The U.S. Service Sector - International Trade of Services and the Information and Communication Technology (ICT)

International Trade of Services and the Information and Communication Technology (ICT)

Seminar paper from the year 2005 in the subject American Studies - Culture and Applied Geography, grade: 1,7, Friedrich-Alexander University Erlangen-Nuremberg (Lehrstuhl für Auslandswissenschaft, Englischsprachige Kulturen), course: An Introduction to Amercian Economy, 16 entries in the bibliography, language: English, abstract: Already in 1940 the U.S. became a so called 'service economy' meaning that more than half of its work force is employed in producing intangibles. By 1975 two thirds of the work force was part of the tertiary sector. The Tertiary Sector, also known as the Service Sector, has become the number one driving force of the U.S. economy during the last decades. According to recent statistics (2002) it nowadays accounts for 78% of the U.S. non-agricultural employment and 76% of the U.S. private sector Gross Domestic Product (GDP). Additionally, the U.S. is the world's premier services exporter (17% of worldwide services trade) and importer (14% of worldwide services trade) at the same time. These figures alone necessitate a closer look. However, scientist even predict a continuous increase in the relevance of this industry for the U.S. Economy, expecting that almost 100% of additionally created jobs during the next decade will belong to the Service Sector. This development is even more impressive considering the fact that the Service Sector was a subject almost not worth mentioning in the eyes of scientists up to the 1940s. Adam Smith stated in the 18th century, that services were 'unproductive of any value because they do not fix or realize themselves in any permanent subject or vendible commodity which endures after labor is passed'. Another term used for the Tertiary Sector expresses very well the attitude toward this sector: The Residuum Sector, with the residual being the 'unproductive labor'. Up to that point in history the merchandise producing industry, the trade of goods - nationally and internationally - and the market's mechanisms and their expected development in future were the sole focus of economists. The questions are which factors have lead to the impressive growth of this industry and what will the future hold for it? This seminar paper will provide a glance at some of the numerous factors, namely the specialization of labor, growth of final demand and growth of goods-producing industries, and will than focus on the development and significance of the Information and Communication Technology for the U.S. service sector. However, at the beginning the term 'service' will be defined and some of its different understandings explained.