Innovation has long been credited as a leading source of economic strength and vitality in the United States because it leads to new goods and services and increases productivity, leading to better living standards. Better measures of innovative activities'activities including but not limited to innovation alone'could improve what we know about the sources of productivity and economic growth. The U.S. Census Bureau either currently collects, or has collected, data on some measures of innovative activities, such as the diffusion of innovations and technologies, human and organizational capital, entrepreneurship and other worker and firm characteristics, and the entry and exit of businesses, that research shows affect productivity and other measures of economic performance. But developing an understanding of how those effects work requires more than just measures of innovative activity. It also requires solid statistical information about core measures of the economy: that is, comprehensive coverage of all industries, including improved measures of output and sales and additional information on inputs and purchased materials at the micro (enterprise) level for the same economic unit over time (so the effects can be measured). Filling gaps in core data would allow us to rule out the possibility that a measure of innovative activity merely proxies for something that is omitted from or measured poorly in the core data, provide more information about innovative activities, and strengthen our ability to evaluate the performance of the entire economy. These gaps can be filled by better integrating existing data and by more structured collections of new data.
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Measuring the Electronic Economy: Current Status and Next Steps
June 2000
Working Paper Number:
CES-00-10
The recent growth of consumer retailing over the Internet draws attention to the electronic economy. However, businesses also conduct other business processes over computer networks, and many have been doing so for some time. Uses of computer networks attract attention because of assertions that they lead to new products and services, new delivery methods, streamlined or re-engineered business processes, new business structures, and enhanced business performance. These changes, in turn, potentially affect the performance of the entire economy, including economic growth, productivity, prices, employment, trade, and the structures of businesses, regions, and markets. Evaluating these assertions, and their effects on economic performance, requires solid statistical information about the electronic economy. This paper develops principles for identifying information critical to measuring the size and evaluating the potential effects of the electronic economy, relates that information to current data collection programs, and notes relevant measurement issues. Some of the required information about the electronic economy can be collected by adding questions to existing surveys, making the scope of existing surveys consistent, or developing new surveys. However, many key pieces of information pose significant challenges to economic measurement. While some of those challenges are specific to the electronic economy, others are long-standing ones. Interest in the electronic economy highlights the importance of continuing attempts to address these challenges. Improving and enhancing the statistical system to provide information about the electronic economy, therefore, would also substantially improve the baseline information available for evaluating the performance of the entire economy.
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U.S. Productivity and Electronic Processes in Manufacturing
October 2001
Working Paper Number:
CES-01-11
Recent studies argue that the use of information technology is a significant source of U.S. productivity growth. Official U.S. data on this use have been scarce. New official data on the use of electronic business processes (business processes such as procurement, payroll, inventory, etc.,conducted over computer networks) in the manufacturing sector of the United States were recently released. Preliminary estimates based on these data are consistent with some results in the literature. However, they also raise questions requiring additional detailed micro data analysis.
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The Annual Survey of Entrepreneurs: An Introduction
November 2015
Working Paper Number:
CES-15-40R
The Census Bureau continually seeks to improve its measures of the U.S. economy as part of its mission. In some cases this means expanding or updating the content of its existing surveys, expanding the use of administrative data, and/or exploring the use of privately collected data. When these options cannot provide the needed data, the Census Bureau may consider fielding a new survey to fill the gap. This paper describes one such new survey, the Annual Survey of Entrepreneurs (ASE). Innovations in content, format, and process are designed to provide high-quality, timely, frequent information on the activities of one of the important drivers of economic growth: entrepreneurship. The ASE is collected through a partnership of the Census Bureau with the Kauffman Foundation and the Minority Business Development Agency. The first wave of the ASE collection started in fall of 2015 (for reference period 2014) and results will be released in summer 2016. Qualified researchers on approved projects will be able to access micro data from the ASE through the Federal Statistical Research Data Center (FSRDC) network.
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Computer Network Use and Firms' Productivity Performance: The United States vs. Japan
September 2008
Working Paper Number:
CES-08-30
This paper examines the relationship between computer network use and firms' productivity performance, using micro-data of the United States and Japan. To our knowledge, this is the first comparative analysis using firm-level data for the manufacturing sector of both countries. We find that the links between IT and productivity differ between U.S. and Japanese manufacturing. Computer networks have positive and significant links with labor productivity in both countries. However, that link is roughly twice as large in the U.S. as in Japan. Differences in how businesses use computers have clear links with productivity for U.S. manufacturing, but not in Japan. For the United States, the coefficients of the intensity of network use are positive and increase with the number of processes. Coefficients of specific uses of those networks are positive and significant. None of these coefficients are significant for Japan. Our findings are robust to alternative econometric specifications. They also are robust to expanding our sample from single-unit manufacturing firms, which are comparable in the two data sets, to the entire manufacturing sector in each country, as well as to the wholesale and retail sector of Japan.
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How Businesses Use Information Technology: Insights for Measuring Technology and Productivity
June 2006
Working Paper Number:
CES-06-15
Business use of computers in the United States dates back fifty years. Simply investing in information technology is unlikely to offer a competitive advantage today. Differences in how businesses use that technology should drive differences in economic performance. Our previous research found that one business use ' computers linked into networks ' is associated with significantly higher labor productivity. In this paper, we extend our analysis with new information about the ways that businesses use their networks. Those data show that businesses conduct a variety of general processes over computer networks, such as order taking, inventory monitoring, and logistics tracking, with considerable heterogeneity among businesses. We find corresponding empirical diversity in the relationship between these on-line processes and productivity, supporting the heterogeneity hypothesis. On-line supply chain activities such as order tracking and logistics have positive and statistically significant productivity impacts, but not processes associated with production, sales, or human resources. The productivity impacts differ by plant age, with higher impacts in new plants. This new information about the ways businesses use information technology yields vital raw material for understanding how using information technology improves economic performance.
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Computer Investment, Computer Networks and Productivity
January 2005
Working Paper Number:
CES-05-01
Researchers in a large empirical literature find significant relationships between computers and labor productivity, but the estimated size of that relationship varies considerably. In this paper, we estimate the relationships among computers, computer networks, and plant-level productivity in U.S. manufacturing. Using new data on computer investment, we develop a sample with the best proxies for computer and total capital that the data allow us to construct. We find that computer networks and computer inputs have separate, positive, and significant relationships with U.S. manufacturing plant-level productivity. Keywords: computer input; information technology; labor productivity
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The Adoption and Diffusion of Organizational Innovation: Evidence for the U.S. Economy
June 2007
Working Paper Number:
CES-07-18
Using a unique longitudinal representative survey of both manufacturing and nonmanufacturing businesses in the United States during the 1990's, I examine the incidence and intensity of organizational innovation and the factors associated with investments in organizational innovation. Past profits tend to be positively associated with organizational innovation. Employers with a more external focus and broader networks to learn about best practices (as proxied by exports, benchmarking, and being part of a multi-establishment firm) are more likely to invest in organizational innovation. Investments in human capital, information technology, R&D, and physical capital appear to be complementary with investments in organizational innovation. In addition, nonunionized manufacturing plants are more likely to have invested more broadly and intensely in organizational innovation.
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The Management and Organizational Practices Survey (MOPS): An Overview*
January 2016
Working Paper Number:
CES-16-28
Understanding productivity and business dynamics requires measuring production outputs and inputs. Through its surveys and use of administrative data, the Census Bureau collects information on production outputs and inputs including labor, capital, energy, and materials. With the introduction of the Management and Organizational Practices Survey (MOPS), the Census Bureau added information on another component of production: management. It has long been hypothesized that management is an important component of firm success, but until recently the study of management was confined to hypotheses, anecdotes, and case studies. Building upon the work of Bloom and Van Reenen (2007), the first-ever large scale survey of management practices in the United States, the MOPS, was conducted by the Census Bureau for 2010. A second, enhanced version of the MOPS is being conducted for 2015. The enhancement includes two new topics related to management: data and decision making (DDD) and uncertainty. As information technology has expanded plants are increasingly able to utilize data in their decision making. Structured management practices have been found to be complementary to DDD in earlier studies. Uncertainty has policy implications because uncertainty is found to be associated with reduced investment and employment. Uncertainty also plays a role in the targeting component of management.
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Computer Networks and U.S. Manufacturing Plant Productivity: New Evidence from the CNUS Data
January 2002
Working Paper Number:
CES-02-01
How do computers affect productivity? Many recent studies argue that using information technology, particularly computers, is a significant source of U.S. productivity growth. The specific mechanism remains elusive. Detailed data on the use of computers and computer networks have been scarce. Plant-level data on the use of computer networks and electronic business processes in the manufacturing sector of the United States were collected for the first time in 1999. Using these data, we find strong links between labor productivity and the presence of computer networks. We find that average labor productivity is higher in plants with networks. Computer networks have a positive and significant effect on plant labor productivity after controlling for multiple factors of production and plant characteristics. Networks increase estimated labor productivity by roughly 5 percent, depending on model specification. Model specifications that account for endogenous computer networks also show a positive and significant relationship. Our work differs from others in several important aspects. First, ours is the first study that directly links the use of computer networks to labor productivity using plant-level data for the entire U.S. manufacturing sector. Second, we extend the existing model relating computers to productivity by including materials as an explicit factor input. Third, we test for possible endogeneity problems associated with the computer network variable.
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The Center for Economic Studies 1982-2007: A Brief History
October 2009
Working Paper Number:
CES-09-35
More than half a century ago, visionaries representing both the Census Bureau and the external research community laid the foundation for the Center for Economic Studies (CES) and the Research Data Center (RDC) system. They saw a clear need for a system meeting the inextricably related requirements of providing more and better information from existing Census Bureau data collections while preserving respondent confidentiality and privacy. CES opened in 1982 to house new longitudinal business databases, develop them further, and make them available to qualified researchers. CES and the RDC system evolved to meet the designers' requirements. Research at CES and the RDCs meets the commitments of the Census Bureau (and, recently, of other agencies) to preserving confidentiality while contributing paradigm-shifting fundamental research in a range of disciplines and up-to-the-minute critical tools for decision-makers.
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