Académique Documents
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INFORMATION
Robert M. Hayes
2005
Overview
Definition, economic roles and properties
Definition of Information
Economic Roles of Information
Economic Properties of Information
The Macro-economics of information
The Micro-economics of information
Definition of Information
Information is that property of data that represents and
measures effects of processing of them.
Processing includes data transfer, selection, structuring,
reduction, conceptualization.
In that definition, data is taken as equivalent to physical
recorded symbols, exemplified by printed characters; by
binary characters in magnetic, punched or optical form; by
spoken words; by images.
Whatever the physical form may be, it becomes a recorded
symbol when it is interpreted as representing something.
Physical & Symbolic Processes & Entities
PROCESSES
ENTITIES Physical Symbolic
Agriculture Data Input
Physical Manual Labour Data Storage
Personal Services Data Output (e.g., Reports)
Sports Intellectual Games
Symbolic Performance Arts Writing & Composing
Classroom lecturing Programming& Mathematics
Economic roles of information - 1
The writings of the economists concerning information
almost universally focus on its role in decision-making.
But information clearly is important in operational
management beyond use in decision-making. This role
is supported by management information systems.
Information is a result of environmental scan to ensure
that there is knowledge of external reality in decision-
making.
Information can serve as a substitute for physical
entities.
Economic roles of information- 2
Information is used to influence and persuade.
Information is essential in education, serving the
process of learning, supplementing interaction with
teachers, and providing (in books, media, and
databases) much of the substance.
Information may be an educational objective in itself,
since among things to be learned are the tools for access
to and use of information.
Information is the substance of cultural enrichment,
entertainment, and amusement.
Economic roles of information- 3
Information can be a product, a commodity
something produced as a package.
Information can be a service. Indeed, the majority of
business services (the national economic account that
includes consulting) are information based.
Information can be a capital resource, especially for
companies that produce information products and
services.
General economic properties of information - 1
FULL-SCALE DEVELOPMENT
FUNCTIONS
INDUSTRIES Non-Information Information
Non-Information 50% 30%
Information 6% 14%
SUBSTANTIAL DEVELOPMENT
FUNCTIONS
INDUSTRIES Non-Information Information
Non-Information 60% 25%
Information 6% 9%
PRIMITIVE DEVELOPMENT
FUNCTIONS
INDUSTRIES Non-Information Information
Non-Information 80% 14%
Information 3% 3%
National Policy:Economic Values
Better workforce, better trained and more
capable of dealing with problems.
Better product planning and marketing, based
on more knowledge about consumer needs.
Better engineering, based on availability and
use of scientific and technical information.
Better economic data, leading to improved
investment decisions and allocation of
resources.
Better management from improved
communication and decision-making.
National Policy:Economic Barriers
Costs are incurred in acquiring information.
It is likely that the return is over the long term,
while the expenditure is made immediately.
Except for the information industries
themselves, information is not directly
productive.
Rarely are results clearly attributable to the
information on which they were based.
Accounting practice treats, information as an
overhead expense, subject to cost-cutting.
Economic Policies
General Economic Policies
Encourage entrepreneurship
information goods
Develop the Information Economy
Encourage effective use of information in business
PRODUCTION & U.S. Data for 1990 U.S. Data for 1998
DISTRIBUTION
Entities Processes
Physical Symbolic
Physical Production Marketing
Distribution
Symbolic Composition Creation
Editorial
Capital Costs and Delivery Costs
Forms of Distribution
Types of Printed/ Magnetic/ Television/
Information Film Optical Internet
Books Primary Tertiary Tertiary
Scholarly Journals Primary Tertiary Secondary
Software Primary Secondary
Databases Secondary Primary
Motion Pictures Primary Secondary Secondary
Television Secondary Primary
Capital Investments
120.0
100.0
80.0
60.0
40.0
20.0
0.0
Jan Jul Jan Jul Jan Jul Jan Jul Jan
98 98 99 99 00 00 01 01 02
300.0
250.0
Millions of Users
200.0
150.0
100.0
50.0
0.0
1997 1998 1999 2000
Years
Royalties 10%
Capital costs 30%
Editorial 5%
Composition 25%
Delivery Costs 30%
Production 14%
Distribution 16%
Discount 30%
Editorial & Management Functions
1978 1985
Royalties $20 $38
Computer $50 $35
Telecom $10 $5
1978 1985
Royalties $20 $38
Computer $50 $35
Telecom $10 $5
The values of information in use