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Industrial heterogeneity of the ICT industry : An exploratory survey on Norwegian firms

Summary:

The paper presents evidence from a limited survey undertaken among Norwegian ICT firms in 2001, supplemented with other statistical evidence. Corresponding to the limited production of ICT hardware in Norway, the hardware firms covered by the survey were dominated by sales outlets of foreign firms. While these firms are on average small and with a modest skill requirement, some of them are larger and more skill-intensive due to the provision of related software and services. Within-firm learning, higher education as well as sector- and industry-wide knowledge externalities generally matter to IT firms. Education is ranked third, and is more important for software and services than for hardware. Knowledge externalities are less important for foreign-owned firms. 2/3 of the firms surveyed produce various combinations of hardware, software and services, with software+services as the most frequent combination, composed by firms that are on average clearly larger than the sample average. Such firms rely more on learning within the firms and less on sectorwide knowledge externalities than other IT firms. Adaptation of products to individual customers is important for many IT goods, and implies that e.g. imported software frequently generates substantial domestic employment in related services. The survey tentatively suggests that such complementarities in production may be an important aspect of IT production. Norwegian IT exports are generally small, but pure software producers in the sample had larger exports.