The Service Sector's Acquisition and Development of Information Technology: Infrastructure and Productivity

The paper explains why the productivity of information technology (IT) in the service sector of the U.S. economy is increased by the provision of infratechnology. The size and growth of the service sector and its investment in IT are discussed, and a key fact and a key inference are developed. The fact: The absorption costs of IT are the vast majority of the IT investment costs to the service sector. The inference: Infratechnology investments are an efficient way to increase both private and social benefits of incurring the cost of implementing IT.