information economy: A context for records and information management, The

Pemberton, J Michael

The most valuable commodity I know of is information. Wouldn't you agree?

Gordon Gekko, character portrayed by Michael Douglas, in the film "Wall Street."

Any regular observer of the records management literature might reasonably conclude that the phenomenon widely known as the Information Economy had either passed records management by, like two ships in the night, or that we had somehow slept through it. There is a passing reference or two, and one contributor has used the term "information economy" to open a penetrating assault on a variety of shams and hustles in that part of the corporate world related to office, or information, technology.(1) The term "information" as used with a variety of other words (e.g., "information society," "information age," or "information explosion") is often little more than a technology flak's marketing mantra, one rivalling that of the now-unheard "paperless office." Today, this hype-notic drone sounds something like this: "paper is bad, computers are good; paper is bad, imaging is good."

Unlike the paperless office, however, the information economy has not only arrived, it has--whether or not we've noticed--been with us since the rise of modern management in the 1920s. What the information economy is, its origins, and the implications of it for records and information management as a discipline or profession speak not only to the origins of records management, but possibly to its future as well. Here, then, rather than harpoon the silliness, we will explore seriously the origins of the concept, variations on it, and its use as a larger context for the field of records and information management as that field continues to seek its professional roots and larger societal meaning. Our place in this information economy may, in fact, be one of the most useful levers and common denominators we have for communicating with other managerial specialties and with those in other information disciplines (e.g., archives, MIS). If, as one commentator suggests, information has "become so important today as to merit treatment as a symbol of the very age in which we live,"(2) then the more that information managers know about it, the better.

ORIGINS OF THE INFORMATION ECONOMY

A monumental nine-volume doctoral dissertation by Marc Uri Porat, titled the Information Economy,(3) is the origin of both the term and the concept of the "information economy" as we understand it today. Porat's work influenced his contemporaries and later writers on the topic (e.g., Daniel Bell, Alvin Toffler, Anthony Debons). Porat, however, was not the first to examine the economic status of information processing or manipulation and to envision a new economic focus.

Fritz Machlup was the first researcher to understand and to measure the economic impact of information work and information workers. Trained as an economist, Machlup became so interested in the world of information and knowledge that he focused for the remainder of his career on the meaning and impact of information and knowledge in society.(4) In his early work, however, he defined and pursued "knowledge" rather than "information."(5) Specifically he believed that "knowledge is content, and information is process."(6) This self-imposed limitation to Machlup's early work in analyzing the U.S. Gross National Product (GNP) caused a centering on the smaller "knowledge" sector, those workers who create information, those "original creators" such as scientists and engineers. In following this direction, Machlup largely ignored those who process or manage information or knowledge (e.g., records managers, librarians, archivists). Be that as it may, Machlup's was the first significant effort because it revealed that the number of "knowledge producing occupations" was beginning to surpass the number of "non-knowledge producing occupations," such that by 1959 the percentage of work-force effort devoted to knowledge was inching toward 50 percent.

Porat's work (1977) was more inclusive than Machlup's as he embraced "information" as the broader and more desirable term and concept, one which encompassed Machlup's "knowledge" but much more as well. And in the definition and measurement of the information society, it is Porat's work which most researchers of the information economy, or society, accept as foundational.

DEFINING THE "INFORMATION ECONOMY"

What, then, is an "information economy"? In Porat's study of a four-sector aggregate of the U.S. economy (Fig. 1), the information economy occurs when labor related to information (e.g., creation, processing, dissemination) begins to exceed work related to the other three economic sectors (i.e., agriculture, industry, and service). (Fig. 1 omitted.) The information economy "occurred," then, in 1967, when the percentage of labor income in the total workforce devoted to information work reached the 53 percent level.

Terminologically, the "information economy" produced the "information society," in which societal focus is on information. For our purposes, we can say that information work

occurs when the worker's main task involves information processing or manipulation in any form, such as information production, recycling, or maintenance. Moreover, the consequences of information work is more information, whether in the form of new knowledge or repackaged existing forms. Unlike the assembly line worker, an information worker, such as a telephone operator, processes and manipulates information as an end in itself. Information defines the task, the product, and the worker.(7)

Important to all those in the information fields--though they've not sufficiently recognized and capitalized on it--is Porat's recognition that all humans, regardless of their occupation, acquire and process information on a daily basis. Yet because of that fact, some confusion clouds Porat's definition of "information workers." In his "primary" category, Porat included scientists, engineers, writers, librarians, and others directly and wholly concerned with information. While "records managers" are not mentioned specifically, this discipline would be in the primary grouping. In his "secondary" category went those whose primary occupation was not information work but who spent a considerable percentage, sometimes almost 50 percent, of their work effort in acquiring, applying, or facilitating the flow of information (e.g., physicians, attorneys, market analysts). This method of categorization skews Porat's data toward a later emergence of the information economy, a significant fact we'll return to later.

Daniel Bell's The Coming of Post-Industrial Society (1976)(8) was another major factor in the development of the information economy as a watchword for the second half of the twentieth century. Bell was especially interested in the rise of the service (post-industrial) sector and identified, somewhat as did Machlup, a rising knowledge class whose identity focused on scientific, technical, and professional workers. These, he assumed, would lead a post-industrial society. Like Machlup, Bell minimized the roles of the massive assembly of information or knowledge workers who process and manage information.

While Machlup and Bell provided major contributions to our understanding of the emerging information economy, it was Porat's work which caused many popularizers of his findings to exclaim, as did Alvin Toffler:

As fewer workers in the rich nations have engaged in physical production, more have been needed to produce ideas, patents, scientific formulae, bills, invoices, reorganization plans, files, dossiers, market research, sales presentations, letters, graphics, legal briefs, engineering specifications, computer programs, and a thousand other forms of data or symbolic output. This rise in white-collar, technical, and administrative activity has been so widely documented in so many countries that we need no statistic here to make the point.(9)

The records and information manager should note the mixture of intellectual references (e.g., ideas, scientific formulae) and records types (e.g., bills, files, dossier, letters) mentioned here. Porat's own preliminary attempt to categorize information should also have a familiar ring to records managers:

Information is ... a collection or a bundle of many heterogeneous goods and services that together comprise an activity in the U.S. economy. For example, the information requirements of organizing a firm include such diverse activities as research and development, managerial decision-making, writing letters, filing invoices, data processing, telephone communications, and producing a host of memos, forms, reports, and control mechanisms....Information is data that have been organized and communicated. The information activity includes all the resources consumed in producing, processing and distributing information goods and services.(10)

Most of the ingredients of information work mentioned here relate to work in offices, which, according to prevailing wisdom, is 90 percent information work.

THE RISE OF THE MANAGEMENT CLASS AND INFORMATION MANAGEMENT

While there are some scholars who, for one reason or another, try simply to dismiss the information society,(11) a more useful--if slightly revisionist-approach of interest to information and records managers is that offered by Jorge Reina Schement, who convincingly corrects for Porat's statistical biases and faulty definitions previously mentioned. Schement's close analysis of the statistical patterns developed by those such as Machlup, Porat, Bell, and others suggests that the information economy emerged not in the middle of the twentieth century along with the rise of computers and telecommunications, as Porat's data seems to suggest, but in the century's early decades.

In fact, information workers began overtaking agricultural workers in the 1920s along with the rise of modern management--courtesy of pioneers such as Frederick Winslow Taylor, Henry L. Gantt, and Henri Fayol. That is, as the industrial period (and thus its economic sector) reaches its height, there is a parallel rise in the need for management information, information to control costs, to measure the effectiveness of labor-saving initiatives, to enhance decision making, and to increase coordination of increasingly decentralized enterprises.(12) Schement notes that "the new system of administrative management demanded that managers, first, believe in the superiority of systematic decisions arrived at rationally, and, second, that they invent ways and means for supplying managers with information."(13) The importance and value of management information as an ingredient even in an industrial age was recognized as early as 1923: "knowledge is the only instrument of production that is not subject to diminishing returns."(14) As for statistics, Schement notes that "clerical and kindred workers increased by nearly 500 percent between 1900 and 1930 [but only] by 220 percent between 1930 and 1960."(15)

The dramatic rise, then, between 1900 and 1930 of ever greater numbers of office workers to support the--mostly information--needs of management helps offset a myth common today: that the rise of the information economy is somehow congruent with the rise in the use of computers and sophisticated telecommunications equipment. While computers begin to play a facilitating role after 1950, it is, in fact, the need for the workers and their work, not the tools, that had the most direct bearing on the initial emergence of the information economy. The central issues about an information economy to the larger society have less to do with tools, or means, than about the higher ends:

The character and extent of the recorded information available to a society is a major differentiating feature between types of society. For example, in its possession of written records [emphasis supplied] a literate culture possesses a decisive adaptive advantage compared to a non-literate culture. This is seen, for example, in the rise to supremacy of the state, which was associated from the outset with the development of record-keeping [emphasis supplied] and writing.(16)

THE INFORMATION PROFESSION

A very important study, one too little known by the information disciplines, but which complements the econometric approaches of Machlup, Bell, and Porat is Debons' 1981 statistical survey of the information professions.(17) Instead of counting all the information workers (including clerical workers) or that percentage of information work done by all workers, The Information Profession limits itself to those information workers who are defined as "professionals" because they have at least a bachelor's degree and spend more than 50 percent of their time on information work. Based on a large national survey, The Information Profession estimates that in 1980 there were 1.6 million information professionals in some 1,500 discrete occupational titles requiring a bachelor's degree or higher. Seven out of ten of these information professionals were in the industrial sector.(18)

Yet to put the significance of records management into perspective here, the study found that only one percent of the 1,500 occupational titles were related to records management at the professional level. This point is related not to humility but to perspective: professional records management practitioners are members of a much larger fraternity of information professionals operating in the much larger topography of the information economy. The Information. Profession survey identified nine primary information functions performed by the 1.6 million practitioners:

*Managing Information Operations, Program, Services, or Databases

*Preparing Data and Information for Use by Others

*Analyzing Data and Information on Behalf of Others

*Searching for Data and Information on Behalf of Others

*Remaining Operational Information Functions

*Information Systems Analysis

*Information Systems Design

*Information Research and Development, and

*Educating and Training Information Workers.(19)

Note that while these categories are not records-management specific, they are information management specific, and any professional records manager would be involved in most of them in a recurring manner within the records management and information technology environment.

What do we have to learn from any assessment of the information economy, even one so superficial as this one must be? First, it is clear that there really is an information economy and that its advent was not dependent on technology but on the need for management information. It is also clear that information managers as a group--more than 1.6 million of them--play a major role in this information economy. Clearly, the term is 'information" economy, not records economy or archives economy or MIS economy or library economy. So, records managers need to explore not merely how to do their jobs better where they happen to work today but to understand and to interact more fully with the other players in the information industry and thus better understand and extend their roles in the much larger and more powerful context of an information-driven society.

REFERENCES

1. Ira A. Penn, "The Information Economy: Less Than Meets the Eye," Records Management Quarterly, 25, i (January 1991), 3-9, 66. A more passing connection between records management and the "economy" is made in Tyrone Butler, "A World of Opportunity: Records and Information Management in the Global Economy," Managing Office Technology, 39, ix (September 1994), 69-70.

2. William J. Martin, "The Information Society-Idea or Entity?" Aslib Proceedings, 40, xi-xii (1988), 303.

3. Because it provides summary statistics and tables, the first volume, Information Economy: Definition and Measurement (Washington, DC: Department of Commerce/Office of Telecommunications, 1977), is the most useful to the layperson.

4. See, for example, Machlup and Una Mansfield, The Study of Information: Interdisciplinary Messages (New York: John Wiley, 1983).

5. The Production and Distribution of Knowledge in the United States (New York: John Wiley, 1962).

6. Fritz Machlup, Knowledge: Its Creation, Distribution, and Economic Significance. Vol 1, Knowledge and Knowledge Production (Princeton, NJ: Princeton University Press, 1980).

7. Jorge Reina Schement, "Porat, Bell, and the Information Society Reconsidered: The Growth of Information Work in the Early Twentieth Century," Information Processing and Management, 26, iv (1990), 453.

8. Bell, The Coming of Post-Industrial Society (New York: Basic Books, 1976).

9. Toffler, The Third Wave (New York: William Morrow, 1980), p.186. It is in this work that Toffler popularizes Porat's demonstration of the movement from an agricultural economy to an industrial economy to, finally, an economy based on information and service.

10. Porat, The Information Economy, vol. 1 (Washington, DC: Department of Commerce, 1997), p. 2.

11. E.g. Frank Webster, "What Information Society?" The Information Society, 10 (1994), 1-23.

12. Schement, pp. 461-463; see also the Pulitzer Prize winning Alfred D. Chandler, Jr., The Visible Had: The Managerial Revolution in. American Business (Cambridge, MA: The Harvard University Press, 1977) and of special interest to records managers is JoAnne Yates, Control Through Communication: The Rise of System in. American Management. Baltimore, MD: The Johns Hopkins University Press, 1989.

13. Schement, pp. 461-62.

14. J. Maurice Clark, "Overhead Costs in Modern Industry: Part III-How and Why Large Plants Bring Economy," The Journal of Political Economy, 31. iv (August 1923), 621.

15. Schement, p. 262.

16. David Jary, II, ed. Collins Dictionary of Sociology (New York: Harper Collins, 1991), pp. 311-12.

17. Anthony Debons, Donald W. King, Una Mansfield, and Donald L. Shirley, The Information Profession: Survey of an Emerging Field (New York: Marcel Dekker, 1981).

18. Debons, p. 10.

19. Debons, pp. 5-7.

SOURCES AND SELECTIVE BIBLIOGRAPHY OF ADDITIONAL RESOURCES

Beniger, James R. The Control Revolution: Technological and Economic Origins of the Information Society. Cambridge, MA: Harvard University Press, 1986.

Boon, J. A., J. J. Britz, and C. Harmse, "The Information Economy of South Africa: Definition and Measurement," Journal of Information Science, 20, v (1994), 334-347.

Braman, Sandra. "Harmonization of Systems: The Third Stage of the Information Society," Journal of Communication, 43, ii (Summer 1993), 133-40.

Branscomb, Anne W. "Law and Culture in the Information Society," Information Society, 4, iv (1986), 279-311.

Carroll, John M. "Security and Credibility in an Information Intensive Society," Computers & Security, 9, vi (October 1990), 489-498.

Ciepiela, Wallace M. "Putting the 'Great Information Society' in Perspective," Journal of Systems Management, 40, xii (December 1989), 15-19.

Cleveland, Harlan. "The Twilight of Hierarchy: Speculations on the Global Information Society," International Journal of Technology Management, 2, i (1987), 45-66.

Davidson, William H. and Stanley M. Davis, "Management and Organization Principles for the Information Economy," Human Resource Management, 29, iv (Winter 1990), 365-383.

Debons, Anthony, Donald W. King, Una Mansfield, and Donald L. Shirley. The Information Profession: Survey of an Emerging Field. New York: Marcel Dekker, 1981.

Duncan, Joseph W. "The Role of the Information Industry in the Economy," Bulletin of the American Society for Information Science, 14, iii (February-March 1988), 16-17.

Engelbrecht, Hans-Jurgen. "The Japanese Information Economy: Its Quantification and Analysis in a Macroeconomic Framework (With Comparisons to the U.S.)," Information. Economics and Policy, 2, vi (December 1986), 277-306.

Forester, Tom. "Megatrends or Megamistakes? What Ever Happened to the Information Society?" Information Society, 8, iii (July-September 1992), 133-146.

"The Future of Paper in the Information Society," Electronic Library, 9, iii (June 1991), 235-243.

Gans, Joshua S. "Knowledge of Growth and the Growth of Knowledge," Information Economics and Policy, 4, iii (1989-1990), 201-224.

Hepworth, Mark E. "The Geography of Economic Opportunity in the Information Society," Information Society, 4, iii (1986), 205-220.

--.Geography of the Information Economy. London: Belhaven Press, 1989.

Hines, Andy. "Jobs and Infotech: Work In the Information Society," Futurist, 28, i (January/February 1994), 9-13.

Karunaratne, Neil Dias. "Analytics of Information and Empirics of the Information Economy," Information. Society, 4, iv (1986), 313-331.

--."Issues in Measuring the Information Economy," Journal of Economic Studies, 13, iii (1986), 51-68.

Machlup, Fritz. The Production and Distribution of Knowledge in the United States. Princeton, NJ: Princeton University Press, 1962.

--.Knowledge: Its Creation, Distribution, and Economic Significance. Vol. 1, Knowledge and Knowledge Production. Princeton, NJ: Princeton University Press, 1984.

--.Knowledge: Its Creation, Distribution, and Economic Significance. Vol. 3, The Economics of Information. and Hunan Capital. Princeton, NJ: Princeton University Press, 1984.

McMurdo, George. "Filofax, Personal Organizers and Information Society," Journal of Information Science Principles & Practices, 15, vi (1989), 361-364.

Masuda, Yoneji. The Information Society as Post-Industrialist Society. Tokyo: Institute for the Information Society, 1981.

Nesterov, Pyotr V. "The Expanding World Information Economy," Bulletin of the American Society for Information Science, 17, iv (April-May 1991), 8-12, 14.

Poirier, Rene. "The Information Economy Approach: Characteristics, Limitations, and Future Prospects," Information Society, 7, iv (1990), 245-285.

Porat, Marc U. The Information Economy. 9 vols. Washington, DC: Department of Commerce/Office of Telecommunications, 1977.

Raduchel, William J. "Information Technology and the Global Economy," Journal of Business Administration, 19, i, ii (1989-1990), 85-96.

Reidenberg, Joel R. "Privacy in the Information Economy: A Fortress or Frontier for Individual Rights?" Federal Communications Law Journal, 44, ii (March 1992), 195-243.

Roszak, Theodore. The Cult of Information: The Folklore of Computers and the True Art of Thinking. Cambridge, England: Butterworth Press, 1986.

Ruzic, Fjodor. "Teleports as Precursors of the 21st Century's Information Society,' Information Society, 6, ii (1989), 109-116.

Schement, Jorge Reina. "Porat, Bell, and the Information Society Reconsidered: The Growth of Information Work in the Early Twentieth Century," Information Processing & Management, 26, iv (1990), 449-465.

Webster, Frank and Kevin Roberts. Information Technology: A Luddite Analysis. Princeton, NJ: Ablex, 1986.

--."What Information Society?" Information Society. 10, i (January-March 1994), 1-23.

Images of the Information Society. London: Routledge, 1995.

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