The information sector, with a projected 5.2-percent average annual output growth rate,
is the secondfastest growing sector in the economy. Providing publishing,
Internet, cable, and telecommunication services, real output for this sector is
expected to increase by $624.1 billion between 2004 and 2014, to reach $1.6 trillion
Accounting for a third of the information sector’s employment and 40.0 percent of
its nominal output in 2004, telecommunications is this sector’s dominant subsector.
However, as companies seek cost reductions, the twin pressures of industry consolidation
and price competition are expected to cause this subsector’s projected employment
losses. Additional factors effecting employment are expected to be improved
equipment reliablity and productivity-enhancing technologies, which will increase the
data transmission capacity of telecommunication networks. Employment,
therefore, is projected to decline by 0.7 percent annually, to 975,000 jobs in 2014 - a
loss of 68,000.
However, as the distinctions between cable and satellite TV, and between wireless and
wireline telephone systems become less obvious, traditional telecommunications companies
will continue to offer more services, such as high-speed Internet access,
video-on-demand, and Internet telephony services. Wireless providers will
also continue to increase capacity and enhance services, such as phones that also
function as computers.
These trends are expected to result in the telecommunications subsector being the
10th largest in terms of output growth. Even though this category’s
output is projected to grow by a little more than half its historical 6.1 percent,
real output is expected to expand by $203.4 billion, to $667.0 billion in 2014.
Software publishing, adding jobs at an annual rate of 5.7 percent between 1994 and 2004,
was the economy’s third fastest growing industry. It is also expected to be
the Nation’s second fastest growing employer, with a projected annual growth rate of 5.3
percent. Firms are expected to continue to invest heavily in productivity
enhancing software that facilitates electronic commerce and ensures secure systems
of communication. In addition, consumers are anticipated to continue their
demand for educational and entertainment software. Adding 161,000 jobs to
reach 400,000 by 2014, projected employment growth is expected to be tempered,
relative to historical rates, by cost-cutting initiatives that outsource routine
tasks offshore. Providing the backbone to a largely technology-based economy,
however, this industry’s real output is expected to reach $281.2 billion by 2014,
reflecting an economy-leading increase of $180 billion and a 10.8-percent annual rate
from its 2004 level - the third fastest in the economy.
Internet and other information services, providing a wide variety of services from
Internet service providers and Web search portals to data processing and hosting, is
a group of information related subsectors that are projected to experience healthy
growth. Specifically, this group is expected to be among the economy’s
fastest in terms of employment and output growth - increasing by 2.5 percent to
600,000 jobs in 2014, up from 470,000 in 2004. The collective real
output of these subsectors is projected to grow at an aggressive 8.5 average annual
percent, and reach $271.8 billion in 2014. The continued growth of general
Internet use, the expansion of new Web services, and the ongoing need to absorb the
unending amount of new content - coupled with the rapid demand to upgrade networks that
improve performance and enhance security - are expected to act as positive catalysts
for this group.