Internet technology? Employing the Harte Hanks Market Intelligence
Survey, we examine adoption of the Internet at 86,879 commercial
establishments with 100 or more employees at the end of 2000.
Using routine statistical methods, we project results to two-thirds
of the U.S. labor force.
We arrive at three conclusions. First, participation and enhancement
display contrasting patterns of dispersion. In a majority of industries,
participation has approached saturation levels, while enhancement
occurs at lower rates and with dispersion reflecting long-standing
industrial differences in use of computing. Second, the creation
and use of the Internet does not eliminate the importance of geography.
Leading areas are widespread, whereas laggards are more common
in smaller urban areas and some rural areas. However, the distribution
of industries across geographic regions explains much of the difference
in rates of adoption of the Internet in different areas. Third,
commercial Internet use is quite dispersed, more so than previous
studies show.
Chris Forman,Graduate
School of Industrial Administration, Carnegie Mellon University
Avi Goldfarb, School of Management, University of Toronto
Shane Greenstein, Kellogg School of Management, Northwestern
University
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